Outside in Thinking

Black Belt Advanced
Tools/Refresher Training

Introduction to Outside/In Thinking
g
GE Industrial Systems
g GE Industrial Systems
April 1999-Adapted by Industrial Systems from Corporate Roadmap to Customer Impact course
2.
Agenda-Module 1

Understanding Outside-In Thinking and Variation Reduction -Section 1
Outside In
Determining the REAL customer Y
What is Variance Based Thinking

Identifying Customer CTQs & Measurements-Big Y thought process-Section2
The Customer view
Problems with Existing Measurements
Average Vs. Variance Based Metrics
Breadth of Measurements-Customer Impact
Adopting the customers measurement of your success

Measurement Systems for Variance Based Ys-Section 3
Traditional problems with Measurement Systems
Correlating your process signal to the customer Y
The impact of a bad measurement system
Attribute Vs. Variable Measurement
Scale of Scrutiny/Inadequate Measurement Units
3.
Outside -In Thinking
4.
y
1
y
n
y
4
y
3
y
2
x
1
x
2
x
n
Phase 1
Learning
1997
Phase 2
Focus
x
6
x
9
x
n
Big Y
1998
Phase 3
Cluster
Big Y
x
n
x
m
Cluster Cluster
Phase 4
Correlation
1999
Y unit measure
x
n
x
m
Y=f(x)
From
Inside-Out
Introduction
To
Outside-In
Likely
Outcome
Learn tools, improve
ys that may not impact
customer. Random,
sporadic results
Drives impact for
selected Y, redundancy,
lack of focus. May not
impact customer Y
Drives impact for selected
Y, coordinated projects
prevents redundancy, big
impact on Y. May not be the
customer Y.
Processes for projects
are identified based on correlation
with customer Y. Successful
projects drive a direct impact to
customer
5.
Our Success Starts and Ends
With The Customer...
Introduction
1. Measure the same as the customer does

2. Determine your capability as the customer sees it

3. Understand the variance in the output signal

4. Find the in-process keys to impact the customer
Does our Y Measurement Reflect
This?
6.
Desired Outcomes
1) Do we have the true Outside-In View?

- Will improving this Y provide direct impact at the customer?

- Will this Y measurement drive the right behaviors in Our Box?
We will get what we measure!
As the mental picture takes shape, 2 key questions to ask :
2) Do we all agree?
- The Y measurement establishes the Mission for our Team.
The Whole Team needs to own the Whole Problem.
7.

Capture the unit & scope that really impacts the customer

From the Customer perspective, define the transactional Unit & Scope

at the smallest, single, product-unit or service-unit the customer needs.
Outside-In
OUTSIDE - IN
Examples order line : OTD, Ind. System: Entire System, quote : response time
Capture the expectation of the customer for this CTQ

From the Customer perspective, define the transactional Measure

that the customer uses to gage performance on this CTQ

Examples days early / late vs request, weeks vs contract, minutes
1)
2)
8.
Principles Of Variance Based Thinking
9.
Obviously We Have a Performance Problem When It Comes To Serving
The Customer...Where Do We Begin?
Overall Output Signal for ALL PRODUCTS/ PLANTS
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150
100
50
+1 Day
0 day
Mean
-2 Days
Notice...On average we
do a great job

But... We fail a significant
proportion of the time
10.
We next need to stratify the OVERALL signal by likely stratification
varibles (product line, different HP applications, )
Probably different PROCESS MAPS- and DIFFERENT CENTRAL TENDENCIES
#

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150
100
50
+1 Day
0 day
Mean
-2 Days
Stratify
Switch Boards
Motor Controls
Limit Amp
11.
Switch Boards
Motor Controls
Limit Amp
Now Select a STRATA to work on
Motor Control was selected as it
explains more of the upper tail
of the overall output signal.
12.
Motor Controls
Within Motor Controls start looking for Segmentation Variables

Different customer groups
Week # within the QTR
Different HP application
Transporation Methods
Dist. Channels
Likely the Same PROCESS MAP and CENTRAL TENDENCIES-
BUT DIFFERENT VARIANCES
13.
By Customer Type May Explain the
Radical Differences in Variation

Industrial
Commercial
Utility (Different levels of variation)
The Goal Is To Stay OUTSIDE YOUR BOX As Long As Possible
To Ensure Linkage To The Customer Y
Motor Controls
Within Motor Controls start looking for Segmentation Variables

Similar Central Tendency
14.
Could These Really Be Two Different Processes? (Or at least one process
behaving two different ways? With Stability And Without?)
CAUTION: THE UNSTABLE PROCESS MAY NOT BE NORMALLY DIST. OR DISTINGUISHABLE
AS A SEPARATE DISTRIBUTION
150
100
50
Outliers were
part of a bigger
Distribution
Deviations For Unstable-
Unpredictable Process-Process
Not Well Behaved
0 Day
Mean
(USL) (LSL)
Deviations For Well Behaved-Predictable
Process
15.
150
100
50
Outliers were
part of a bigger
Distribution
Distribution of Time For Unstable-
Not Well Behaved
Distribution of Time s For Well Behaved-Predictable
Process
If This is Truly The Case, Average-Based Measurements Will Mis-Lead You:

1.) The average doesnt reflect the central tendency of either distribution

2.) On Average you meeting the customer need, but in actuality, your failing a
substantial percentage of the time
0 Days
Mean
16.
After Segmentation...Apply the Six Sigma Methodology to find
and Fix the Xs responsible for the Unacceptable Levels of Variation
At this point we are strictly dealing with Labels --NOT Xs
We MUST Identify the REAL Xs
M
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Age
<20 >40
Label= Age of Driver
M
P
G

True X = Driving Style
Aggressive Conservative
17.
The Flow...
Define Big Y Stratify Segment Drill Down Improve
Arrive on time, alive 9 Businesses 6 Customer Types
Request Met/ 20 Locations 30 Product Types
Delivered

DMAIC
Stay Outside The Box
Y = y (X
1
, X
2
, X
3
, X
4
...X
n
)
18.
150
100
50
Outliers were
part of a bigger
Distribution
Distribution of Time For Unstable-
Not Well Behaved
Distribution of Time s For Well Behaved-Predictable
Process
Given Our Knowledge Of Process Behaviors From Six Sigma Class, We Know:

1.) The Unstable distribution has very special (assignable causes) associated
with it. We need to find and eliminate them using appropriate tools

2.) The stable distribution usually consists of Xs behaving predictably,
therefore creating consistent output.

3.) In order to reduce variation, we should focus on the identifiable and
manageable Xs first-In other words the UNSTABLE DISTRIBUTION

4.) We need measurements that reflect variability in performance which are
covered in module 2
19.
Average Vs. Variance
Based Measurements
20.
17
42
61
58
79
32
57
118
42
48
49
58
62
86
58
46
76
86
104
29
59
45
69
47
67
56
66
55
25
43
53
J an
Feb
Mar
Order
Fulfillment-Build
to Order Motors
(days)
Average
CUSTOMERS VIEW
0 25 50 75 100 125
Min =17
Max =118
GEs VIEW
0 25 50 75 100 125
53
CAPTURE WHAT THE CUSTOMER SEES
- THE ENTIRE DISTRIBUTION OF Y VALUES
Last years average
17
42
61
58
79
32
57
118
42
48
49
58
62
86
58
46
76
86
104
29
59
45
69
47
67
56
66
55
25
43

53

21.
Measurements Drive Behavior:
J an
Feb
Mar
Average
CUSTOMERS VIEW
0 25 50 75 100 125
Min =17
Max =118
GEs VIEW
0 25 50 75 100 125
53
Likely Learning/Behavior
Likely Learning/Behavior
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GE has a range of 101 Days
We MUST plan for worst case
If only they could reduce
variation!
Do they know what we REALLY
care about as a customer?
We beat last years number
The customer must really be
reaping the benefit of our work
Maybe we can use this data
to enhance our relationship
We should keep this kind of
activity up
Why doesnt the customer tell
us of the great job we are doing?

Last years average
Why Dont They Match?
17
42
61
58
79
32
57
118
42
48
49
58
62
86
58
46
76
86
104
29
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69
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67
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66
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25
43
53

22.
Types of Process Measurements:

Attribute Vs. Variable

23.
Attribute Measurements:
Using An Attribute Based Measurement
Is Like Trying To Control Your Steering
By Counting The Number of Times You
Hit The Guard Rail
Variables Measurements:
Using Variables Measurements
Will Give You Direction and
Deviation From Your Intended
Path

24.
Attribute Measurements:
Variables Measurements:
Using an attribute Measurement
is also like trying to diagnose a
automobile problem with the
CHECK ENGINE light
Service Engine Now
Unless youre lucky, you
really dont know where to start
looking for the root cause. You
Also need to worry about false positives,
or silent positives
Using a Variables Measurement gives
you insight into the exact location
and variation of each of the critical
parameters measured.
Using a variables gage, youll
immediately know where to look
based on atypical behavior
of the gage
25.
The Real Power of Variable Data...

150
100
50
30 Days
Term=30 days
Days to Collect Receivables
This distribution paid on time, a few were late
probably due to the delivery system (Physical Mail)
This distribution NEVER intended to
pay on time
Variables data allows you to see the differences in behavior across different
Xs (the late distribution may be high credit risk, or a certain customer type)
26.
150
100
50
Term=30 days
Days to Collect Receivables
This distribution paid on time, a few were late
probably due to the delivery system (Physical Mail)
This distribution NEVER intended to
pay on time
30 Days
Failure=Late Payment
Acceptable=On time
or early
Attribute data only creates two categories, <Acceptable>, <Failure>. All failures
are viewed the same, all acceptable events are viewed the same.
Attribute Data Takes Away Critical Information:
ALL FAILURES ARE VIEWED EQUALLY ALL SUCCESSES ARE VIEWED EQUALLY
27.
Outside - In
The GOOD
Days early/ late per orderline
against requested day.

Hrs availability per locomotive.

Actual cycle time versus
contract cycle time

Quotation response time in
minutes

Nielsen rating vs predicted
rating per program
... and the BAD

% misshipments per week.

Number of locomotive failures
per quarter.

% cycles completed in-time

Responses made per hour

Top 5 Nielsen ratings per week

Note : Select time period over which the data is to be collected.
Select sample size for this period.
28.
Variables data is ALWAYS preferred

In Fact...REQUIRED FOR STABLE OPs
29.
The Breadth Of The
Measurement
30.
1) GE Fully Met Its Contractural Obligations (AB)
2) Customers view determined by their process performance (AC)
Defining the Breadth of Your Y Measurement
Customer
Process
GE Process

C
A
B
GEs View of Its
Contribution
Customer
View of GEs
Contribution
If we cut our process cycle time
would the customer feel it?
31.
Customer
Process
GE Process

C
A B
GEs View of Its
Contribution
Customer View of
GEs Contribution
If we cut our process cycle time
would the customer feel it?
Industrial Systems Example...

If A Customer Ordered an Industrial Motor, A Drive Package, and
Labor To Install/Start Up. What Would Be The Appropriate
Measurement Breadth? The Motor, The Drive Package, The Labor,
Or The Entire Start Up?
32.
Customer Delight
GE process level
A little more of the customers view
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What I
am
Brings a Lot More Satisfaction
....but Sensitive to Variance
Plateau Landscape
Customer Satisfaction
33.
Customer Delight
GE process level
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What I
am
We need to capture far more of the customers view
to Get the Same Level of Satisfaction
Mountain Landscape
34.
GE process level
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What I
am
Flat
No Need to include more of the customers process
Customer Delight
Desert Landscape
35.
Do you understand the Customer Landscape?
Whats the potential to impact the Customer?
Plateau Landscape

Mountain
Landscape

Desert Landscape
Interpretation
Small change in breadth, much more
customers process

Requires a larger change in breadth
to pick up customer process

No matter how broad you measure, you
do not influence the customer success
36.
Does Your MEASUREMENT Of
The Output Signal (Y) Match
The Customers View?
37.
The Measurement System will transmit variation to our data.
+
Actual(Part)
2
=
Output Variability
(Actual variability)
Meas.System
2
Measurement
Variability
Total Variability
(Observed variability)
Process
Inputs
Outputs
Measurement
Process
Inputs Outputs
Observations
Measurements
Data
Documents
(Example)
Good Enough
To Monitor Process
Measurement
Variation WILL
Drive Decision Errors
38.
The Measurement System Can Shift the Centering of Our Data
Process
Inputs
Outputs
Measurement
Process
Inputs Outputs
Observations
Measurements
Data
Actual(Part)

Meas.System
+ =
Avg
Avg
Avg
Ex:
Your Weight
Ex:
Bathroom Scale
Adjust Down By 2 lbs
Ex:
What You See
To Fix Calibration,
You Must Have Operational
Definitions
39.
Av
g
Av
g
Av
g
Ex:
Your Weight
Ex:
Bathroom Scale
Adjust Down By 2 lbs
Ex:
What You See
To Fix Calibration,
You Must Have
Operational
Definitions
Industrial Systems Example:

Urgent Order = Pad By 1 Week
Critical Order = Pad By 2 Weeks
Very Critical Order = Pad by 3 Weeks
What About Reproducibility Between Sales People?
40.
Actual Delivery
- Tuesday
Measured Delivery
- Thursday
Max Range of Measurement Error
Delivered on-time - Customer is happy
Measured as being late - We take action to correct
- 1 Day + 1 Day (Customer Specs)
On-Time
CYCLE TIME vs Request
41.
On-Time
Actual Delivery
- Tuesday
Measured Delivery
- Thursday
Max Range of Measurement Error
Delivered early - Customer is unhappy
Measured as on-time - Great J ob!
42.
On-Time
Measured Delivery
- Tuesday 10:00am
MRME
Actual Delivery
- Tuesday 14:00am
Close Enough to Understand Sources of Variation In Your Process
43.
Your Evaluation of Delivery
Measurement
On Time
Delivery
The
Truth
On Time
Delivery
Late Delivery
Type I
Error
(a-Risk)
Type II Error
(b -Risk)
Correct
Correct
Late Delivery
Consequences: Your customer observed a late delivery
and you IGNORE IT
Consequences:
You waste resources
looking
for a non-existent
Failure
44.

X: Actual Delivery
Target: Promise Date
x
x
x
x
x
x
x
x
x
x
x
x
x
x x
x x
x
x
x
x
x
x x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Consistently
Measuring with
A Bias
Solution: Calibrate
Your Measurement With The Customer
(Hint: Operational Definition)
Inconsistent and
Biased Measurements
Solution: Calibrate First (see above)
Find source of variation through MSA
Inconsistent Measurements
Solution:
Find source of variation through MSA
Together Accuracy & Variation Issues Prevent You From Measuring Your Process
45.
Measurment System Analysis Issues
for
Variables Data (Continuous Data)

(How can I tell whether I have too much
rounding in my data?)
Scale of Scrutiny
46.
Two Big Scale Of Scrutiny (Measurement Units) Issues:

1.) Prevent you from seeing the REAL variation in the process (Big Y), and will
make it difficult(if not impossible) to find the X-Y relationships.

2.) Mask smaller but potentially important process changes

3.) Will not allow you adequate reaction time to prevent process failures.
You will know only slightly before (or sometimes after) the customer knows
youve failed.
Inadequate Scale of Scrutiny WILL:
47.
Scale of Scrutiny
Scale of Scrutiny
10 Tablets

Acetaminophen content

Target 2000 mg
Actual 2005 mg
Almost no variance
48.
Scale of Scrutiny
1 Tablet


Target 200 mg
Actual 201 mg
Still no variance
Scale of Scrutiny
49.
Scale of Scrutiny
Tablet


Expected 100 mg
Actual 156 mg
Large Variance
- Could be dangerous!
Scale of Scrutiny
50.
Scale of Scrutiny
The Smaller the Scale of Scrutiny

The Larger the % Variance
Decide the Scale of Scrutiny that the Customer uses

What is your internal scale of scrutiny to control the output?
Scale of Scrutiny
51.
Inadequate Measurement Units

Based on Evaluating the Measurement Process by Wheeler & Lyday, 1984
Will Eliminate The TRUE Variation From
ShowingUp in Your Measurement of The Big Y
Therefore Prevent You From Reducing It
52.
What do these charts tell us about our process?
0.136
0.138
0.140
0.142
0.144
5 10 15 20 25
Subgroup#
Avg=0.1403
LCL=0.1375
UCL=0.1431
0.000
0.005
0.010
0.015
0.020
5 10 15 20 25
Subgroup#
Avg=0.0048
LCL=0.0000
UCL=0.0102
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X-bar
Chart
Range
Chart
53.
Inadequate Measurements Units
Measurement units which are too large to
properly reflect the variation present.
A type of inadequate discrimination due to
excessive round-off of measurements or
an inappropriately designed measurement
system
Definition:
54.
About Inadequate Measurement Units:
One of the simplest measurement system problems
Problem is fairly widespread, but impact is rarely
recognized.
Easily detected by ordinary control charts for process
or product measurements.
No special studies are necessary
No known standards are needed.
Example: The data in the following table are the
thickness measurements of a plastic plate. The data
are recorded in inches, but the smallest measurement
unit is one / one-thousandth of an inch (0.001 in.).
55.

Sub-
group
Part 1 Part 2 Part 3 Part 4 Part 5 X-bar
(Avg)
Range Sub-
group
(Avg)
Range
1 0.140 0.143 0.137 0.134 0.135 0.1378 0.009 15 0.144 0.142 0.143 0.135 0.144 0.1416 0.009
2 0.138 0.143 0.143 0.145 0.146 0.1430 0.008 16 0.133 0.132 0.144 0.145 0.141 0.1390 0.013
3 0.139 0.133 0.147 0.148 0.149 0.1432 0.016 17 0.137 0.137 0.142 0.143 0.141 0.1400 0.006
4 0.143 0.141 0.137 0.138 0.140 0.1398 0.006 18 0.137 0.142 0.142 0.145 0.143 0.1418 0.008
5 0.142 0.142 0.145 0.135 0.136 0.1400 0.010 19 0.142 0.142 0.143 0.140 0.135 0.1404 0.008
6 0.136 0.144 0.143 0.136 0.137 0.1392 0.008 20 0.136 0.142 0.140 0.139 0.137 0.1388 0.006
7 0.142 0.147 0.137 0.142 0.138 0.1412 0.010 21 0.142 0.144 0.140 0.138 0.143 0.1414 0.006
8 0.143 0.137 0.145 0.137 0.138 0.1400 0.008 22 0.139 0.146 0.143 0.140 0.139 0.1414 0.007
9 0.141 0.142 0.147 0.140 0.140 0.1420 0.007 23 0.140 0.145 0.142 0.139 0.137 0.1406 0.008
10 0.142 0.137 0.134 0.140 0.132 0.1370 0.010 24 0.134 0.147 0.143 0.141 0.142 0.1414 0.013
11 0.137 0.147 0.142 0.137 0.135 0.1396 0.012 25 0.138 0.145 0.141 0.137 0.141 0.1404 0.008
12 0.137 0.146 0.142 0.142 0.146 0.1426 0.009 26 0.140 0.145 0.143 0.144 0.138 0.1420 0.007
13 0.142 0.142 0.139 0.141 0.142 0.1412 0.003 27 0.145 0.145 0.137 0.138 0.140 0.1410 0.008
14 0.137 0.145 0.144 0.137 0.140 0.1406 0.008 . . . . . . . .
0.134
0.136
0.138
0.140
0.142
0.144
0.146
5 10 15 20 25
Subgroup#
Avg=0.1406
LCL=0.1357
UCL=0.1456
0.000
0.005
0.010
0.015
0.020
5 10 15 20 25
Subgroup#
Avg=0.0086
LCL=0.0000
UCL=0.0181
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Smallest Measurement Unit = 0.001 inch Y = Plate Thickness
Neither the X-bar Chart nor
Range Chart show any
indications of lack of control.
The underlying physical
process appears quite stable
and predictable.
Derived from Evaluating The Measurment Process by Wheeler and Lyday
(1989)
Based on Evaluating the Measurement Process by Wheeler & Lyday,
1984
56.

Sub-
group
(Avg)
Range Sub-
group
(Avg)
Range
1 0.14 0.14 0.14 0.13 0.14 0.138 0.01 15 0.14 0.14 0.14 0.14 0.14 0.140 0.00
2 0.14 0.14 0.14 0.14 0.15 0.142 0.01 16 0.13 0.13 0.14 0.14 0.14 0.136 0.01
3 0.14 0.13 0.15 0.15 0.15 0.144 0.02 17 0.14 0.14 0.14 0.14 0.14 0.140 0.00
4 0.14 0.14 0.14 0.14 0.14 0.140 0.00 18 0.14 0.14 0.14 0.14 0.14 0.140 0.00
5 0.14 0.14 0.14 0.14 0.14 0.140 0.00 19 0.14 0.14 0.14 0.14 0.14 0.140 0.00
6 0.14 0.14 0.14 0.14 0.14 0.140 0.00 20 0.14 0.14 0.14 0.14 0.14 0.140 0.00
7 0.14 0.15 0.14 0.14 0.14 0.142 0.01 21 0.14 0.14 0.14 0.14 0.14 0.140 0.00
8 0.14 0.14 0.14 0.14 0.14 0.140 0.00 22 0.14 0.15 0.14 0.14 0.14 0.142 0.01
9 0.14 0.14 0.15 0.14 0.14 0.142 0.01 23 0.14 0.14 0.14 0.14 0.14 0.140 0.00
10 0.14 0.14 0.13 0.14 0.13 0.136 0.01 24 0.13 0.15 0.14 0.14 0.14 0.140 0.02
11 0.14 0.15 0.14 0.14 0.14 0.142 0.01 25 0.14 0.14 0.14 0.14 0.14 0.140 0.00
12 0.14 0.15 0.14 0.14 0.15 0.144 0.01 26 0.14 0.14 0.14 0.14 0.14 0.140 0.00
13 0.14 0.14 0.14 0.14 0.14 0.140 0.00 27 0.14 0.14 0.14 0.14 0.14 0.140 0.00
14 0.14 0.14 0.14 0.14 0.14 0.140 0.00 . . . . . . . .
Smallest Measurement Unit = 0.01 inch Y = Plate Thickness
0.136
0.138
0.140
0.142
0.144
5 10 15 20 25
Subgroup#
Avg=0.1403
LCL=0.1375
UCL=0.1431
0.000
0.005
0.010
0.015
0.020
5 10 15 20 25
Subgroup#
Avg=0.0048
LCL=0.0000
UCL=0.0102
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The data in this table were
derived from the previous
data table by rounding off
each value to the nearest
one/one-hundredth of an
inch (0.01 in.).
Values ending in 5 were
rounded to the nearest even
multiple of 0.01.
Then, the subgroup
averages and ranges were
recalculated.
Derived from Evaluating The Measurment Process by Wheeler and Lyday (1989)
57.
Consequences of Inadequate Measurement Units
Both the X-bar Chart and
Range Chart for the rounded
data show points outside the
control limits, although the
underlying physical process
is quite stable!
Information lost in the round-
off caused the following
distortions:
Deflated Avg Range
Deflated estimate of within-
subgroup Std.Dev.
Other statistics involving this
within-subgroup variation
estimate are suspect.
Range Chart limits too tight
X-bar Chart limits too tight
Greater discreteness for both the
average and range values,
spreading-out the plotted points.
0.136
0.138
0.140
0.142
0.144
5 10 15 20 25
Subgroup#
Avg=0.1403
LCL=0.1375
UCL=0.1431
0.000
0.005
0.010
0.015
0.020
5 10 15 20 25
Subgroup#
Avg=0.0048
LCL=0.0000
UCL=0.0102
M
e
a
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o
f

T
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s
s

R
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58.
In the lower Range
Chart, we can easily
see that there are only
two possible values for
the range within the
control limits.
This suggests that our
measurement units are
too large to properly
reflect the within-
subgroup variation.
Information about
dispersion is lost in
the round-off.
Other statistics
involving this within-
subgroup variation
estimate are suspect.
0.000
0.005
0.010
0.015
0.020
5 10 15 20 25
Subgroup#
Avg=0.0086
LCL=0.0000
UCL=0.0181
R
a
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g
e

o
f

T
h
i
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k
n
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s
s

0.000
0.005
0.010
0.015
0.020
5 10 15 20 25
Subgroup#
Avg=0.0048
LCL=0.0000
UCL=0.0102
R
a
n
g
e

o
f

T
h
i
c
k
n
e
s
s

Range Chart for Thickness Measurements to 0.001 in.
Range Chart for Thickness Measurements to 0.01 in.
Visual Detection of Inadequate Measurement Units
59.
Rules for Detecting Inadequate Measurement Units
The measurement unit borders on being too large when
there are only 5 possible values within the control limits on
the Range Chart.
4 values within the limits will be evidence of Inadequate Measurement
Units
1, 2, or 3 possible values will result in substantial distortion.
The only exception to this occurs when the Subgroup Size
for the Range Chart is n = 2.
3 possible values within the limits will be evidence of Inadequate
Measurement Units.
1 or 2 possible values will result in substantial distortion
Also, beware if more than 25% of the ranges are zero.
In other words, inadequate discrimination due to
measurement units which are too large begins to affect
statistical analyses when the Measurement Unit is greater
than the Standard Deviation of the process (behavior) we
intend to study.
Derived from Evaluating The Measurment Process by Wheeler and Lyday (1989)
60.
What Can Be Done About Inadequate Measurement Units?
Measure and report to as many decimal places as the
measurement device permits.
Sometimes the measurement unit will be too large simply because the
someone truncated to a certain level in order to avoid (they believe)
reporting noise.
This may actually be cutting off part of the signal! Recording one extra
digit will usually be enough to eliminate this source of inadequate
discrimination.
Seek a measurement device that can measure smaller units.
If there is nothing else can be done right away, you may have
to live with it, for now. Document that the problem exists.
Priorities may need to involve other considerations:
Is this a study of the total process variation or a special study of a sub-
component of the process variation (where we might be trying to detect
smaller differences, shifts, or variation)?
What is engineering tolerance? Process Capability?
Cost and difficulty in replacing device?
61.
Capturing the Measurement
Outside-In Process Scope Broad enough customer-process view
( Repair time - TAT - Wing To Wing )

Execution Scope Have you captured the whole customer expectation
( request vs promise/negotiated vs standard )

Scale of Scrutiny Unit What is the Granularity the customer looks at?
e.g. Forecast Order vs Specific order vs
Specific order-line vs Items in order-line

Measure At what level does the customer see differences?
e.g. for Time: weeks, days, hrs, or minutes

GR & R Make sure that what youre measuring is real
Skills for 6 Leaders - You Must Be Able to Do This
CHECKLIST FOR MEASURING THE Y
62.
Hints on Measurement errors :
1) Its always a bigger deal than you think-ALWAYS!
2) Scale of scrutiny is key - if 1 day is important then measure in hours
3) Aim at 10% of customer window as max allowable measurement error
(probability of mis-classification, or % contribution to variation)

Remember the Measurement System Issues:
Accuracy & Precision
Excessive Variablility
Operational Definitions that Match the Customers

63.
If You Have An Inadequate
Measurement System...

STOP!
YOU MUST FIX THE MEASUREMENT
SYSTEMS FIRST

All Your Activity is at risk of
being BENIGN
(For Methods to Reduce Measurement Errors-See Chpt. 9 in The Black Belt or
Green Belt Material Or See A BB or MBB.
64.
Breakout:

Measurement Systems Validation
65.
The Scenario:
The business has decided to initiate a variation reduction project
for RQ (requests kept) for small AC drives sold through
distributors.
You begin by validating the measurement system
Select the largest distributor, also has the most disagreement and
performance problems with
Data is collected at both the distributor site as well as in your
factories
Given your Six Sigma training on MSA, plus the new insight
obtained through module 1-Variation Based Thinking Course,
determine of the following measurements are acceptable to use
for analysis
66.
File: VBT_MSA.mtw
Variables:
Delivery ID: Delivery Sequence Number
Dist_Dev_FR_REQ: Distributor Meas. of Deviation from Request
GE_Dev_FR_REQ : GEs internal measure of Deviation from Request

Breakout Questions:
Do the numbers agree?
If not: Is there a difference in the variation (precision),
or the mean (accuracy)?
If a difference exists, what could be causing such a difference?
Is this data good enough to begin an analysis?
What would be your next step?
67.
INSTRUCTOR PAGE:
Since these data are measurements of the same delivery events, and
the data are paired, we can quickly check for disagreement:
Step 1: Do the overall distributions match?
Stat>Basic Stats>Descriptive Stats
68.
INSTRUCTOR PAGE:
69.
GEs Measurements
Distributors Measurements
Centering is about the same
1
37.5 25.0 12.5 0.0 -12.5 -25.0
95%Confidence Interval for Mu
3 2 1
95%Confidence Interval for Median
Variable: GE_Devia
1.0000
11.5437
0.5408
Maximum
3rd Quartile
Median
1st Quartile
Minimum
N
Kurtosis
Skewness
Variance
StDev
Mean
P-Value:
A-Squared:
3.0000
13.0704
2.6952
40.0000
10.0000
2.0000
-6.0000
-29.0000
500
7.52E-02
9.56E-02
150.293
12.2594
1.6180
0.295
0.437
95%Confidence Interval for Sigma
Anderson-Darling Normality Test
Descriptive Statistics
13 8 3 -2 -7 -12
95% Conf idence Interval f or Mu
2 1 0
95% Conf idence Interval for Median
Variable: Dist_Dev
0.0000
5.4405
0.4803
Maximum
3rd Quartile
Median
1st Quartile
Minimum
N
Kurtosis
Skewness
Variance
StDev
Mean
P-Value:
A-Squared:
2.0000
6.1600
1.4957
17.0000
5.0000
1.0000
-3.0000
-14.0000
500
-3.5E-01
1.85E-02
33.3826
5.77777
0.98800
0.003
1.229
95% Conf idence Interval f or Median
95% Conf idence Interval f or Sigma
95% Conf idence Interval f or Mu
1: To test for difference use a t-test or ANOVA 2: Could validate with CI of SIGMA or Homogeneity of Variance test
Distributor measurements have about 2Xs the variability
2
Variable N Mean Median Tr Mean StDev SE Mean
GE_Dev_F 500 0.988 1.000 0.991 5.778 0.258
Dist_Dev 500 1.618 2.000 1.520 12.259 0.548

Variable Min Max Q1 Q3
GE_Dev_F -14.000 17.000 -3.000 5.000
Dist_Dev -29.000 40.000 -6.000 10.000

70.
From our simple analysis, a couple of things are evident:

On average we are serving the distributor well
Our measurement systems agree-ON AVERAGE
There is significantly more variation in GEs measurements of the
delivery events (same events-Why?). Differences:
More variation showing up in difference between Q3 and Q1
Confidence intervals of the Standard Deviations
Graphically (Interrocular test)
What could cause this kind of diffence?
Operation definitions (How do we define the request date?)
Variation in how the date is logged?
Data handling/integrity errors?
The feedback loop (how the date gets back to GE)
INSTRUCTOR PAGE:
71.
Since we have paired data, we could get much more insight into
where the variation might be coming from (paired t-test, Control
charts for the delta (GE-Distributor date), Multi-vari by Xs to find
sources of variation. BUT:

Usually this kind of problem is easy to fix-

Make sure you have defined measurement points
Look for hand off errors (red flag conditions)
Poor data handling procedures
Calibration with the customers measurement
Sometimes youll have to get inside the process to find the person,
type of job, or period (Xs) that are causing the issue, but generally it
is system wide.
INSTRUCTOR PAGE:
72.
The Scenario:
The business has decided to initiate a variation reduction project
for RQ (requests kept) for OEMs for small motors.
You begin by validating the measurement system
Data is collected at both the OEM site as well as in your
factories
Given your Six Sigma training on MSA, plus the new insight
obtained through modeule 1-Variation Based Thinking Course,
determine of the following measurements are accepatble to use
for analysis
73.
File: VBT_MSA.mtw
Variables:
Delivery ID: Delivery Sequence Number
OEM : OEM Meas. of Deviation from Request
GE: GEs internal measure of Deviation from Request

Breakout Questions:
Do the numbers agree?
If not: Is there a difference in the variation (precision),
or the mean (accuracy)?
Is there a difference in the shape of the distributions?
Are they normal?
If a difference exists, what could be causing such a difference?
Is this data good enough to begin an analysis?
What would be your next step?
74.
12.5 10.5 8.5 6.5 4.5 2.5 0.5
1.0 0.5 0.0
Variable: OEM
0.0000
1.5528
0.8451
Maximum
3rd Quartile
Median
1st Quartile
Minimum
N
Kurtosis
Skewness
Variance
StDev
Mean
P-Value:
A-Squared:
0.0000
1.7581
1.1349
13.0000
1.0000
0.0000
0.0000
0.0000
500
12.0024
2.87390
2.71934
1.64904
0.99000
0.000
57.446
5.5 4.0 2.5 1.0 -0.5 -2.0 -3.5
-2.35 -2.45 -2.55 -2.65 -2.75 -2.85 -2.95 -3.05
Variable: GE
-3.00000
1.60442
-2.67371
Maximum
3rd Quartile
Median
1st Quartile
Minimum
N
Kurtosis
Skewness
Variance
StDev
Mean
P-Value:
A-Squared:
-3.00000
1.81661
-2.37429
6.00000
-2.00000
-3.00000
-4.00000
-4.00000
500
6.53823
2.31396
2.90323
1.70389
-2.52400
0.000
40.648
Variable N Mean Median Tr Mean StDev SE Mean
OEM 500 0.9900 0.0000 0.7578 1.6490 0.0737
GE 500 -2.5240 -3.0000 -2.7556 1.7039 0.0762

Variable Min Max Q1 Q3
OEM 0.0000 13.0000 0.0000 1.0000
GE -4.0000 6.0000 -4.0000 -2.0000

Measureable difference in mean, but compariable Std. Dev.s
75.
Since we have paired data, we could get much more insight into
where the variation might be coming from (paired t-test, Control
charts for the delta (GE-Distributor date), Multi-vari by Xs to find
sources of variation. BUT:

Usually this kind of problem is easy to fix-

There seems to be almost a two day difference in our measurement Vs.
the OEMs
You should begin by comparing measurement point
Make sure the Start/Stop points are the same
Poor handling procedures
Calibration with the customers measurement

INSTRUCTOR PAGE:
76.
Agenda-Module 1

Understanding Outside-In Thinking and Variation Reduction -Section 1
Outside In
Determining the REAL customer Y
What is Variance Based Thinking

Identifying Customer CTQs & Measurements-Big Y thought process-Section2
The Customer view
Problems with Existing Measurements
Average Vs. Variance Based Metrics
Breadth of Measurements-Customer Impact
Adopting the customers measurement of your success

Measurement Systems for Variance Based Ys-Section 3
Traditional problems with Measurement Systems
Correlating your process signal to the customer Y
The impact of a bad measurement system
Attribute Vs. Variable Measurement

Outside in Thinking

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