I like the plan-do-check-act (PDCA) cycle for three reasons: It’s simple, it provides a pathway for teaching, and it works.

I have as many bad customer-service experiences as the next guy, with health care and other businesses. As I’ve said before, unless there’s a broader lesson involved, I try not to be a “hack” blogger who just uses his platform to complain about the last bad thing to happen. However, I think the lesson here is broad enough to qualify.

My dog, Bailey, has a sensei—a dog-obedience trainer. Actually, my wife and I have a sensei to teach us how to train our dog. In fact, my wife and I have used the same dog-obedience trainer for the last three dogs, all German shepherds. No one would mistake us for Mr. and Mrs. Dog Whisperer.

The recession has been an extremely disruptive event for many organizations. Many bear relentless pressure to identify new market needs, create appropriate products and services, become more effective and efficient, and develop and modify systems and processes to meet and deliver those goals. In short, the economic downturn has put the spotlight squarely on how an organization creates the value needed by its markets and customers.

While reading an issue of Quality Digest Daily, I came across an article by Kenneth Levine and Peter Sherman titled, “Ten Simple Principles for Treating Employees as Assets.” I thought it followed the usual themes about engaging employees and driving out fear until I ran across the following jewel in No. 9:

An article titled “Sharp Drop in Firefighter Fatalities in 2009” appeared in a safety trade journal recently. For the first time in three years, it said, on-the-job firefighter fatalities dropped below 100. The article went on to say that the 82 firefighter deaths in 2009 were substantially below the 10-year average of 98 and down from 105 in 2005.

Story update 10/05/2010: Corrections were made to captions for Figures 6, 7, 8, 9.

As I was teaching class the other day, I told the students I was going to reveal to them the one secret they needed to learn to understand every statistical test they would ever use. The secret was the one thing that would make statistics more of a reasonable science than a bunch of equations to memorize, the one thing they needed to pass my class. (OK, there is a lot more needed to pass the class, but without this one thing doing so is a lot harder.)

Capability indexes allow us to characterize the relationship between the process potential and the specifications. Performance indexes characterize the past performance relative to the specifications. Yet, in practice, we seek to make sense of these index numbers by converting them into other quantities such as the fraction nonconforming or the parts per million (ppm) defect rates. This article will outline a better way to make sense of capability and performance indexes by converting them into the effective cost of production and use.