28 Industrial Engineer
What,
Why,
and how
The importance of statistical
In January of last year, The Wall
Street Journal reported that “recent studies
… suggest that nearly 60 percent of all
corporate Six Sigma initiatives fail to
yield the desired results.” The article by
Satya Chakravorty suggests that lack
of adequate know-how for performing
sophisticated statistical analysis is one
reason for the high failure rate.
Another article, “Six Triumphs and Six
Tragedies of Six Sigma,” by T.N. Goh in
the journal Quality Engineering (December
2010), bemoaned the lack of statistical
skills among black belts: “Black belts
using conventional Six Sigma proce-
dures on service systems could end up
with results that could not stand up to
serious scrutiny of a good statistician.
… The tragedy is doubled if the black
belts are not even aware of their own
inadequacy or limitations and instead
brandish to management or customers
the outcomes of half-baked studies.”
Goh, an international consultant and
academician of the International Acad-
emy for Quality, was lamenting the
inadequacy of statistical thinking in
black belts he had come across.
A study of the inadequacy for statistical
By
K.S. Krishnamoorthi
thinking for Six Sigma
thinking among black belts, and quality
analysts in general, seems relevant.
Statistical thinking — What?
Since the days of Walter Shewhart,
the father of modern statistical qual-
ity control, knowledge of statistics has
been considered essential to under-
stand the variability in product and
process variables, to find the means for
minimizing this variability, and thus
to produce quality products. Shewhart
wrote in his 1939 book Statistical Meth-
ods from the Viewpoint of Quality Control,
“The long-range contribution of statis-
tics depends not so much on getting a
lot of highly trained statisticians into
industry as it does in creating a statis-
tically minded generation of physicists,
chemists, engineers and others who will
in any way have a hand in developing
and directing the productive processes
of tomorrow.”
W. Edwards Deming, the quality
guru recognized for teaching the Japa-
nese how to make quality products,
realized the need for training engineers
and others in statistical methodology. In
his book Out of the Crisis, he wrote that,
October 2011 29
what, why and how
“Industry in America needs thousands
of statistically minded engineers, chem-
ists, doctors of medicine, purchasing
agents, managers.” He further said, “No
one should be teaching statistical theory
and applications, especially to begin-
ners, unless he possesses knowledge
of statistical theory through at least the
master’s level, supplemented by experi-
ence under a master.” His emphasis was
that engineers and others should learn
the statistical methods along with the
theory behind them from people who
have the competence to teach that theory.
Many others have written about the
need for statistical thinking for quality
professionals. Notably, Lynne B. Hare,
Ronald D. Snee and Roger W. Hoerl
have written extensively on the subject.
The special publication by the Statis-
tics Division of the American Society
for Quality (ASQ) titled 30 Years of
Promoting Statistical Thinking provides a
compendium of work published in this
regard. Most of these modern authors
tend to view statistical thinking as a
problem-solving approach that empha-
sizes the use of statistics, much like
the breakthrough sequence of Joseph
Juran, the PDCA (plan, do, check, act)
cycle of Deming or the DMAIC (define,
measure, analyze, improve, control)
process of the Six Sigma system.
This article attempts to define
statistical thinking following the
“statistical mindedness” that Deming
and Shewhart used to describe the
phenomenon. This statistical minded-
ness is not just learning to calculate the
average and standard deviation of data
or even apply a given statistical method
to solve a given quality problem; it is the
ability to view the world through the
lens of statistics so that the otherwise
random, haphazard or chaotic would
show patterns and reveal relationships
among variables, which in turn enable
predictions about their behavior. When
30 Industrial Engineer
an analyst with such ability views
processes that produce products, he or
she sees signals among noise, extracts
meaningful relationships among vari-
ables and gains a deeper knowledge
about processes. This knowledge helps
identify solutions to problems and
produce quality products.
Statistical thinking — Why?
The case studies below illustrate how
statistical thinking enables an analyst to
frame a problem in the models of statis-
tics and then find solutions. In each case,
note that statistical thinking allows the
analyst to understand the problem and
generate solutions. Without that abil-
ity, the problem would continue to be
misunderstood and produce waste and
customer complaints. All these cases are
drawn from manufacturing since that
environment offers the most challenges.
Cases three, five and six are taken from
the author’s book, A First Course in Quality
Engineering. Cases one, two and four are
from an article presented by the author
at the Annual Conference of IEEE on
Industrial Engineering and Engineering
Management, held in October 2010.
Case study 1. A customer’s specifica-
tion for a chemical product stated: No
more than half a percent of the packages
LIMITING ASH
0 0.3
Figure 1. Using normal distribution to model percent ash in packages
should contain more than a half percent
of ash.
The chemical engineers in charge of
production did not know how to inter-
pret the specification; they just made
the product as well as they could and
delivered it to the customer, hoping it
would be accepted. Often packages were
rejected by customers, returned to the
plant and burned in incinerators.
It was a revelation to the engineers
when they were shown how the normal
distribution model shown in Figure 1
could be used to interpret the specifi-
cation, and how they could verify the
acceptability of their product even as it
was being produced. They had to take
small samples of four packages from the
process periodically and create and R
charts for ash content. Estimating the
process average as , the center line of the
-chart, and the process standard devia-
tion as where is the center line of
the R-chart, the proportion of packages
having more than 0.5 percent ash could
be estimated on normal assumption and
compared with the specified limit.
Case study 2. In a shipping dock,
skids were assembled with each skid
stacked with 36 bags of a chemical.
Before loading the skids onto trucks,
the trucker checked the skid weights as
0.005
0.5 % Ash
a quick way of checking the bag weights.
The bags had a tolerance of plus or
minus 0.5 pounds, so the trucker
had been given a tolerance of plus or
minus 18 pounds for the skid weight.
The customer frequently complained
about underweight bags. The chemical
manufacturer was at a loss as to why the
bag weights would be low when skid
weights were right.
The employees used an incorrect
method to compute the tolerance for
the skid weight from the tolerance of
the bag weight. They should use the
root sum of squares (RSS) rule instead.
The tolerance for the skid weight should
be plus or minus
not plus or minus 18 pounds. The RSS
formula is based on the laws for calcu-
lating the variance of a sum from the
variance of components.
Case study 3. A foundry no longer
can buy a brand of machine that tests
the strength of cores made of sand
with bonding material, and the exist-
ing machines cannot be repaired. A new
brand has to be purchased, but all speci-
fications for core strength in the foundry
were created using the old tester. Tech-
nicians argue that all the specifications
(hundreds) should be reset using the
new tester. Another group argues that
new specs are not necessary; they are
concerned about the enormous time and
expense needed in redoing the specs.
The question to be answered: Are
the populations of readings generated
by the two testers for the same sand
identical? The question was answered
using hypothesis testing comparing the
means and variances of the two popu-
lations. Samples were collected from
both testers for several sand types, and
hypotheses were tested as stated below
for each sand type.
The testers gave “equal” results.
THE PAPER TRAIL
Desired
distribution
σ1
3.5
Figure 2. Distribution of difference between actual and ideal height of paper cubes
,
Case study 4. The president of a
company that produces paper cubes,
an advertising specialty, believes that
the workers are making cubes too tall
compared to the specs. The cube height
depends on the height of the “lift” of
sheets of paper the workers pick from
the paper stack using eye judgment.
The height varies from lift to lift for the
same worker, from worker to worker
and over time. Humidity also confuses
the judgment of the workers because
the paper bulks and contracts with
humidity changes. The workers err on
the safe side by making the cubes too
tall. The president wants to know how
much money the company is losing in
the excess paper given away, and if that
loss would justify installing an expen-
sive sheet-counting machine that will
deliver the same height for every lift.
The current height of the cubes is a
random variable and has a distribution.
The ideal height desired is also a random
variable with a distribution because every
cube cannot be made exactly the same
height. We assume normal distribu-
tion for both, and parameters of the two
populations have to be estimated. The
“difference” between the distributions is
Current
distribution
Proportion
σ0 too tall
3.625
the overage that can be avoided, shown
in Figure 2. This difference is converted
into a dollar amount. Estimating the
variability in the ideal distribution and
proportion too tall needs a bit of sophis-
ticated statistical thinking.
Incidentally, this study discovered the
sources of variability in the cube height,
which led to new production rules that
reduced variability and reduced the
paper giveaway, all without the expensive
sheet-counting machine.
Case study 5. A huge consignment
of castings, cylinder heads for automo-
tive engines, was returned to a foundry
by the machine shop because of blisters
found when the castings were machined.
The customer’s machining and assembly
operations needed the castings badly;
the foundry could lose the customer if
the problem could not be resolved soon.
The foundry engineers did not know
what caused this defect, although they
knew that a few cost-saving changes had
been made recently. The engineers agreed
to run a 23-factorial experiment with
factors and levels as shown in Figure 3.
Preparations were made, the experiment
was conducted and results were obtained
within 48 hours. When the castings were
October 2011 31
what, why and how

poured, cooled, cut and inspected, the foundry process from the outside rain. air temperature increased or when the
percentages of defective castings at each It was suspected that atmospheric conveyor speed decreased. Using this
treatment combination were as shown humidity caused by the rain affected the knowledge, when the humidity increased
in Figure 4. The results showed that drying ability of the oven that dried the on a rainy day and dry-ability dropped,
there was a treatment combination that molds after they were dipped in a wash. the other factors were adjusted to get the
had zero blisters. A trial production run Data was collected on factors such as dry-ability back to the desired level.
with these “optimal” parameters for the hot air temperature, conveyor speed For example, when the dry-ability
process confirmed the findings from the of the oven and atmospheric humid- dropped on a day (these readings were
experiment, and the process specs were ity, corresponding to a measure called taken twice a day on a regular basis) due to
changed. The problem was resolved. the dry-ability index of the oven, which increase in humidity, the foreman would
Case study 6. Whenever it rained reflected how well it dried the cores. call for an increase in hot-air tempera-
outside, a foundry experienced an Regression analysis derived the ture. If increasing the hot-air temperature
increased amount of scrap. The foundry impact each of the factors had on the dry- alone did not restore dry-ability, the fore-
wanted to know how the rain outside the ability. The results confirmed that the man would authorize reducing conveyor
buildings affected the processes inside, dry-ability decreased when the humid- speed. Increasing the hot-air temperature
and if there was a way to proof the ity increased, but it increased when hot made the workplace hot and reducing
the conveyor speed reduced production
output, yet the workers and foremen
Critical inputs understood the relationship between
dry-ability and casting quality and were
LEVELS willing to make the sacrifices.
FACTORS LOW HIGH When the dry-ability was maintained
A: Sand for port-cores Silica Lake at a consistent level, the casting scrap
B: Drying oven temperature 350OF 400OF declined. The foundry process was made
C: Flow-off vents Yes No robust against an uncontrollable vari-
able, the rain outside, which, along with
Figure 3. Factors and levels for the experiment to eliminate blisters in castings the resultant casting scrap, had been
accepted earlier as facts of life.

Statistical thinking — How?

Blister me not First of all, certain know-how is needed
to recognize the nature of each prob-
lem situation and to pick a method that
will generate the requisite knowledge.
Understanding each method is neces-
sary to apply the method correctly. In
each case, an analyst who knew the
process well and who had the capacity
for statistical thinking was needed to
find satisfactory solutions.
In at least one case, there was no time
to bring in and educate a statistician on
the process details before performing
the experiment. This goes to prove the
point that Shewhart and Deming made
that the analysts need not all be stat-
Figure 4. Results from a designed experiment showed a treatment combination that
isticians, but they must be engineers,
eliminated blisters in castings. chemists and scientists who know their

32 Industrial Engineer
processes well and at the same time have
the ability for statistical thinking.
Such ability for statistical thinking
comes from an understanding of the
fundamentals of probability, the laws
of statistics, and the theoretical basis
of the statistical methods for qual-
ity. Several authors have written about
what a quality analyst should know in
order to possess the needed stat-ability.
Hoerl’s 2001 Journal of Quality Technol-
ogy article “Six Sigma Black Belts: What
Do They Need To Know?” provides an
overview of such recommendations and
suggests a lesson plan. The knowledge
base needed for an analyst, a black belt,
can be summarized as follows.
There is variability in every popula-
tion. This variability can be quantified
and modeled using probability distri-
butions. There are several distributions
proposed by mathematicians to model
various types of variability. Normal,
binomial, Poisson, exponential, Weibull
and others are the names attached to
these different models. Quality analysts
should know the appropriate application
for these distributions and the math-
ematics to make predictions with them.
They should know how to monitor and
control the variability in process vari-
ables and product characteristics using
control charts. They should know the
methods to find the relationship among
process variables and product character-
istics, such as regression analysis and
designed experiments.
Methods to determine the variability
in measurements generated by instru-
ments are another important set of
tools. They should learn these methods
and understand the theoretical basis
behind them. For example, when an
analyst learns about the -chart, he
or she should learn how the formulas
for the limits are derived, why small
sample sizes and three sigma limits are
used, what is meant by the power of the
control chart, and how the performance
of a control chart is evaluated using an
OC curve and ARL.
Some believe that it is not necessary
for an analyst to understand the theory
behind statistical methods in order to
use them. They will use the analogy that
“there is no need to know how a car is
designed in order to be able to drive it.”
However, when the methods are learned
without an understanding of their
theoretical background, only half of
the knowledge is gained. Yes, there are
places where that partial knowledge can
be adequate, but it does not cultivate the
deeper statistical thinking needed when
facing larger, more complex problems.
The IE mission
Statistical thinking provides the empiri-
cal complement to the engineering
knowledge of processes, which leads to
fuller insight into problems and then to
their resolutions. A certain knowledge
base is needed to achieve the ability
to think statistically. Lesson plans are
available to grow this knowledge base.
They are not at the master’s level in
statistics or even the bachelor’s level of
statistics; they are at a level that would
complement the engineering or science
knowledge the analyst already would
possess. There always will be the need to
consult a master statistician on issues
where the analyst recognizes the need
for help.
It is unrealistic to expect that every
engineer, scientist or business person
in an organization should have this
in-depth ability in statistics. An ongoing
survey indicates that less than 5 percent
of the people involved in the design and
production of products in U.S. indus-
try have this ability. The same survey
also indicated that if at least 20 percent
to 25 percent had this knowledge, the
quality system of that organization will
be much healthier. Perhaps every black
belt in an organization should have this
level of capability.
Readers, particularly IEs, may not
need much convincing about the value of
statistical thinking. The task is convey-
ing the message to those in a productive
organization who do not have the same
level of appreciation for statistics. That
is the challenge and, maybe, the respon-
sibility IEs have. d
K.S. Krishnamoorthi is a professor of indus-
trial engineering at Bradley University. He
holds a bachelor’s degree in mechanical
engineering from the University of Madras,
India, and a master’s degree in statistics and a
doctoral degree in industrial engineering from
the University at Buffalo, State University of
New York. Krishnamoorthi teaches, consults
and does research in the area of product and
process improvement using statistical meth-
ods. He is a fellow of the American Society for
Quality and a senior member of IIE. He is the
author of the recently released second edition
of A First Course in Quality Engineering.
Web exclusive
testing, 1-2-3
K.S. Krishnamoorthi has created
an objective test to determine a
person’s knowledge base of statis-
tical analysis. The test has 25 to
30 questions and can be answered
without the use of a calculator. It
can determine if enough people in
an organization have the requisite
stat-ability and can be used to plan
training strategies to create the
adequate statistical know-how for
the organization. Go to www.iienet.
org/iemagazine/oct11/stat-test to
try six questions from the test.
October 2011 33
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