When administrative and managerial data are placed on an XmR chart, the first reaction will frequently be that the limits are far too wide: “We have to react before we get to that limit.”

So what are we to do when this happens? Are the limits really too wide? There are three cases to consider:
• The data are full of noise
• The data are full of signals
• The data alternate between different processes

The data are full of noise

Administrative and managerial data tend to be report card data. The measures are accumulated across departments, across plants, across regions, and even across countries before being presented to managers for consumption. At each stage, as the data are aggregated, the noise of each data stream is also being aggregated into the total, so by the time the finished value is presented, it has a lot of noise in the background. For example, consider the quarterly sales values for one company shown in Figure 1.

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