The quality guru Edward Deming conducted a simple experiment in his seminars with a bowl of beads. Many were colored white but a percentage of red beads were randomly mixed in the bowl. A participant from the seminar was provided with a paddle made with indentations so that 50 beads at a time could be scooped from the bowl. The participant was only allowed to use the paddle and instructed to only scoop white beads (repeated multiple times with beads replaced). The red beads were considered to be defectives. Of course, this was difficult to do, and each scoop resulted in a count of red beads. Deming plotted the fraction of red beads from each scoop and used the results to make several points. As was clear from the scenario, this process is beyond the participant’s ability to make simple improvements. It is the process that needs to be changed (reduce the number of red beads) and that is the responsibility of management. Furthermore, many business processes have this type of characteristic and it is important to learn from the data whether the variability is common, intrinsic to the process or whether some special cause has occurred. This distinction is important for the type of process control or improvements to be applied. Refer to the example of control adjustments in Chapter 1. Control charts are primary tools to understand process variability and that is main ...

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