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An Alternative p-Chart Application for Predictive Scorecards

An analytical-based system for making choices over time

Forrest Breyfogle—New Paradigms
Fri, 11/11/2011 - 11:29
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Body

Story update 11/13/2011: The references at the end of this article were inadvertently deleted during final editing. They have been restored.

During a Sept. 23, 2011, Quality Digest Live interview, I made several comments relative to business metrics and the need for an enhanced business management system. This article will elaborate on those comments and show the business application of an alternate p-chart, using the data from Donald Wheeler’s excellent Sept. 30, 2011, article, “What About p-Charts?”

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In Wheeler’s article, data were used to describe the benefits of individuals control charting over p-charting. That same data set will now be used to illustrate this application of individuals control charts for attribute situations, as part of an overall enterprise business value chain that provides predictive scorecards.

 …

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Comments

Submitted by rderoeck on Tue, 11/15/2011 - 09:00

Stop Tampering!

I like the idea of using simple statistical methods to evaluate scoreboard metrics. Any method to teach managers the simple concept of variation (special vs. common causes) and the removal of those idiotic green/yellow/red charts would be HUGE progress. Enough knee-jerk management methods.

Thanks for the article.

Rich DeRoeck

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Submitted by Rajohnson on Tue, 11/15/2011 - 10:15

a few comments

I have used this method for years with a few adjustments.

Instead of the average level being the standard, I have used the most pertinent control limit (upper or lower depending on direction of "bad").  In this example, I would put the expected level to be the 9.3%.  This is the level that would trigger a potential change in the process.  Using the center line leaves a 50-50 chance of the metric being exceeded and a lot of noise that needs to be addressed.

I still use red/yellow/green indications.  Green = control is maintained and no signals to investigate.  Yellow =  a signal under investigation and Red = a confirmed change needing to be addressed.  

This methodology gives "the best of both worlds".  Simple indicators of what needs to be discussed by management are yellow or red.  Greens can be left alone and not even discussed.  The red/yellow/green become very meaningful to the organization and is data driven so the subjectivity becomes removed.

The alignment of metrics to business goals also provides a "gut check" to management so they can see if the "numbers are being made" the bulk of the reports are expected to be "green", if they are not there is action to be taken.  If the "numbers are missing targets", the direction to take for improvement become abundantly clear.

 

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