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Marketers Are Embracing Statistical Design of Experiments by Richard Burnham.
For more on Design of Experiments see:
A Lean Walk Through History by Jim Womack
author of Lean Thinking Banish Waste and Create Wealth in Your Corporation by James P. Womack and Daniel T. Jones, 2003 and The Machine That Changed the World The Story of Lean Production by James P. Womack, Daniel T. Jones and Daniel Roos, 1991.
By 1765, French general Jean-Baptiste de Gribeauval had grasped the significance of standardized designs and interchangeable parts to facilitate battlefield repairs. (Actually doing this cost-effectively in practice was another matter and required another 125 years.)
By 1807 Marc Brunel in England had devised equipment for making simple wooden items like rope blocks for the Royal Navy using 22 kinds of machines that produced identical items in process sequence one at a time.
By 1822 Thomas Blanchard at the Springfield Armory in the U.S. had devised a set of 14 machines and laid them out in a cellular arrangement that made it possible to make more complex shapes like gunstocks for rifles. A block of wood was placed in the first machine, the lever was thrown, and the water-powered machine automatically removed some of the wood using a profile tracer on a reference piece.
Six-Sigma: the Evolution of 100 Years of Business Improvement Methodology by Ronald D. Snee.
The article includes a nice very quick summary of the development of statistical methods to aid management improvement in the last 100 years. Then the article gives a good overview of Six Sigma.
First, Six-Sigma places a clear focus on getting bottomline results…
Next, Six-Sigma builds on improvement methods that have been shown to be effective and integrates the human and process elements of improvement…
The third key characteristic of Six-Sigma is that it sequences and links the improvement tools into an overall approach…
The fourth key characteristic is that Six-Sigma creates an infrastructure of
Champions, Master Black Belts (MBB), Black Belts (BB) and Green Belts (GB) that
lead, deploy and implement the approach…
Six-Sigma is based on the scientific method, utilising statistical thinking and methods (Hoerl and Snee, 2002). Statistical thinking, therefore, is fundamental to the methodology because Six-Sigma is action-oriented, focuses on processes used to serve customers, and defect reduction through variation reduction and improvement goals.
And the article closes with a case study.
Statistical Method Helps Boost Bottom Lines, Batting Averages by Jon Van, Chicago Tribune:
The article also mentions:
“Multifactor experiments have been around for a long time,” said Ajit Tamhane, Northwestern University professor of statistics and industrial engineering and management sciences.
…
David Coit, a Rutgers University professor of industrial systems engineering, said that Holland’s MVT is very much like a quality-enhancing scheme called design of experiments.
So often we seem to focus on proprietary solutions. Instead it seems to me, most often what is needed is to do a good job of applying the ideas that have been known for decades. Deming ideas, design of experiments, lean thinking, experimentation, etc. are not secrets. There is a long history of how to apply these ideas to improve organizational performance.
QualPro obviously does well marketing itself (see press clippings from their web site) selling the concept of proprietary solutions to press organizations. Raising the question of whether the proprietary solutions really offers unique ideas, as the The Tribune article did was uncommon in my experience.
I like those encouraging the adoption of statistical tools to improvement management but I find the practice of trademarking terms like Six Sigma and MVT a bad way to encourage innovation in the practice of management. While it is nice to see Six Sigma efforts and others use statistical tools (such as design of experiments) I would encourage people to stay with “open source” management terms and remain part of a community looking to improve the practice of management.
Update: Also see - Management Advice Failures
The Lessons of Six Sigma: Management tool helped refocus priorities, by Napoleon Carroll and Christa Casleton :
Lean Manufacturing is Better Business for Ariens:
Iran Society for Quality - Blog. I can’t read most of the site, but they seem to have a blog.
Topic: Economics
China to Raise Tariffs On Clothing Exports, from the Washington Post:
If the Chinese government must reduce the amount of the world textile trade that their country is taking, or face retaliation from other countries, this is a very smart move. Essentially China gets to tax the United States, Europe, etc. and be thanked for doing so by the governments of those countries. Such is the odd nature of international trade these days.
The Chinese government is going to tax textiles being exported by China. Therefore when an American picks up a shirt at the mall it will include a new tax to the Chinese government and this is seen as a good thing by the American government. An alternative would be for the American government to tax imports. Then the tax paid by the American consumer would go to the United States government instead. It seems odd that the American government thinks it is better to pay a tax to the Chinese government than to the American government but that seems to be what their policy and statements support.
(more…)
One Perspective on the Future of Six-Sigma by Roger Hoerl. Originally published in the International Journal of Six Sigma and Competitive Advantage 2004 - Vol. 1, No.1 pp. 112 - 119.
Roger Hoerl, leader of the Applied Statistics Lab at GE Global Research, is one of the leading lights in the Six Sigma movement - in my opinion. He has also co-authored several excellent books:
You can also view more articles by Roger Hoerl via the Curious Cat Management Improvement Library.
Topic: Management Improvement
We have started a new blog, Curious Cat Management Articles, specifically to highlight management improvement articles on topics like: Lean Manufacturing, Deming, Six Sigma, Continuous Improvement, Innovation, Customer Focus, SPC and System Thinking.
We are still working out the best way we can use blogs effectively. Our current plan has several blogs targeted for slightly different audiences (so you may be interested in one, or several or all). The current Curious Cat Blogs:
Why Go Through the Painful Performance Process:
See also the previous Curious Cat posts on Performance Appraisals.
RE: Seth on Arbitrage from John Battelle’s Searchblog
Thanks for the great blog. I have to disagree with this post however. First, I think Google chooses not to disclose more to investors mainly because the founders don’t go along with conventional wisdom. They would rather examine whether something is a wise use of management resources, and if not, don’t just do something just because most everyone else does. I don’t think the keeping trade secrets has much to do with their reason for not feeding the wall street analysts.
Google’s IPO is another example of their decision to take a different path than other companies. Also the stories I have read about how the founder’s reacted to venture capital requests (demands is probably what the venture capitalists thought they were until they capitulated) showed the founders tendencies to go their own way. They could get the money they needed without having to go along with the rules others wanted to impose on them. It is a great benefit to Google that management can focus on more important things, but it will likely become an issue again when the incredible growth of profits Google has been achieving eventually slow.
Second I disagree that what Google does is arbitrage. They do have a great money making machine. But what they did was provide a service that people liked. Then they found a way to get those who wanted access to their users (to advertise) to pay Google well for the privledge. And Google did a good job of finding a solution that those paying the bills liked. That it has worked for those paying the bills shows the advantage of designing a system that benefits you and your customer. Many internet companies got their customers (other companies) to pay them lots of money but when their customers failed to make money (and many then went out of business) then you had fewer (or no) customers left. Just like teaching someone to fish provides a greater benefit than giving them one fish, a customer that is able benefit from your service and prosper and continue to be your customer is better than a customer you lose (because they don’t benefit from the relationship with you).
Then Google expanded the market by modifying their technology to provide other web sites a way to be paid by advertisers. The system Google had developed did a great job of getting advertisers to bid against each other to increase Google’s revenues. And Google then modified their display of ads to reflect their analysis of the page content to again take great advantage of their existing technology. In this case, Google took some of the money the advertiser pays for the service that Google provides.
For Google to be using arbitrage they would have to, for example, pay your site some amount each month to run ads and then sell that right to someone else. Since they don’t, in fact, pay you to run ads on your site with the hope they can charge others more for the right to use the ad space they bought from you. Google takes a percentage what the advertisers pay, that is not arbitrage.
Google, to use a internet bubble phrase, is doing a good job monetizing eyeballs. However, that is not arbitrage it is just doing a good job of maximizing revenue and profits. Yes Google is able to make money because they are paid more by advertisers than it costs them to deliver what the advertisers want. But I don’t see how that is more like arbitrage than Toyota selling a car for less than it costs them to make the car.
Thinking Lean by Doug Rich and Dave Bassett, from the May 2005 edition of Manufacturing Engineering.
Competing on the Basis of Time:
From the Poppendieck web site, authors of Lean Software Development: An Agile Toolkit for Software Development Managers.
Search for Improvement With Complex Six Sigma by Helen D’Antoni:
Shingo’s ‘Know Why’ Hands-On Lean by Bill Waddell. From Superfactory:
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