Using SPC to Make Better Management Decisions
Mark GrabanAuthor, Lean Hospitals
Co-Author, Healthcare Kaizenwww.MarkGraban.com
@MarkGraban
Key Management Questions• How are we performing?– Are we getting better or worse?
• What action should we take?
“Failure to understand variation is a central problem of management.”
– Dr. Lloyd S. Nelson Some rights reserved by Marco Bellucci
My Most Favorite Book Ever
http://www.spcpress.com/Donald J. Wheeler, PhD
“No data have meaning apart from their context”
Comparisons in the News
1992 1995 1998 2001 2004 2007 20100
0.20.40.60.8
11.21.41.61.8
2
Fatalities per 100 Million Vehicle Miles Traveled (U.S. & CT)
U.S.
CT
Need to Look for Trends
“You don't want to make a big conclusion based on just one year.”
– Jonathan Adkins of the Governors Highway Safety Association
“Office Space”
Two-Point Comparisons in Politics
47%46%
44%44%
Did We Improve?
Run Charts Show More Context
Need to Avoid Bad Conclusions“The average patient satisfaction
increased from 87.2 to 89%”
A Better Dashboard
Limited information you need to make decisions
Not This…
Overwhelming Data
Sept ‘06
?
Can we predict September?
Can We See Trends?
The Good News…
There is a better way
“X” Control Chart(Chart for Individual Values)
“Every system is perfectly designed to get the results it gets.” (Deming)
Goal = 25 minutes
SD = Standard Deviation, a measure of variation
X and MR Chart Combo
Small Business ExampleRevenue as a Stable Process?
X chart
MR chart
Deming’s 7 Concepts of Variation1. All variation is caused – specific reasons.2. There are 4 types of causes:
1. Common causes 2. Special causes 3. Tampering 4. Structural
3. Managers must distinguish amongst these– Each one requires different managerial actions.
Deming’s 7 Concepts of Variation4. For special causes, get timely data5. For common causes, all data are relevant. – In-depth knowledge of the process being improved is
needed – statistics, flow charts, Pareto, stratification analysis, DOE
6. When all variation is common cause, the system is said to be “stable” and “predictable.”
7. SPC limits let a manager predict future performance with some confidence.
The Funnel Experiment
• Lloyd Nelson, 1987– Suspend a funnel on a stand a
few inches off the ground– Drop 50 marbles
x
A “Stable” System
• Does NOT mean:– Zero variability– System meets customer
requirements
• Means only:– Causes of variation are basically constant over time
We Have to Try Harder!!!• 4 different rules for adjusting the funnel
No adjustmentAdjust relativeto last position
Adjust relativeto center
Learn more – online simulator at http://www.symphonytech.com/dfunnel.htm
So we should do nothing?
“Don’t just do something, stand there.” -- Deming
0
10
20
30
40
50
60
3/1/07
3/2/07
3/3/07
3/4/07
3/5/07
3/6/07
3/7/07
3/8/07
3/9/07
3/10/07
3/11/07
3/12/07
Responding to Daily Changes
KB
GOAL
Daily Production AveragePraise Team
PT PT
Are we helping? Is this process stable?
KBKick Butt
Creating a Control Chart
0
10
20
30
40
50
603/1/2007
3/3/2007
3/5/2007
3/7/2007
3/9/2007
3/11/2007
3/13/2007
3/15/2007
3/17/2007
3/19/2007
Upper Control Limit
Lower Control Limit
Step 1: Initial Data• Generally need 20 data
points to calculate control limits
Step 2: Mean & MRs• Calculate mean of the
first 20 points• Calculate the moving
range of the first 20 points– Ex: =ABS(E5-E4)
Step 3: Draw Initial Chart(with Mean line)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 220
500
1000
1500
2000
2500 LeanBlog.org Daily Page Loads
Step 4: Add Control Limits• Calculate “MR-bar”– Average of the 1st 19
MRs
• Calculate Control Limits– LCL = Mean – 3*(MR bar)/1.126– UCL = Mean + 3*(MR bar)/1.126
Step 5: Review Chart
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 220
500
1000
1500
2000
2500LeanBlog.org Daily Page Loads
Special Cause?
Step 6: Revise Limits
Step 7: Evaluate Over Time
1 2 3 4 5 6 7 8 9 1011121314151617181920212223242526272829303132333435363738394041424344454647484950510
500
1000
1500
2000
2500
3000LeanBlog.org Daily Page Loads
Step 7: Evaluate Over Time
1 2 3 4 5 6 7 8 9 1011121314151617181920212223242526272829303132333435363738394041424344454647484950510
500
1000
1500
2000
2500
3000LeanBlog.org Daily Page Loads
Step 7: Shift the Limits
1 2 3 4 5 6 7 8 9 1011121314151617181920212223242526272829303132333435363738394041424344454647484950510
500
1000
1500
2000
2500
3000LeanBlog.org Daily Page Loads
“Western Electric” Rules (1956)• 8 consecutive points on same side of mean
• 6 consecutive points moving same direction
• 14 alternating up/down points in a row
• Any single point above or below 3-sigma LCL or UCL
– Full rules http://bit.ly/WErules
Process Shifts
• If you made a change that you expected to improve the system, use a control chart to test the hypothesis
0
5
10
15
20
25
30
35
1 4 7
10
13
16
19
22
25
28
31
34
37
40
43
46
49
52
0
5
10
15
20
25
30
35
1 4 7
10
13
16
19
22
25
28
31
34
37
40
43
46
49
52
0
5
10
15
20
25
30
35
1 4 7
10
13
16
19
22
25
28
31
34
37
40
43
46
49
52
0
5
10
15
20
25
30
35
1 4 7
10
13
16
19
22
25
28
31
34
37
40
43
46
49
52
0
5
10
15
20
25
30
35
1 4 7
10
13
16
19
22
25
28
31
34
37
40
43
46
49
52
Process Shift
Daily TAT
Long-Term Process Shifts
NOT Understanding Variation Leads To…
• Pressuring people to get better results by working harder within the same system
• Wasting time looking for explanations of a perceived trend when nothing has changed
• Taking other actions when it would have been better to do nothing
• Not focusing on systemic improvements
Isn’t it always the system?
It’s (almost) always the system.
Q&A / Contact Info• Email:
– [email protected] • Blog:
– www.leanblog.org• Twitter:
– @MarkGraban• Books:
– www.LeanHospitalsBook.com– www.HCkaizen.com
