Statistical Thinking, 3rd Edition

CHAPTER 2Data: The Missing Link

Data have no meaning in themselves; they are meaningful only in relation to a conceptual model of the phenomenon studied.

—George Box, Bill Hunter, and Stu Hunter

In Chapter 1 we discussed today's business realities and the need for businesses to improve, a model for business improvement, some new improvement approaches that have been proposed, and principles and applications of statistical thinking. Statistical thinking is an integral part of the common themes that run through these new improvement approaches.

Statistical thinking is based on three principles: All work occurs in a system of interconnected processes, variation exists in all processes, and understanding and reducing variation are keys to success. Broad use of statistical thinking can help an organization improve operations and its management system. As depicted in Figure 1.4, data are the link, sometimes the “missing link,” between the process and the improvement activity. Therefore, collection and analysis of data are a critical foundation of improvement. When this link is missing, decisions tend to be based on “gut feel,” personal biases, politics, or hierarchy. Such decisions rarely work out well in the long term.

In this chapter we discuss the value and types of data, sources of variation in data, the measurement process, data quality, and what can go wrong in the data collection process. We also introduce the concept of data pedigree, which is a great aid in understanding ...