1

Lean manufacturing
Lean manufacturing or lean production, often simply, "Lean," is a production practice
that considers the expenditure of resources for any goal other than the creation of value
for the end customer to be wasteful, and thus a target for elimination. Working from the
perspective of the customer who consumes a product or service, "value" is defined as any
action or process that a customer would be willing to pay for. Basically, lean is centered
on preserving value with less work. Lean manufacturing is a generic process management
philosophy derived mostly from the Toyota Production System (TPS) (hence the term
Toyotism is also prevalent) and identified as "Lean" only in the 1990s.[1][2] It is renowned
for its focus on reduction of the original Toyota seven wastes to improve overall customer
value, but there are varying perspectives on how this is best achieved. The steady growth
of Toyota, from a small company to the world's largest automaker,[3] has focused
attention on how it has achieved this.

Lean manufacturing is a variation on the theme of efficiency based on optimizing flow; it

is a present-day instance of the recurring theme in human history toward increasing
efficiency, decreasing waste, and using empirical methods to decide what matters, rather
than uncritically accepting pre-existing ideas. As such, it is a chapter in the larger
narrative that also includes such ideas as the folk wisdom of thrift, time and motion
study, Taylorism, the Efficiency Movement, and Fordism. Lean manufacturing is often
seen as a more refined version of earlier efficiency efforts, building upon the work of
earlier leaders such as Taylor or Ford, and learning from their mistakes.

Contents
[hide]

• 1 Overview
o 1.1 Origins
• 2 A brief history of waste reduction thinking
o 2.1 Pre-20th century
o 2.2 20th century
o 2.3 Ford starts the ball rolling
o 2.4 Toyota develops TPS
• 3 Types of waste
• 4 Lean implementation develops from TPS
o 4.1 An example program
o 4.2 Lean leadership
o 4.3 Differences from TPS
• 5 Lean services
• 6 Lean Goals and Strategy
• 7 Steps to achieve lean systems
o 7.1 Design a simple manufacturing system
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o 7.2 There is always room for improvement

o 7.3 Continuously improve
o 7.4 Measure
• 8 See also
o 8.1 Closely related methodologies
o 8.2 Predictive validation techniques
o 8.3 Terminology
o 8.4 Related engineering disciplines
o 8.5 Areas of implementation outside production
o 8.6 Other
• 9 References

• 10 External links

Overview
Lean principles come from the Japanese manufacturing industry. The term was first
coined by John Krafcik in a Fall 1988 article, "Triumph of the Lean Production System,"
published in the Sloan Management Review and based on his master's thesis at the MIT
Sloan School of Management.[4] Krafcik had been a quality engineer in the Toyota-GM
NUMMI joint venture in California before coming to MIT for MBA studies. Krafcik's
research was continued by the International Motor Vehicle Program (IMVP) at MIT,
which produced the international best-seller book co-authored by Jim Womack, Daniel
Jones, and Daniel Roos called The Machine That Changed the World.[1] A complete
historical account of the IMVP and how the term "lean" was coined is given by Holweg
(2007).[2]

For many, Lean is the set of "tools" that assist in the identification and steady elimination
of waste (muda). As waste is eliminated quality improves while production time and cost
are reduced. Examples of such "tools" are Value Stream Mapping, Five S, Kanban (pull
systems), and poka-yoke (error-proofing).

There is a second approach to Lean Manufacturing, which is promoted by Toyota, in

which the focus is upon improving the "flow" or smoothness of work, thereby steadily
eliminating mura ("unevenness") through the system and not upon 'waste reduction' per
se. Techniques to improve flow include production leveling, "pull" production (by means
of kanban) and the Heijunka box. This is a fundamentally different approach from most
improvement methodologies, which may partially account for its lack of popularity.

The difference between these two approaches is not the goal itself, but rather the prime
approach to achieving it. The implementation of smooth flow exposes quality problems
that already existed, and thus waste reduction naturally happens as a consequence. The
advantage claimed for this approach is that it naturally takes a system-wide perspective,
whereas a waste focus sometimes wrongly assumes this perspective.
 3

Both Lean and TPS can be seen as a loosely connected set of potentially competing
principles whose goal is cost reduction by the elimination of waste.[5] These principles
include: Pull processing, Perfect first-time quality, Waste minimization, Continuous
improvement, Flexibility, Building and maintaining a long term relationship with
suppliers, Autonomation, Load leveling and Production flow and Visual control. The
disconnected nature of some of these principles perhaps springs from the fact that the
TPS has grown pragmatically since 1948 as it responded to the problems it saw within its
own production facilities. Thus what one sees today is the result of a 'need' driven
learning to improve where each step has built on previous ideas and not something based
upon a theoretical framework.

Toyota's view is that the main method of Lean is not the tools, but the reduction of three
types of waste: muda ("non-value-adding work"), muri ("overburden"), and mura
("unevenness"), to expose problems systematically and to use the tools where the ideal
cannot be achieved. From this perspective, the tools are workarounds adapted to different
situations, which explains any apparent incoherence of the principles above.

Origins

Also known as the flexible mass production, the TPS has two pillar concepts: Just-in-time
(JIT) or "flow", and "autonomation" (smart automation).[6] Adherents of the Toyota
approach would say that the smooth flowing delivery of value achieves all the other
improvements as side-effects. If production flows perfectly then there is no inventory; if
customer valued features are the only ones produced, then product design is simplified
and effort is only expended on features the customer values. The other of the two TPS
pillars is the very human aspect of autonomation, whereby automation is achieved with a
human touch.[7] The "human touch" here meaning to automate so that the
machines/systems are designed to aid humans in focusing on what the humans do best.
This aims, for example, to give the machines enough intelligence to recognize when they
are working abnormally and flag this for human attention. Thus, in this case, humans
would not have to monitor normal production and only have to focus on abnormal, or
fault, conditions.

Lean implementation is therefore focused on getting the right things to the right place at
the right time in the right quantity to achieve perfect work flow, while minimizing waste
and being flexible and able to change. These concepts of flexibility and change are
principally required to allow production leveling, using tools like SMED, but have their
analogues in other processes such as research and development (R&D). The flexibility
and ability to change are within bounds and not open-ended, and therefore often not
expensive capability requirements. More importantly, all of these concepts have to be
understood, appreciated, and embraced by the actual employees who build the products
and therefore own the processes that deliver the value. The cultural and managerial
aspects of Lean are possibly more important than the actual tools or methodologies of
production itself. There are many examples of Lean tool implementation without
sustained benefit, and these are often blamed on weak understanding of Lean throughout
the whole organization.
 4

Lean aims to make the work simple enough to understand, do and manage. To achieve
these three goals at once there is a belief held by some that Toyota's mentoring process
(loosely called Senpai and Kohai), is one of the best ways to foster Lean Thinking up and
down the organizational structure. This is the process undertaken by Toyota as it helps its
suppliers improve their own production. The closest equivalent to Toyota's mentoring
process is the concept of "Lean Sensei," which encourages companies, organizations, and
teams to seek outside, third-party experts, who can provide unbiased advice and
coaching, (see Womack et al., Lean Thinking, 1998).

There have been recent attempts to link Lean to Service Management, perhaps one of the
most recent and spectacular of which was London Heathrow Airport's Terminal 5. This
particular case provides a graphic example of how care should be taken in translating
successful practices from one context (production) to another (services), expecting the
same results. In this case the public perception is more of a spectacular failure, than a
spectacular success, resulting in potentially an unfair tainting of the lean manufacturing
philosophies.[8]

A brief history of waste reduction thinking

The avoidance and then lateral removal of waste has a long history, and as such this
history forms much of the basis of the philosophy now known as "Lean". In fact many of
the concepts now seen as key to lean have been discovered and rediscovered over the
years by others in their search to reduce waste.

Pre-20th century

The printer Benjamin Franklin contributed greatly to waste reduction thinking

Most of the basic goals of lean manufacturing are common sense, and documented
examples can be seen as early as Benjamin Franklin. Poor Richard's Almanac says of
wasted time, "He that idly loses 5s. worth of time, loses 5s., and might as prudently throw
5s. into the river." He added that avoiding unnecessary costs could be more profitable
 5

than increasing sales: "A penny saved is two pence clear. A pin a-day is a groat a-year.
Save and have."

Again Franklin's The Way to Wealth says the following about carrying unnecessary
inventory. "You call them goods; but, if you do not take care, they will prove evils to
some of you. You expect they will be sold cheap, and, perhaps, they may [be bought] for
less than they cost; but, if you have no occasion for them, they must be dear to you.
Remember what Poor Richard says, 'Buy what thou hast no need of, and ere long thou
shalt sell thy necessaries.' In another place he says, 'Many have been ruined by buying
good penny worths'." Henry Ford cited Franklin as a major influence on his own business
practices, which included Just-in-time manufacturing.

The concept of waste being built into jobs and then taken for granted was noticed by
motion efficiency expert Frank Gilbreth, who saw that masons bent over to pick up bricks
from the ground. The bricklayer was therefore lowering and raising his entire upper body
to pick up a 2.3 kg (5 lb.) brick, and this inefficiency had been built into the job through
long practice. Introduction of a non-stooping scaffold, which delivered the bricks at waist
level, allowed masons to work about three times as quickly, and with less effort.

20th century

Frederick Winslow Taylor, the father of scientific management, introduced what are now
called standardization and best practice deployment. In his Principles of Scientific
Management, (1911), Taylor said: "And whenever a workman proposes an improvement,
it should be the policy of the management to make a careful analysis of the new method,
and if necessary conduct a series of experiments to determine accurately the relative
merit of the new suggestion and of the old standard. And whenever the new method is
found to be markedly superior to the old, it should be adopted as the standard for the
whole establishment."

Taylor also warned explicitly against cutting piece rates (or, by implication, cutting
wages or discharging workers) when efficiency improvements reduce the need for raw
labor: "…after a workman has had the price per piece of the work he is doing lowered
two or three times as a result of his having worked harder and increased his output, he is
likely entirely to lose sight of his employer's side of the case and become imbued with a
grim determination to have no more cuts if soldiering [marking time, just doing what he
is told] can prevent it."

Shigeo Shingo, the best-known exponent of single minute exchange of die (SMED) and
error-proofing or poka-yoke, cites Principles of Scientific Management as his inspiration.
[9]

American industrialists recognized the threat of cheap offshore labor to American

workers during the 1910s, and explicitly stated the goal of what is now called lean
manufacturing as a countermeasure. Henry Towne, past President of the American
Society of Mechanical Engineers, wrote in the Foreword to Frederick Winslow Taylor's
 6

Shop Management (1911), "We are justly proud of the high wage rates which prevail
throughout our country, and jealous of any interference with them by the products of the
cheaper labor of other countries. To maintain this condition, to strengthen our control of
home markets, and, above all, to broaden our opportunities in foreign markets where we
must compete with the products of other industrial nations, we should welcome and
encourage every influence tending to increase the efficiency of our productive
processes."

Ford starts the ball rolling

Henry Ford continued this focus on waste while developing his mass assembly
manufacturing system. Charles Buxton Going wrote in 1915:

Ford's success has startled the country, almost the world, financially, industrially,
mechanically. It exhibits in higher degree than most persons would have thought
possible the seemingly contradictory requirements of true efficiency, which are:
constant increase of quality, great increase of pay to the workers, repeated
reduction in cost to the consumer. And with these appears, as at once cause and
effect, an absolutely incredible enlargement of output reaching something like one
hundredfold in less than ten years, and an enormous profit to the manufacturer.[10]

Ford, in My Life and Work (1922),[11] provided a single-paragraph description that

encompasses the entire concept of waste:

I believe that the average farmer puts to a really useful purpose only about 5%. of
the energy he expends.... Not only is everything done by hand, but seldom is a
thought given to a logical arrangement. A farmer doing his chores will walk up
and down a rickety ladder a dozen times. He will carry water for years instead of
putting in a few lengths of pipe. His whole idea, when there is extra work to do, is
to hire extra men. He thinks of putting money into improvements as an expense....
It is waste motion— waste effort— that makes farm prices high and profits low.

Poor arrangement of the workplace—a major focus of the modern kaizen—and doing a
job inefficiently out of habit—are major forms of waste even in modern workplaces.

Ford also pointed out how easy it was to overlook material waste. A former employee,
Harry Bennett, wrote:

One day when Mr. Ford and I were together he spotted some rust in the slag that
ballasted the right of way of the D. T. & I [railroad]. This slag had been dumped
there from our own furnaces. 'You know,' Mr. Ford said to me, 'there's iron in that
slag. You make the crane crews who put it out there sort it over, and take it back
to the plant.'[12]

In other words, Ford saw the rust and realized that the steel plant was not recovering all
of the iron.
 7

Ford's early success, however, was not sustainable. As James Womack and Daniel Jones
pointed out in "Lean Thinking", what Ford accomplished represented the "special case"
rather than a robust lean solution.[13] The major challenge that Ford faced was that his
methods were built for a steady-state environment, rather than for the dynamic conditions
firms increasingly face today.[14] Although his rigid, top-down controls made it possible
to hold variation in work activities down to very low levels, his approach did not respond
well to uncertain, dynamic business conditions; they responded particularly badly to the
need for new product innovation. This was made clear by Ford's precipitous decline when
the company was forced to finally introduce a follow-on to the Model T (see Lean
Dynamics).

Design for Manufacture (DFM) also is a Ford concept. Ford said in My Life and Work
(the same reference describes just in time manufacturing very explicitly):

...entirely useless parts [may be]—a shoe, a dress, a house, a piece of machinery,
a railroad, a steamship, an airplane. As we cut out useless parts and simplify
necessary ones, we also cut down the cost of making. ... But also it is to be
remembered that all the parts are designed so that they can be most easily made.

This standardization of parts was central to Ford's concept of mass production, and the
manufacturing "tolerances", or upper and lower dimensional limits that ensured
interchangeability of parts became widely applied across manufacturing. Decades later,
the renowned Japanese quality guru, Genichi Taguchi, demonstrated that this "goal post"
method of measuring was inadequate. He showed that "loss" in capabilities did not begin
only after exceeding these tolerances, but increased as described by the Taguchi Loss
Function at any condition exceeding the nominal condition. This became an important
part of W. Edwards Deming's quality movement of the 1980s, later helping to develop
improved understanding of key areas of focus such as cycle time variation in improving
manufacturing quality and efficiencies in aerospace and other industries.

While Ford is renowned for his production line it is often not recognized how much effort
he put into removing the fitters' work to make the production line possible. Until Ford, a
car's components always had to be fitted or reshaped by a skilled engineer at the point of
use, so that they would connect properly. By enforcing very strict specification and
quality criteria on component manufacture, he eliminated this work almost entirely,
reducing manufacturing effort by between 60-90%.[15] However, Ford's mass production
system failed to incorporate the notion of "pull production" and thus often suffered from
over-production.

Toyota develops TPS

Toyota's development of ideas that later became Lean may have started at the turn of the
20th century with Sakichi Toyoda, in a textile factory with looms that stopped themselves
when a thread broke, this became the seed of autonomation and Jidoka. Toyota's journey
with JIT may have started back in 1934 when it moved from textiles to produce its first
car. Kiichiro Toyoda, founder of Toyota, directed the engine casting work and discovered
 8

many problems in their manufacture. He decided he must stop the repairing of poor
quality by intense study of each stage of the process. In 1936, when Toyota won its first
truck contract with the Japanese government, his processes hit new problems and he
developed the "Kaizen" improvement teams.

Levels of demand in the Post War economy of Japan were low and the focus of mass
production on lowest cost per item via economies of scale therefore had little application.
Having visited and seen supermarkets in the USA, Taiichi Ohno recognised the
scheduling of work should not be driven by sales or production targets but by actual
sales. Given the financial situation during this period, over-production had to be avoided
and thus the notion of Pull (build to order rather than target driven Push) came to
underpin production scheduling.

It was with Taiichi Ohno at Toyota that these themes came together. He built on the
already existing internal schools of thought and spread their breadth and use into what
has now become the Toyota Production System (TPS). It is principally from the TPS, but
now including many other sources, that Lean production is developing. Norman Bodek
wrote the following in his foreword to a reprint of Ford's Today and Tomorrow:

I was first introduced to the concepts of just-in-time (JIT) and the Toyota
production system in 1980. Subsequently I had the opportunity to witness its
actual application at Toyota on one of our numerous Japanese study missions.
There I met Mr. Taiichi Ohno, the system's creator. When bombarded with
questions from our group on what inspired his thinking, he just laughed and said
he learned it all from Henry Ford's book." The scale, rigor and continuous
learning aspects of TPS have made it a core concept of Lean.

Types of waste
While the elimination of waste may seem like a simple and clear subject it is noticeable
that waste is often very conservatively identified. This then hugely reduces the potential
of such an aim. The elimination of waste is the goal of Lean, and Toyota defined three
broad types of waste: muda, muri and mura; it should be noted that for many Lean
implementations this list shrinks to the first waste type only with corresponding benefits
decrease. To illustrate the state of this thinking Shigeo Shingo observed that only the last
turn of a bolt tightens it—the rest is just movement. This ever finer clarification of waste
is key to establishing distinctions between value-adding activity, waste and non-value-
adding work.[16] Non-value adding work is waste that must be done under the present
work conditions. One key is to measure, or estimate, the size of these wastes, to
demonstrate the effect of the changes achieved and therefore the movement toward the
goal.

The "flow" (or smoothness) based approach aims to achieve JIT, by removing the
variation caused by work scheduling and thereby provide a driver, rationale or target and
priorities for implementation, using a variety of techniques. The effort to achieve JIT
exposes many quality problems that are hidden by buffer stocks; by forcing smooth flow
 9

of only value-adding steps, these problems become visible and must be dealt with
explicitly.

Muri is all the unreasonable work that management imposes on workers and machines
because of poor organization, such as carrying heavy weights, moving things around,
dangerous tasks, even working significantly faster than usual. It is pushing a person or a
machine beyond its natural limits. This may simply be asking a greater level of
performance from a process than it can handle without taking shortcuts and informally
modifying decision criteria. Unreasonable work is almost always a cause of multiple
variations.

To link these three concepts is simple in TPS and thus Lean. Firstly, muri focuses on the
preparation and planning of the process, or what work can be avoided proactively by
design. Next, mura then focuses on how the work design is implemented and the
elimination of fluctuation at the scheduling or operations level, such as quality and
volume. Muda is then discovered after the process is in place and is dealt with reactively.
It is seen through variation in output. It is the role of management to examine the muda,
in the processes and eliminate the deeper causes by considering the connections to the
muri and mura of the system. The muda and mura inconsistencies must be fed back to the
muri, or planning, stage for the next project.

A typical example of the interplay of these wastes is the corporate behaviour of "making
the numbers" as the end of a reporting period approaches. Demand is raised to 'make
plan,' increasing (mura), when the "numbers" are low, which causes production to try to
squeeze extra capacity from the process, which causes routines and standards to be
modified or stretched. This stretch and improvisation leads to muri-style waste, which
leads to downtime, mistakes and back flows, and waiting, thus the muda of waiting,
correction and movement.

The original seven muda are:

• Transportation (moving products that is not actually required to perform the

processing)
• Inventory (all components, work in process and finished product not being
processed)
• Motion (people or equipment moving or walking more than is required to perform
the processing)
• Waiting (waiting for the next production step)
• Overproduction (production ahead of demand)
• Over Processing (resulting from poor tool or product design creating activity)
• Defects (the effort involved in inspecting for and fixing defects)[17]

Later an eighth waste was defined by Womack et al. (2003); it was described as
manufacturing goods or services that do not meet customer demand or specifications.
Many others have added the "waste of unused human talent" to the original seven wastes.
These wastes were not originally a part of the seven deadly wastes defined by Taiichi
 10

Ohno in TPS, but were found to be useful additions in practice. For a complete listing of
the "old" and "new" wastes see Bicheno and Holweg (2009)[18]

Some of these definitions may seem rather idealistic, but this tough definition is seen as
important and they drove the success of TPS. The clear identification of non-value-
adding work, as distinct from wasted work, is critical to identifying the assumptions
behind the current work process and to challenging them in due course.[19] Breakthroughs
in SMED and other process changing techniques rely upon clear identification of where
untapped opportunities may lie if the processing assumptions are challenged.

Lean implementation develops from TPS

The discipline required to implement Lean and the disciplines it seems to require are so
often counter-cultural that they have made successful implementation of Lean a major
challenge. Some[20] would say that it was a major challenge in its manufacturing
'heartland' as well. Implementations under the Lean label are numerous and whether they
are Lean and whether any success or failure can be laid at Lean's door is often debatable.
Individual examples of success and failure exist in almost all spheres of business and
activity and therefore cannot be taken as indications of whether Lean is particularly
applicable to a specific sector of activity. It seems clear from the "successes" that no
sector is immune from beneficial possibility.[citation needed]

Lean is about more than just cutting costs in the factory.[21] One crucial insight is that
most costs are assigned when a product is designed, (see Genichi Taguchi). Often an
engineer will specify familiar, safe materials and processes rather than inexpensive,
efficient ones. This reduces project risk, that is, the cost to the engineer, while increasing
financial risks, and decreasing profits. Good organizations develop and review checklists
to review product designs.

Companies must often look beyond the shop-floor to find opportunities for improving
overall company cost and performance. At the system engineering level, requirements are
reviewed with marketing and customer representatives to eliminate those requirements
that are costly. Shared modules may be developed, such as multipurpose power supplies
or shared mechanical components or fasteners. Requirements are assigned to the cheapest
discipline. For example, adjustments may be moved into software, and measurements
away from a mechanical solution to an electronic solution. Another approach is to choose
connection or power-transport methods that are cheap or that used standardized
components that become available in a competitive market.

An example program

In summary, an example of a lean implementation program could be:

With a tools-based approach With a muri or flow based approach (as used
in the TPS with suppliers[22]).
 11

• Senior management to
agree and discuss their lean
vision
• Management
• Sort out as many of
brainstorm to identify project
the visible quality problems
leader and set objectives
as you can, as well as
• Communicate plan and
downtime and other
vision to the workforce
instability problems, and get
• Ask for volunteers to
the internal scrap
form the Lean Implementation
acknowledged and its
team (5-7 works best, all from
management started.
different departments)
• Make the flow of
• Appoint members of
parts through the system or
the Lean Manufacturing
process as continuous as
Implementation Team
possible using workcells and
• Train the
market locations where
Implementation Team in the
necessary and avoiding
various lean tools - make a
variations in the operators
point of trying to visit other
work cycle
non competing businesses that
• Introduce standard
have implemented lean
work and stabilise the work
• Select a Pilot Project to
pace through the system
implement – 5S is a good
• Start pulling work
place to start
through the system, look at
• Run the pilot for 2–3
the production scheduling and
months - evaluate, review and
move toward daily orders
learn from your mistakes
with kanban cards
• Roll out pilot to other
• Even out the
factory areas
production flow by reducing
• Evaluate results,
batch sizes, increase delivery
encourage feedback
frequency internally and if
• Stabilize the positive
possible externally, level
results by teaching supervisors
internal demand
how to train the new standards
• Improve exposed
you've developed with TWI
quality issues using the tools
methodology (Training Within
Industry)
• Remove some people
(or increase quotas) and go
• Once you are satisfied
through this work again (the
that you have a habitual
Oh No !! moment)
program, consider introducing
the next lean tool. Select the
one that gives you the biggest
return for your business.
 12

Lean leadership

The role of the leaders within the organization is the fundamental element of sustaining
the progress of lean thinking. Experienced kaizen members at Toyota, for example, often
bring up the concepts of Senpai, Kohai, and Sensei, because they strongly feel that
transferring of Toyota culture down and across Toyota can only happen when more
experienced Toyota Sensei continuously coach and guide the less experienced lean
champions. Unfortunately, most lean practitioners in North America focus on the tools
and methodologies of lean, versus the philosophy and culture of lean. Some exceptions
include Shingijitsu Consulting out of Japan, which is made up of ex-Toyota managers,
and Lean Sensei International based in North America, which coaches lean through
Toyota-style cultural experience.

One of the dislocative effects of Lean is in the area of key performance indicators (KPI).
The KPIs by which a plant/facility are judged will often be driving behaviour, because
the KPIs themselves assume a particular approach to the work being done. This can be an
issue where, for example a truly Lean, Fixed Repeating Schedule (FRS) and JIT approach
is adopted, because these KPIs will no longer reflect performance, as the assumptions on
which they are based become invalid. It is a key leadership challenge to manage the
impact of this KPI chaos within the organization.

Similarly, commonly used accounting systems developed to support mass production are
no longer appropriate for companies pursuing Lean. Lean Accounting provides truly
Lean approaches to business management and financial reporting.

After formulating the guiding principles of its lean manufacturing approach in the Toyota
Production System (TPS) Toyota formalized in 2001 the basis of its lean management:
the key managerial values and attitudes needed to sustain continuous improvement in the
long run. These core management principles are articulated around the twin pillars of
Continuous Improvement (relentless elimination of waste) and Respect for People
(engagement in long term relationships based on continuous improvement and mutual
trust).

This formalization stems from problem solving. As Toyota expanded beyond its home
base for the past 20 years, it hit the same problems in getting TPS properly applied that
other western companies have had in copying TPS. Like any other problem, it has been
working on trying a series of countermeasures to solve this particular concern. These
countermeasures have focused on culture: how people behave, which is the most difficult
challenge of all. Without the proper behavioral principles and values, TPS can be totally
misapplied and fail to deliver results. As one sensei said, one can create a Buddha image
and forget to inject soul in it. As with TPS, the values had originally been passed down in
a master-disciple manner, from boss to subordinate, without any written statement on the
way. And just as with TPS, it was internally argued that formalizing the values would
stifle them and lead to further misunderstanding. But as Toyota veterans eventually wrote
down the basic principles of TPS, Toyota set to put the Toyota Way into writing to
educate new joiners.[23]
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Continuous Improvement breaks down into three basic principles:

1. Challenge : Having a long term vision of the challenges one needs to face to
realize one's ambition (what we need to learn rather than what we want to do and
then having the spirit to face that challenge). To do so, we have to challenge
ourselves every day to see if we are achieving our goals.
2. Kaizen : Good enough never is, no process can ever be thought perfect, so
operations must be improved continuously, striving for innovation and evolution.
3. Genchi Genbutsu : Going to the source to see the facts for oneself and make the
right decisions, create consensus, and make sure goals are attained at the best
possible speed.

Respect For People is less known outside of Toyota, and essentially involves two
defining principles:

1. Respect Taking every stakeholders' problems seriously, and making every effort
to build mutual trust. Taking responsibility for other people reaching their
objectives. Thought provoking, I find. As a manager, I must take responsibility
for my subordinates reaching the target I set for them.
2. Teamwork : This is about developing individuals through team problem-solving.
The idea is to develop and engage people through their contribution to team
performance. Shop floor teams, the whole site as team, and team Toyota at the
outset.

Differences from TPS

Whilst Lean is seen by many as a generalization of the Toyota Production System into
other industries and contexts there are some acknowledged differences that seem to have
developed in implementation.

1. Seeking profit is a relentless focus for Toyota exemplified by the profit

maximization principle (Price – Cost = Profit) and the need, therefore, to practice
systematic cost reduction (through TPS or otherwise) to realize benefit. Lean
implementations can tend to de-emphasise this key measure and thus become
fixated with the implementation of improvement concepts of “flow” or “pull”.
However, the emergence of the "value curve analysis" promises to directly tie
lean improvements to bottom-line performance measuments.20
2. Tool orientation is a tendency in many programs to elevate mere tools
(standardized work, value stream mapping, visual control, etc.) to an unhealthy
status beyond their pragmatic intent. The tools are just different ways to work
around certain types of problems but they do not solve them for you or always
highlight the underlying cause of many types of problems. The tools employed at
Toyota are often used to expose particular problems that are then dealt with, as
each tool's limitations or blindspots are perhaps better understood. So, for
example, Value Stream Mapping focuses upon material and information flow
problems (a title built into the Toyota title for this activity) but is not strong on
 14

Metrics, Man or Method. Internally they well know the limits of the tool and
understood that it was never intended as the best way to see and analyze every
waste or every problem related to quality, downtime, personnel development,
cross training related issues, capacity bottlenecks, or anything to do with profits,
safety, metrics or morale, etc. No one tool can do all of that. For surfacing these
issues other tools are much more widely and effectively used.
3. Management technique rather than change agents has been a principle in
Toyota from the early 1950s when they started emphasizing the development of
the production manager's and supervisors' skills set in guiding natural work teams
and did not rely upon staff-level change agents to drive improvements. This can
manifest itself as a "Push" implementation of Lean rather than "Pull" by the team
itself. This area of skills development is not that of the change agent specialist,
but that of the natural operations work team leader. Although less prestigious than
the TPS specialists, development of work team supervisors in Toyota is
considered an equally, if not more important, topic merely because there are tens
of thousands of these individuals. Specifically, it is these manufacturing leaders
that are the main focus of training efforts in Toyota since they lead the daily work
areas, and they directly and dramatically affect quality, cost, productivity, safety,
and morale of the team environment. In many companies implementing Lean the
reverse set of priorities is true. Emphasis is put on developing the specialist, while
the supervisor skill level is expected to somehow develop over time on its own.

Lean services
Lean, as a concept or brand, has captured the imagination of many in different spheres of
activity. Examples of these from many sectors are listed below.

Lean principles have been successfully applied to call center services to improve live
agent call handling. By combining Agent-assisted Voice solutions and Lean's waste
reduction practices, a company reduced handle time, reduced between agent variability,
reduced accent barriers, and attained near perfect process adherence. [24]

Lean principles have also found application in software application development and
maintenance and other areas of information technology (IT).[25] More generally, the use of
Lean in IT has become known as Lean IT.

A study conducted on behalf of the Scottish Executive, by Warwick University, in

2005/06 found that Lean methods were applicable to the public sector, but that most
results had been achieved using a much more restricted range of techniques than Lean
provides.[26]

The challenge in moving Lean to services is the lack of widely available reference
implementations to allow people to see how directly applying lean manufacturing tools
and practices can work and the impact it does have. This makes it more difficult to build
the level of belief seen as necessary for strong implementation. However, some research
does relate widely recognized examples of success in retail and even airlines to the
 15

underlying principles of lean.[14] Despite this, it remains the case that the direct
manufacturing examples of 'techniques' or 'tools' need to be better 'translated' into a
service context to support the more prominent approaches of implementation, which has
not yet received the level of work or publicity that would give starting points for
implementors. The upshot of this is that each implementation often 'feels its way' along as
must the early industrial engineers of Toyota. This places huge importance upon
sponsorship to encourage and protect these experimental developments.

Lean Goals and Strategy

The espoused goals of Lean manufacturing systems differ between various authors.
While some maintain an internal focus, e.g. to increase profit for the organization[27] ,
others claim that improvements should be done for the sake of the customer [28]

Some commonly mentioned goals are:

• Improve quality: To stay competitive in today’s marketplace, a company must

understand its customers' wants and needs and design processes to meet their
expectations and requirements.

• Eliminate waste: Waste is any activity that consumes time, resources, or space but
does not add any value to the product or service. See Types of waste, above.

Taking the first letter of each waste, the acronym "TIM WOOD" is formed. This is a
common way to remember the wastes.

• Reduce time: Reducing the time it takes to finish an activity from start to finish is
one of the most effective ways to eliminate waste and lower costs.

• Reduce total costs: To minimize cost, a company must produce only to customer
demand. Overproduction increases a company’s inventory costs because of
storage needs.

The strategic elements of Lean can be quite complex, and comprise multiple elements.
Four different notions of Lean have been identified [29]:

1. Lean as a fixed state or goal (Being Lean)

2. Lean as a continuous change process (Becoming Lean)
3. Lean as a set of tools or methods (Doing Lean/Toolbox Lean)
4. Lean as a philosophy (Lean thinking)

Steps to achieve lean systems

The following steps should be implemented to create the ideal lean manufacturing
system: [2]:
 16

1. Design a simple manufacturing system

2. Recognize that there is always room for improvement
3. Continuously improve the lean manufacturing system design

Design a simple manufacturing system

A fundamental principle of lean manufacturing is demand-based flow manufacturing. In

this type of production setting, inventory is only pulled through each production center
when it is needed to meet a customer’s order. The benefits of this goal include: [3]:

• decreased cycle time

• less inventory
• increased productivity
• increased capital equipment utilization

There is always room for improvement

The core of lean is founded on the concept of continuous product and process
improvement and the elimination of non-value added activities. “The Value adding
activities are simply only those things the customer is willing to pay for, everything else
is waste, and should be eliminated, simplified, reduced, or integrated”(Rizzardo, 2003).
Improving the flow of material through new ideal system layouts at the customer's
required rate would reduce waste in material movement and inventory. [4]

Continuously improve

A continuous improvement mindset is essential to reach a company's goals. The term

"continuous improvement" means incremental improvement of products, processes, or
services over time, with the goal of reducing waste to improve workplace functionality,
customer service, or product performance (Suzaki, 1987).

Stephen Shortell (Professor of Health Services Management and Organisational

Behaviour – Berkeley University, California) states:-

“For improvement to flourish it must be carefully cultivated in a rich soil bed (a receptive
organisation), given constant attention (sustained leadership), assured the right amounts
of light (training and support) and water (measurement and data) and protected from
damaging."

Measure

Overall equipment effectiveness (OEE) is a set of performance metrics that fit well in a
Lean environment.

See also

Closely related methodologies
• Toyota Production System
• Lean accounting
• Value Network
• Demand Flow Technology
• Theory of Constraints
• Variation Management
• SCOR
• Six Sigma
• Business process management
• Statistical process control
• Lean Dynamics
Predictive validation techniques
• Discrete event simulation
Terminology
• Training Within Industry
• Lean accounting
• Just In Time or JIT
• Fixed Repeating Schedule or FRS
• Kaizen
• SMED
• Poka-Yoke
• Autonomation and Jidoka
• 5S
• Production levelling
• Cycle Time Variation
• muda, mura, muri
• workcell
• Takt time
• Andon
• Genchi Genbutsu
• Gemba
• 5 Whys
17
[edit] Related engineering disciplines
• Industrial engineering
• Industrial technology
Areas of implementation outside
production
• Computer-Aided Lean Management
• Lean construction
• Lean consumption
• Lean Integration
• Lean laboratory
• Lean Services
• Lean IT
• Lean software development
• Lean accounting
• Lean Government
• Lean Office
• Lean Maintenance Repair and
Overhaul (MRO)
• Lean logistics
Other
• Overall Equipment Effectiveness
• Cellular manufacturing
• Agile manufacturing
• Manufacturing
• Preorder Economy
• Process Reengineering
• Training Within Industry
• Value Stream Mapping
• 3D's Dirty, Dangerous and Difficult
• Systems thinking
• Oscillatory baffled reactor
• Lean accounting
• Value curve analysis
• Inventory management software
 18

Statistical process control

Statistical process control (SPC) is the application of statistical methods to the
monitoring and control of a process to ensure that it operates at its full potential to
produce conforming product. Under SPC, a process behaves predictably to produce as
much conforming product as possible with the least possible waste. While SPC has been
applied most frequently to controlling manufacturing lines, it applies equally well to any
process with a measurable output. Key tools in SPC are control charts, a focus on
continuous improvement and designed experiments.

Much of the power of SPC lies in the ability to examine a process and the sources of
variation in that process using tools that give weight to objective analysis over subjective
opinions and that allow the strength of each source to be determined numerically.
Variations in the process that may affect the quality of the end product or service can be
detected and corrected, thus reducing waste as well as the likelihood that problems will
be passed on to the customer. With its emphasis on early detection and prevention of
problems, SPC has a distinct advantage over other quality methods, such as inspection,
that apply resources to detecting and correcting problems after they have occurred.

In addition to reducing waste, SPC can lead to a reduction in the time required to produce
the product or service from end to end. This is partially due to a diminished likelihood
that the final product will have to be reworked, but it may also result from using SPC data
to identify bottlenecks, wait times, and other sources of delays within the process.
Process cycle time reductions coupled with improvements in yield have made SPC a
valuable tool from both a cost reduction and a customer satisfaction standpoint.

Contents
[hide]

• 1 History
• 2 General
• 3 How to Use SPC
• 4 See also
• 5 References
• 6 Bibliography

• 7 External links

History
Statistical process control was pioneered by Walter A. Shewhart in the early 1920s. W.
Edwards Deming later applied SPC methods in the United States during World War II,
thereby successfully improving quality in the manufacture of munitions and other
 19

strategically important products. Deming was also instrumental in introducing SPC

methods to Japanese industry after the war had ended.[1][2]

Shewhart created the basis for the control chart and the concept of a state of statistical
control by carefully designed experiments. While Dr. Shewhart drew from pure
mathematical statistical theories, he understood that data from physical processes seldom
produces a "normal distribution curve" (a Gaussian distribution, also commonly referred
to as a "bell curve"). He discovered that observed variation in manufacturing data did not
always behave the same way as data in nature (for example, Brownian motion of
particles). Dr. Shewhart concluded that while every process displays variation, some
processes display controlled variation that is natural to the process (common causes of
variation), while others display uncontrolled variation that is not present in the process
causal system at all times (special causes of variation).[3]

In 1989, the Software Engineering Institute introduced the notion that SPC can be
usefully applied to non-manufacturing processes, such as software engineering processes,
in the Capability Maturity Model (CMM). This idea exists today within the Level 4 and
Level 5 practices of the Capability Maturity Model Integration (CMMI). This notion that
SPC is a useful tool when applied to non-repetitive, knowledge-intensive processes such
as engineering processes has encountered much skepticism, and remains controversial
today.[4][5][6]

General
The following description relates to manufacturing rather than to the service industry,
although the principles of SPC can be successfully applied to either. For a description and
example of how SPC applies to a service environment, refer to Roberts (2005).[7] SPC has
also been successfully applied to detecting changes in organizational behavior with
Social Network Change Detection introduced by McCulloh (2007). Selden describes how
to use SPC in the fields of sales, marketing, and customer service, using Deming's
famous Red Bead Experiment as an easy to follow demonstration[8].

In mass-manufacturing, the quality of the finished article was traditionally achieved

through post-manufacturing inspection of the product; accepting or rejecting each article
(or samples from a production lot) based on how well it met its design specifications. In
contrast, Statistical Process Control uses statistical tools to observe the performance of
the production process in order to predict significant deviations that may later result in
rejected product.

Two kinds of variation occur in all manufacturing processes: both these types of process
variation cause subsequent variation in the final product. The first is known as natural or
common cause variation and consists of the variation inherent in the process as it is
designed. Common cause variation may include variations in temperature, properties of
raw materials, strength of an electrical current etc. The second kind of variation is known
as special cause variation, or assignable-cause variation, and happens less frequently than
 20

the first. With sufficient investigation, a specific cause, such as abnormal raw material or
incorrect set-up parameters, can be found for special cause variations.

For example, a breakfast cereal packaging line may be designed to fill each cereal box
with 500 grams of product, but some boxes will have slightly more than 500 grams, and
some will have slightly less, in accordance with a distribution of net weights. If the
production process, its inputs, or its environment changes (for example, the machines
doing the manufacture begin to wear) this distribution can change. For example, as its
cams and pulleys wear out, the cereal filling machine may start putting more cereal into
each box than specified. If this change is allowed to continue unchecked, more and more
product will be produced that fall outside the tolerances of the manufacturer or consumer,
resulting in waste. While in this case, the waste is in the form of "free" product for the
consumer, typically waste consists of rework or scrap.

By observing at the right time what happened in the process that led to a change, the
quality engineer or any member of the team responsible for the production line can
troubleshoot the root cause of the variation that has crept in to the process and correct the
problem.

SPC indicates when an action should be taken in a process, but it also indicates when NO
action should be taken. An example is a person who would like to maintain a constant
body weight and takes weight measurements weekly. A person who does not understand
SPC concepts might start dieting every time his or her weight increased, or eat more
every time his or her weight decreased. This type of action could be harmful and possibly
generate even more variation in body weight. SPC would account for normal weight
variation and better indicate when the person is in fact gaining or losing weight.

How to Use SPC

Statistical Process Control may be broadly broken down into three sets of activities:
understanding the process; understanding the causes of variation; and elimination of the
sources of special cause variation.

In understanding a process, the process is typically mapped out and the process is
monitored using control charts. Control charts are used to identify variation that may be
due to special causes, and to free the user from concern over variation due to common
causes. This is a continuous, ongoing activity. When a process is stable and does not
trigger any of the detection rules for a control chart, a process capability analysis may
also be performed to predict the ability of the current process to produce conforming (i.e.
within specification) product in the future.

When excessive variation is identified by the control chart detection rules, or the process
capability is found lacking, additional effort is exerted to determine causes of that
variance. The tools used include Ishikawa diagrams, designed experiments and Pareto
charts. Designed experiments are critical to this phase of SPC, as they are the only means
 21

of objectively quantifying the relative importance of the many potential causes of

variation.

Once the causes of variation have been quantified, effort is spent in eliminating those
causes that are both statistically and practically significant (i.e. a cause that has only a
small but statistically significant effect may not be considered cost-effective to fix;
however, a cause that is not statistically significant can never be considered practically
significant). Generally, this includes development of standard work, error-proofing and
training. Additional process changes may be required to reduce variation or align the
process with the desired target, especially if there is a problem with process capability.

Six Sigma
Not to be confused with Sigma 6.

The often-used six sigma symbol.

Part of a series of articles on

Industry

Manufacturing methods

Batch production • Job production

Continuous production
Improvement methods

LM • TPM • QRM • VDM

TOC • Six Sigma • RCM

Information & communication
 22

ISA-88 • ISA-95 • ERP

SAP • IEC 62264 • B2MML

Process control

PLC • DCS

Six Sigma is a business management strategy originally developed by Motorola, USA in

1981.[1] As of 2010, it enjoys widespread application in many sectors of industry,
although its application is not without controversy.

Six Sigma seeks to improve the quality of process outputs by identifying and removing
the causes of defects (errors) and minimizing variability in manufacturing and business
processes.[2] It uses a set of quality management methods, including statistical methods,
and creates a special infrastructure of people within the organization ("Black Belts",
"Green Belts", etc.) who are experts in these methods.[2] Each Six Sigma project carried
out within an organization follows a defined sequence of steps and has quantified
financial targets (cost reduction or profit increase).[2]

The term six sigma originated from terminology associated with manufacturing,
specifically terms associated with statistical modelling of manufacturing processes. The
maturity of a manufacturing process can be described by a sigma rating indicating its
yield, or the percentage of defect-free products it creates. A six-sigma process is one in
which 99.99966% of the products manufactured are statistically expected to be free of
defects (3.4 defects per million). Motorola set a goal of "six sigmas" for all of its
manufacturing operations, and this goal became a byword for the management and
engineering practices used to achieve it.

Contents
• 1 Historical overview
• 2 Methods
o 2.1 DMAIC
o 2.2 DMADV
o 2.3 Quality management tools and methods used in Six Sigma
• 3 Implementation roles
o 3.1 Certification
• 4 Origin and meaning of the term "six sigma process"
o 4.1 Role of the 1.5 sigma shift
o 4.2 Sigma levels
• 5 Software used for Six Sigma
• 6 List of Six Sigma companies
• 7 Criticism
o 7.1 Lack of originality
o 7.2 Role of consultants
o 7.3 Potential negative effects
 23

o 7.4 Based on arbitrary standards

o 7.5 Criticism of the 1.5 sigma shift
• 8 See also
• 9 References

• 10 Further reading

Historical overview
Six Sigma originated as a set of practices designed to improve manufacturing processes
and eliminate defects, but its application was subsequently extended to other types of
business processes as well.[3] In Six Sigma, a defect is defined as any process output that
does not meet customer specifications, or that could lead to creating an output that does
not meet customer specifications.[2]

Bill Smith first formulated the particulars of the methodology at Motorola in 1986.[4] Six
Sigma was heavily inspired by six preceding decades of quality improvement
methodologies such as quality control, TQM, and Zero Defects,[5][6] based on the work of
pioneers such as Shewhart, Deming, Juran, Ishikawa, Taguchi and others.

Like its predecessors, Six Sigma doctrine asserts that:

• Continuous efforts to achieve stable and predictable process results (i.e., reduce
process variation) are of vital importance to business success.
• Manufacturing and business processes have characteristics that can be measured,
analyzed, improved and controlled.
• Achieving sustained quality improvement requires commitment from the entire
organization, particularly from top-level management.

Features that set Six Sigma apart from previous quality improvement initiatives include:

• A clear focus on achieving measurable and quantifiable financial returns from any
Six Sigma project.[2]
• An increased emphasis on strong and passionate management leadership and
support.[2]
• A special infrastructure of "Champions," "Master Black Belts," "Black Belts,"
"Green Belts", etc. to lead and implement the Six Sigma approach.[2]
• A clear commitment to making decisions on the basis of verifiable data, rather
than assumptions and guesswork.[2]

The term "Six Sigma" comes from a field of statistics known as process capability
studies. Originally, it referred to the ability of manufacturing processes to produce a very
high proportion of output within specification. Processes that operate with "six sigma
quality" over the short term are assumed to produce long-term defect levels below 3.4
defects per million opportunities (DPMO).[7][8] Six Sigma's implicit goal is to improve all
processes to that level of quality or better.
 24

Six Sigma is a registered service mark and trademark of Motorola Inc.[9] As of 2006
Motorola reported over US$17 billion in savings[10] from Six Sigma.

Other early adopters of Six Sigma who achieved well-publicized success include
Honeywell (previously known as AlliedSignal) and General Electric, where Jack Welch
introduced the method.[11] By the late 1990s, about two-thirds of the Fortune 500
organizations had begun Six Sigma initiatives with the aim of reducing costs and
improving quality.[12]

In recent years, some practitioners have combined Six Sigma ideas with lean
manufacturing to yield a methodology named Lean Six Sigma.

Methods
Six Sigma projects follow two project methodologies inspired by Deming's Plan-Do-
Check-Act Cycle. These methodologies, composed of five phases each, bear the
acronyms DMAIC and DMADV.[12]

• DMAIC is used for projects aimed at improving an existing business process.[12]

DMAIC is pronounced as "duh-may-ick".
• DMADV is used for projects aimed at creating new product or process designs.[12]
DMADV is pronounced as "duh-mad-vee".

DMAIC

The DMAIC project methodology has five phases:

• Define the problem, the voice of the customer, and the project goals, specifically.
• Measure key aspects of the current process and collect relevant data.
• Analyze the data to investigate and verify cause-and-effect relationships.
Determine what the relationships are, and attempt to ensure that all factors have
been considered. Seek out root cause of the defect under investigation.
• Improve or optimize the current process based upon data analysis using
techniques such as design of experiments, poka yoke or mistake proofing, and
standard work to create a new, future state process. Set up pilot runs to establish
process capability.
• Control the future state process to ensure that any deviations from target are
corrected before they result in defects. Implement control systems such as
statistical process control, production boards, and visual workplaces, and
continuously monitor the process.

DMADV

The DMADV project methodology, also known as DFSS ("Design For Six Sigma"),[12]
features five phases:
 25

• Define design goals that are consistent with customer demands and the enterprise
strategy.
• Measure and identify CTQs (characteristics that are Critical To Quality), product
capabilities, production process capability, and risks.
• Analyze to develop and design alternatives, create a high-level design and
evaluate design capability to select the best design.
• Design details, optimize the design, and plan for design verification. This phase
may require simulations.
• Verify the design, set up pilot runs, implement the production process and hand it
over to the process owner(s).

Quality management tools and methods used in Six Sigma

Within the individual phases of a DMAIC or DMADV project, Six Sigma utilizes many
established quality-management tools that are also used outside of Six Sigma. The
following table shows an overview of the main methods used.

• 5 Whys
• Analysis of variance
• ANOVA Gauge R&R
• Axiomatic design
• Business Process Mapping
• Catapult exercise on variability
• Cause & effects diagram (also
known as fishbone or Ishikawa
diagram)
• Chi-square test of independence and
fits
• Control chart
• Correlation
• Cost-benefit analysis
• CTQ tree
• Design of experiments
• Failure mode and effects analysis
(FMEA)
• General linear model
• Histograms
• [[Homoscedasticity] ]
• Quality Function Deployment (QFD)
• Pareto chart
• Pick chart
• Process capability
• Quantitative marketing research
through use of Enterprise Feedback
Management (EFM) systems
• Regression analysis
• Root cause analysis
• Run charts
• SIPOC analysis (Suppliers, Inputs,
Process, Outputs, Customers)
• Stratification
• Taguchi methods
• Taguchi Loss Function
• TRIZ

Implementation roles
One key innovation of Six Sigma involves the "professionalizing" of quality management
functions. Prior to Six Sigma, quality management in practice was largely relegated to the
production floor and to statisticians in a separate quality department. Formal Six Sigma
programs borrow martial arts ranking terminology to define a hierarchy (and career path)
that cuts across all business functions.
 26

Six Sigma identifies several key roles for its successful implementation.[13]

• Executive Leadership includes the CEO and other members of top management.
They are responsible for setting up a vision for Six Sigma implementation. They
also empower the other role holders with the freedom and resources to explore
new ideas for breakthrough improvements.
• Champions take responsibility for Six Sigma implementation across the
organization in an integrated manner. The Executive Leadership draws them from
upper management. Champions also act as mentors to Black Belts.
• Master Black Belts, identified by champions, act as in-house coaches on Six
Sigma. They devote 100% of their time to Six Sigma. They assist champions and
guide Black Belts and Green Belts. Apart from statistical tasks, they spend their
time on ensuring consistent application of Six Sigma across various functions and
departments.
• Black Belts operate under Master Black Belts to apply Six Sigma methodology to
specific projects. They devote 100% of their time to Six Sigma. They primarily
focus on Six Sigma project execution, whereas Champions and Master Black
Belts focus on identifying projects/functions for Six Sigma.
• Green Belts are the employees who take up Six Sigma implementation along with
their other job responsibilities, operating under the guidance of Black Belts.

Some organizations use additional belt colours, such as Yellow Belts, for employees that
have basic training in Six Sigma tools.

Certification

In the United States, Six Sigma certification for both Green and Black Belts is offered by
the Institute of Industrial Engineers[14] and by the American Society for Quality.[15]

In addition to these examples, there are many other organizations and companies that
offer certification. There currently is no central certification body, either in the United
States or anywhere else in the world.

Origin and meaning of the term "six sigma process"

 27

Graph of the normal distribution, which underlies the statistical assumptions of the Six
Sigma model. The Greek letter σ (sigma) marks the distance on the horizontal axis
between the mean, µ, and the curve's inflection point. The greater this distance, the
greater is the spread of values encountered. For the curve shown above, µ = 0 and σ = 1.
The upper and lower specification limits (USL, LSL) are at a distance of 6σ from the
mean. Because of the properties of the normal distribution, values lying that far away
from the mean are extremely unlikely. Even if the mean were to move right or left by
1.5σ at some point in the future (1.5 sigma shift), there is still a good safety cushion. This
is why Six Sigma aims to have processes where the mean is at least 6σ away from the
nearest specification limit.

The term "six sigma process" comes from the notion that if one has six standard
deviations between the process mean and the nearest specification limit, as shown in the
graph, practically no items will fail to meet specifications.[8] This is based on the
calculation method employed in process capability studies.

Capability studies measure the number of standard deviations between the process mean
and the nearest specification limit in sigma units. As process standard deviation goes up,
or the mean of the process moves away from the center of the tolerance, fewer standard
deviations will fit between the mean and the nearest specification limit, decreasing the
sigma number and increasing the likelihood of items outside specification.[8]

Role of the 1.5 sigma shift

Experience has shown that processes usually do not perform as well in the long term as
they do in the short term.[8] As a result, the number of sigmas that will fit between the
process mean and the nearest specification limit may well drop over time, compared to an
initial short-term study.[8] To account for this real-life increase in process variation over
time, an empirically-based 1.5 sigma shift is introduced into the calculation.[8][16]
According to this idea, a process that fits six sigmas between the process mean and the
nearest specification limit in a short-term study will in the long term only fit 4.5 sigmas –
either because the process mean will move over time, or because the long-term standard
deviation of the process will be greater than that observed in the short term, or both.[8]
 28

Hence the widely accepted definition of a six sigma process as one that produces 3.4
defective parts per million opportunities (DPMO). This is based on the fact that a process
that is normally distributed will have 3.4 parts per million beyond a point that is 4.5
standard deviations above or below the mean (one-sided capability study).[8] So the 3.4
DPMO of a "Six Sigma" process in fact corresponds to 4.5 sigmas, namely 6 sigmas
minus the 1.5 sigma shift introduced to account for long-term variation.[8] This takes
account of special causes that may cause a deterioration in process performance over time
and is designed to prevent underestimation of the defect levels likely to be encountered in
real-life operation.[8]

Sigma levels

A control chart depicting a process that experienced a 1.5 sigma drift in the process mean
toward the upper specification limit starting at midnight. Control charts are used to
maintain 6 sigma quality by signaling when quality professionals should investigate a
process to find and eliminate special-cause variation.
See also: Three sigma rule

The table[17][18] below gives long-term DPMO values corresponding to various short-term
sigma levels.

Note that these figures assume that the process mean will shift by 1.5 sigma toward the
side with the critical specification limit. In other words, they assume that after the initial
study determining the short-term sigma level, the long-term Cpk value will turn out to be
0.5 less than the short-term Cpk value. So, for example, the DPMO figure given for 1
sigma assumes that the long-term process mean will be 0.5 sigma beyond the
specification limit (Cpk = –0.17), rather than 1 sigma within it, as it was in the short-term
 29

study (Cpk = 0.33). Note that the defect percentages only indicate defects exceeding the
specification limit to which the process mean is nearest. Defects beyond the far
specification limit are not included in the percentages.

Sigma level DPMO Percent defective Percentage yield Short-term Cpk Long-term Cpk
1 691,462 69% 31% 0.33 –0.17
2 308,538 31% 69% 0.67 0.17
3 66,807 6.7% 93.3% 1.00 0.5
4 6,210 0.62% 99.38% 1.33 0.83
5 233 0.023% 99.977% 1.67 1.17
6 3.4 0.00034% 99.99966% 2.00 1.5
7 0.019 0.0000019% 99.9999981% 2.33 1.83

Lack of originality

Noted quality expert Joseph M. Juran has described Six Sigma as "a basic version of
quality improvement", stating that "[t]here is nothing new there. It includes what we used
to call facilitators. They've adopted more flamboyant terms, like belts with different
colors. I think that concept has merit to set apart, to create specialists who can be very
helpful. Again, that's not a new idea. The American Society for Quality long ago
established certificates, such as for reliability engineers."[19]

Role of consultants

The use of "Black Belts" as itinerant change agents has (controversially) fostered an
industry of training and certification. Critics argue there is overselling of Six Sigma by
too great a number of consulting firms, many of which claim expertise in Six Sigma
when they only have a rudimentary understanding of the tools and techniques involved.[2]

Potential negative effects

A Fortune article stated that "of 58 large companies that have announced Six Sigma
programs, 91 percent have trailed the S&P 500 since". The statement is attributed to "an
analysis by Charles Holland of consulting firm Qualpro (which espouses a competing
quality-improvement process)."[20] The summary of the article is that Six Sigma is
effective at what it is intended to do, but that it is "narrowly designed to fix an existing
process" and does not help in "coming up with new products or disruptive technologies."
Advocates of Six Sigma have argued that many of these claims are in error or ill-
informed.[21][22]

A BusinessWeek article says that James McNerney's introduction of Six Sigma at 3M

may have had the effect of stifling creativity. It cites two Wharton School professors who
say that Six Sigma leads to incremental innovation at the expense of blue-sky work.[23]
 30

This phenomenon is further explored in the book, Going Lean, which describes a related
approach known as lean dynamics and provides data to show that Ford's "6 Sigma"
program did little to change its fortunes.[24]

Based on arbitrary standards

While 3.4 defects per million opportunities might work well for certain
products/processes, it might not operate optimally or cost effectively for others. A
pacemaker process might need higher standards, for example, whereas a direct mail
advertising campaign might need lower standards. The basis and justification for
choosing 6 (as opposed to 5 or 7, for example) as the number of standard deviations is not
clearly explained. In addition, the Six Sigma model assumes that the process data always
conform to the normal distribution. The calculation of defect rates for situations where
the normal distribution model does not apply is not properly addressed in the current Six
Sigma literature.[2]

Criticism of the 1.5 sigma shift

The statistician Donald J. Wheeler has dismissed the 1.5 sigma shift as "goofy" because
of its arbitrary nature.[25] Its universal applicability is seen as doubtful.[2]

The 1.5 sigma shift has also become contentious because it results in stated "sigma
levels" that reflect short-term rather than long-term performance: a process that has long-
term defect levels corresponding to 4.5 sigma performance is, by Six Sigma convention,
described as a "6 sigma process."[8][26] The accepted Six Sigma scoring system thus cannot
be equated to actual normal distribution probabilities for the stated number of standard
deviations, and this has been a key bone of contention about how Six Sigma measures are
defined.[26] The fact that it is rarely explained that a "6 sigma" process will have long-term
defect rates corresponding to 4.5 sigma performance rather than actual 6 sigma
performance has led several commentators to express the opinion that Six Sigma is a
confidence trick.[8]

Total quality management

Total Quality Management (or TQM) is a management concept coined by W. Edwards
Deming. The basis of TQM is to reduce the errors produced during the manufacturing or
service process, increase customer satisfaction, streamline supply chain management, aim
for modernization of equipment and ensure workers have the highest level of training.
One of the principal aims of TQM is to limit errors to 1 per 1 million units produced.
Total Quality Management is often associated with the development, deployment, and
maintenance of organizational systems that are required for various business processes.

TQM and Six Sigma

 31

The main difference between TQM and Six Sigma (a newer concept) is the approach.
TQM tries to improve quality by ensuring conformance to internal requirements, while
Six Sigma focuses on improving quality by reducing the number of defects.[1]

Quality management

Quality management can be considered to have three main components: quality control,
quality assurance and quality improvement. Quality management is focused not only on
product/service quality, but also the means to achieve it. Quality management therefore
uses quality assurance and control of processes as well as products to achieve more
consistent quality.

Contents
• 1 Quality management evolution
• 2 Principles
• 3 Quality improvement
• 4 Quality standards
• 5 Quality software
• 6 Quality terms
• 7 Academic resources
• 8 See also
• 9 References

• 10 Bibliography

Quality management evolution

Quality management is a recent phenomenon. Advanced civilizations that supported the
arts and crafts allowed clients to choose goods meeting higher quality standards than
normal goods. In societies where art responsibilities of a master craftsman (and similarly
for artists) was to lead their studio, train and supervise the on, the importance of
craftsmen was diminished as mass production and repetitive work practices were
instituted. The aim was to produce large numbers of the same goods. The first proponent
in the US for this approach was Eli Whitney who proposed (interchangeable) parts
manufacture for muskets, hence producing the identical components and creating a
musket assembly line. The next step forward was promoted by several people including
Frederick Winslow Taylor a mechanical engineer who sought to improve industrial
efficiency. He is sometimes called "the father of scientific management." He was one of
the intellectual leaders of the Efficiency Movement and part of his approach laid a further
 32

foundation for quality management, including aspects like standardization and adopting
improved practices. Henry Ford also was important in bringing process and quality
management practices into operation in his assembly lines. In Germany, Karl Friedrich
Benz, often called the inventor of the motor car, was pursuing similar assembly and
production practices, although real mass production was properly initiated in Volkswagen
after World War II. From this period onwards, North American companies focused
predominantly upon production against lower cost with increased efficiency.

Walter A. Shewhart made a major step in the evolution towards quality management by
creating a method for quality control for production, using statistical methods, first
proposed in 1924. This became the foundation for his ongoing work on statistical quality
control. W. Edwards Deming later applied statistical process control methods in the
United States during World War II, thereby successfully improving quality in the
manufacture of munitions and other strategically important products.

Quality leadership from a national perspective has changed over the past five to six
decades. After the second world war, Japan decided to make quality improvement a
national imperative as part of rebuilding their economy, and sought the help of Shewhart,
Deming and Juran, amongst others. W. Edwards Deming championed Shewhart's ideas in
Japan from 1950 onwards. He is probably best known for his management philosophy
establishing quality, productivity, and competitive position. He has formulated 14 points
of attention for managers, which are a high level abstraction of many of his deep insights.
They should be interpreted by learning and understanding the deeper insights and
include:

• Break down barriers between departments

• Management should learn their responsibilities, and take on leadership
• Improve constantly
• Institute a programme of education and self-improvement

In the 1950s and 1960s, Japanese goods were synonymous with cheapness and low
quality, but over time their quality initiatives began to be successful, with Japan
achieving very high levels of quality in products from the 1970s onward. For example,
Japanese cars regularly top the J.D. Power customer satisfaction ratings. In the 1980s
Deming was asked by Ford Motor Company to start a quality initiative after they realized
that they were falling behind Japanese manufacturers. A number of highly successful
quality initiatives have been invented by the Japanese (see for example on this page:
Taguchi, QFD, Toyota Production System. Many of the methods not only provide
techniques but also have associated quality culture (i.e. people factors). These methods
are now adopted by the same western countries that decades earlier derided Japanese
methods.

Customers recognize that quality is an important attribute in products and services.

Suppliers recognize that quality can be an important differentiator between their own
offerings and those of competitors (quality differentiation is also called the quality gap).
In the past two decades this quality gap has been greatly reduced between competitive
 33

products and services. This is partly due to the contracting (also called outsourcing) of
manufacture to countries like India and China, as well internationalization of trade and
competition. These countries amongst many others have raised their own standards of
quality in order to meet International standards and customer demands. The ISO 9000
series of standards are probably the best known International standards for quality
management.

There are a huge number of books available on quality. In recent times some themes have
become more significant including quality culture, the importance of knowledge
management, and the role of leadership in promoting and achieving high quality.
Disciplines like systems thinking are bringing more holistic approaches to quality so that
people, process and products are considered together rather than independent factors in
quality management.

The influence of quality thinking has spread to non-traditional applications outside of

walls of manufacturing, extending into service sectors and into areas such as sales,
marketing and customer service.[1]

Principles
Quality management adopts a number of management principles[2] that can be used by
upper management to guide their organisations towards improved performance. The
principles cover:

• Customer focus
• Leadership
• Involvement of people
• Process approach
• System approach to management
• Continual improvement
• Factual approach to decision making
• Mutually beneficial supplier relationships

Quality improvement
There are many methods for quality improvement. These cover product improvement,
process improvement and people based improvement. In the following list are methods of
quality management and techniques that incorporate and drive quality improvement:

1. ISO 9004:2008 — guidelines for performance improvement.

2. ISO 15504-4: 2005 — information technology — process assessment — Part 4:
Guidance on use for process improvement and process capability determination.
3. QFD — quality function deployment, also known as the house of quality
approach.
 34

4. Kaizen — 改善, Japanese for change for the better; the common English term is
continuous improvement.
5. Zero Defect Program — created by NEC Corporation of Japan, based upon
statistical process control and one of the inputs for the inventors of Six Sigma.
6. Six Sigma — 6σ, Six Sigma combines established methods such as statistical
process control, design of experiments and FMEA in an overall framework.
7. PDCA — plan, do, check, act cycle for quality control purposes. (Six Sigma's
DMAIC method (define, measure, analyze, improve, control) may be viewed as a
particular implementation of this.)
8. Quality circle — a group (people oriented) approach to improvement.
9. Taguchi methods — statistical oriented methods including quality robustness,
quality loss function, and target specifications.
10. The Toyota Production System — reworked in the west into lean manufacturing.
11. Kansei Engineering — an approach that focuses on capturing customer emotional
feedback about products to drive improvement.
12. TQM — total quality management is a management strategy aimed at embedding
awareness of quality in all organizational processes. First promoted in Japan with
the Deming prize which was adopted and adapted in USA as the Malcolm
Baldrige National Quality Award and in Europe as the European Foundation for
Quality Management award (each with their own variations).
13. TRIZ — meaning "theory of inventive problem solving"
14. BPR — business process reengineering, a management approach aiming at 'clean
slate' improvements (That is, ignoring existing practices).
15. OQM — Object-oriented Quality Management, a model for quality management.
[3]

Proponents of each approach have sought to improve them as well as apply them for
small, medium and large gains. Simple one is Process Approach, which forms the basis
of ISO 9001:2008 Quality Management System standard, duly driven from the 'Eight
principles of Quality managagement', process approach being one of them. Thareja[4]
writes about the mechanism and benefits: "The process (proficiency) may be limited in
words, but not in its applicability. While it fulfills the criteria of all-round gains: in terms
of the competencies augmented by the participants; the organisation seeks newer
directions to the business success, the individual brand image of both the people and the
organisation, in turn, goes up. The competencies which were hitherto rated as being
smaller, are better recognized and now acclaimed to be more potent and fruitful".[5] The
more complex Quality improvement tools are tailored for enterprise types not originally
targeted. For example, Six Sigma was designed for manufacturing but has spread to
service enterprises. Each of these approaches and methods has met with success but also
with failures.

Some of the common differentiators between success and failure include commitment,
knowledge and expertise to guide improvement, scope of change/improvement desired
(Big Bang type changes tend to fail more often compared to smaller changes) and
adaption to enterprise cultures. For example, quality circles do not work well in every
 35

enterprise (and are even discouraged by some managers), and relatively few TQM-
participating enterprises have won the national quality awards.

There have been well publicized failures of BPR, as well as Six Sigma. Enterprises
therefore need to consider carefully which quality improvement methods to adopt, and
certainly should not adopt all those listed here.

It is important not to underestimate the people factors, such as culture, in selecting a

quality improvement approach. Any improvement (change) takes time to implement, gain
acceptance and stabilize as accepted practice. Improvement must allow pauses between
implementing new changes so that the change is stabilized and assessed as a real
improvement, before the next improvement is made (hence continual improvement, not
continuous improvement).

Improvements that change the culture take longer as they have to overcome greater
resistance to change. It is easier and often more effective to work within the existing
cultural boundaries and make small improvements (that is Kaizen) than to make major
transformational changes. Use of Kaizen in Japan was a major reason for the creation of
Japanese industrial and economic strength.

On the other hand, transformational change works best when an enterprise faces a crisis
and needs to make major changes in order to survive. In Japan, the land of Kaizen, Carlos
Ghosn led a transformational change at Nissan Motor Company which was in a financial
and operational crisis. Well organized quality improvement programs take all these
factors into account when selecting the quality improvement methods.

Quality standards
The International Organization for Standardization (ISO) created the Quality
Management System (QMS) standards in 1987. They were the ISO 9000:1987 series of
standards comprising ISO 9001:1987, ISO 9002:1987 and ISO 9003:1987; which were
applicable in different types of industries, based on the type of activity or process:
designing, production or service delivery.

The standards are reviewed every few years by the International Organization for
Standardization. The version in 1994 was called the ISO 9000:1994 series; consisting of
the ISO 9001:1994, 9002:1994 and 9003:1994 versions.

The last major revision was in the year 2008 and the series was called ISO 9000:2000
series. The ISO 9002 and 9003 standards were integrated into one single certifiable
standard: ISO 9001:2008. After December 2003, organizations holding ISO 9002 or 9003
standards had to complete a transition to the new standard.

ISO released a minor revision, ISO 9001:2008 on 14 October 2008. It contains no new
requirements. Many of the changes were to improve consistency in grammar, facilitating
 36

translation of the standard into other languages for use by over 950,000 certified
organisations in the 175 countries (as at Dec 2007) that use the standard.

The ISO 9004:2000 document gives guidelines for performance improvement over and
above the basic standard (ISO 9001:2000). This standard provides a measurement
framework for improved quality management, similar to and based upon the
measurement framework for process assessment.

The Quality Management System standards created by ISO are meant to certify the
processes and the system of an organization, not the product or service itself. ISO 9000
standards do not certify the quality of the product or service.

In 2005 the International Organization for Standardization released a standard, ISO

22000, meant for the food industry. This standard covers the values and principles of ISO
9000 and the HACCP standards. It gives one single integrated standard for the food
industry and is expected to become more popular in the coming years in such industry.

ISO has also released standards for other industries. For example Technical Standard TS
16949 defines requirements in addition to those in ISO 9001:2008 specifically for the
automotive industry.

ISO has a number of standards that support quality management. One group describes
processes (including ISO 12207 & ISO 15288) and another describes process assessment
and improvement ISO 15504.

The Software Engineering Institute has its own process assessment and improvement
methods, called CMMi (Capability Maturity Model — integrated) and IDEAL
respectively.

Quality software
The software used to track the three main components of quality management through the
use of databases and/or charting applications.

Quality terms
• Quality Improvement can be distinguished from Quality Control in that Quality
Improvement is the purposeful change of a process to improve the reliability of
achieving an outcome.
• Quality Control is the ongoing effort to maintain the integrity of a process to
maintain the reliability of achieving an outcome.
• Quality Assurance is the planned or systematic actions necessary to provide
enough confidence that a product or service will satisfy the given requirements.

Academic resources
 37

• International Journal of Productivity and Quality Management, ISSN 1746-6474,

Inderscience
• International Journal of Quality & Reliability Management, ISSN: 0265-671X,
Emerald Publishing Group

[edit] See also

• Quality audit
• Quality infrastructure
• Quality management system
• Sales process engineering
• Systems thinking - Applications
• Hoshin Kanri
• Health care
• Expediting
• Test management

[hide]
v•d•e
Software Engineering

Requirements analysis • Systems analysis • Software design •

Fields Computer programming • Formal methods • Software testing •
Software deployment • Software maintenance

Data modeling • Enterprise architecture • Functional specification •

Modeling language • Programming paradigm • Software • Software
Concepts architecture • Software development methodology • Software
development process • Software quality • Software quality assurance •
Software archaeology • Structured analysis

Agile • Aspect-oriented • Object orientation • Ontology • Service

Orientations
orientation • SDLC

Agile • Iterative model • RUP • Scrum • Spiral

Development models
model • Waterfall model • XP • V-Model

Automotive SPICE • CMMI • Data model •

Models Function model • Information model •
Other models
Metamodeling • Object model • Systems model
• View model

Modeling languagesIDEF • UML

 38

Kent Beck • Grady Booch • Fred Brooks • Barry Boehm • Ward

Cunningham • Ole-Johan Dahl • Tom DeMarco • Martin Fowler • C.
Software A. R. Hoare • Watts Humphrey • Michael A. Jackson • Ivar Jacobson
engineers • Craig Larman • James Martin • Bertrand Meyer • David Parnas •
Winston W. Royce • Colette Rolland • James Rumbaugh • Niklaus
Wirth • Edward Yourdon • Victor Basili

Computer science • Computer engineering • Enterprise engineering •

Related fields History • Management • Mathematics • Project management •
Quality management • Software ergonomics • Systems engineering

Quality management system

A quality management system (QMS) can be expressed as the organizational structure,

procedures, processes and resources needed to implement quality management.

Contents
• 1 Elements of a Quality Management System
• 2 Concept of quality - historical background
• 3 Quality system for medical devices
• 4 Quality management organizations and awards
• 5 See also
• 6 References

• 7 External links

Elements of a Quality Management System

1. Organizational Structure
2. Responsibilities
3. Methods
4. Processes
5. Resources
6. Customer Satisfaction
7. Continuous Improvement

Concept of quality - historical background

 39

The concept of quality as we think of it now first emerged out of the Industrial
Revolution. Previously goods had been made from start to finish by the same person or
team of people, with handcrafting and tweaking the product to meet 'quality criteria'.
Mass production brought huge teams of people together to work on specific stages of
production where one person would not necessarily complete a product from start to
finish. In the late 1800s pioneers such as Frederick Winslow Taylor and Henry Ford
recognized the limitations of the methods being used in mass production at the time and
the subsequent varying quality of output. Birland established Quality Departments to
oversee the quality of production and rectifying of errors, and Ford emphasized
standardization of design and component standards to ensure a standard product was
produced. Management of quality was the responsibility of the Quality department and
was implemented by Inspection of product output to 'catch' defects.

Application of statistical control came later as a result of World War production methods.
Quality management systems are the outgrowth of work done by W. Edwards Deming, a
statistician, after whom the Deming Prize for quality is named.

Quality, as a profession and the managerial process associated with the quality function,
was introduced during the second-half of the 20th century, and has evolved since then.
Over this period, few other disciplines have seen as many changes as the quality
profession.

The quality profession grew from simple control, to engineering, to systems engineering.
Quality control activities were predominant in the 1940s, 1950s, and 1960s. The 1970s
were an era of quality engineering and the 1990s saw quality systems as an emerging
field. Like medicine, accounting, and engineering, quality has achieved status as a
recognized profession[citation needed]

Quality system for medical devices

Quality System requirements for medical have been internationally recognized as a way
to assure product safety and efficacy and customer satisfaction since at least 1983, and
were instituted as requirements in a final rule published on October 7, 1996. The U.S.
Food and Drug Administration (FDA) had documented design defects in medical devices
that contributed to recalls from 1983 to 1989 that would have been prevented if Quality
Systems had been in place. The rule is promulgated at 21 CFR 820.

According to current Good Manufacturing Practice (GMP), medical device

manufacturers have the responsibility to use good judgment when developing their
quality system and apply those sections of the FDA Quality System (QS) Regulation that
are applicable to their specific products and operations, in Part 820 of the QS regulation.
As with GMP, operating within this flexibility, it is the responsibility of each
manufacturer to establish requirements for each type or family of devices that will result
in devices that are safe and effective, and to establish methods and procedures to design,
produce, and distribute devices that meet the quality system requirements.
 40

The FDA has identified in the QS regulation the essential elements that a quality system
shall embody for design, production and distribution, without prescribing specific ways
to establish these elements. These elements include:

Quality System

• personnel training and qualification;

• controlling the product design;
• controlling documentation;
• controlling purchasing;
• product identification and traceability at all stages of production;
• controlling and defining production and process;
• defining and controlling inspection, measuring and test equipment;
• validating processes;
• product acceptance;
• controlling nonconforming product;
• instituting corrective and preventive action when errors occur;
• labeling and packaging controls;
• handling, storage, distribution and installation;
• records;
• servicing;
• statistical techniques;

all overseen by Management Responsibility and Quality Audits.

Because the QS regulation covers a broad spectrum of devices and production processes,
it allows some leeway in the details of quality system elements. It is left to manufacturers
to determine the necessity for, or extent of, some quality elements and to develop and
implement procedures tailored to their particular processes and devices. For example, if it
is impossible to mix up labels at a manufacturer because there is only one label to each
product, then there is no necessity for the manufacturer to comply with all of the GMP
requirements under device labeling.
 41

Drug manufactures are regulated under a different section of the Code of Federal
Regulations: 21 CFR 211. However, the FDA has instituted new policies requiring QS
for pharmaceuticals.

Quality management organizations and awards

The International Organization for Standardization's ISO 9001:2008 series describes
standards for a QMS addressing the principles and processes surrounding the design,
development and delivery of a general product or service. Organizations can participate
in a continuing certification process to ISO 9001:2000 to demonstrate their compliance
with the standard, which includes a requirement for continual (i.e. planned) improvement
of the QMS.

(ISO 9000:2005 provides information the fundamentals and vocabulary used in quality
management systems. ISO 9004:2009 provides guidance on quality management
approach for the sustained success of an organization. Neither of these standards can be
used for certification purposes as they provide guidance, not requirements).

The Malcolm Baldrige National Quality Award is a competition to identify and recognize
top-quality U.S. companies. This model addresses a broadly based range of quality
criteria, including commercial success and corporate leadership. Once an organization
has won the award it has to wait several years before being eligible to apply again.

The European Foundation for Quality Management's EFQM Excellence Model supports
an award scheme similar to the Malcolm Baldrige Award for European companies.

In Canada, the National Quality Institute presents the 'Canada Awards for Excellence' on
an annual basis to organisations that have displayed outstanding performance in the areas
of Quality and Workplace Wellness, and have met the Institute's criteria with documented
overall achievements and results.

The Alliance for Performance Excellence is a network of state, local, and international
organizations that use the Malcolm Baldrige National Quality Award criteria and model
at the grassroots level to improve the performance of local organizations and economies.
NetworkforExcellence.org is the Alliance web site; browsers can find Alliance members
in their state and get the latest news and events from the Baldrige community.

Seven Basic Tools of Quality

The Seven Basic Tools of Quality is a designation given to a fixed set of graphical
techniques identified as being most helpful in troubleshooting issues related to quality.[1]
They are called basic because they are suitable for people with little formal training in
statistics and because they can be used to solve the vast majority of quality-related issues.
[2]
 42

The tools are:[3]

• The cause-and-effect or Ishikawa diagram

• The check sheet
• The control chart
• The histogram
• The Pareto chart
• The scatter diagram
• Stratification (alternately flow chart or run chart)

The designation arose in postwar Japan, inspired by the seven famous weapons of
Benkei.[4] At that time, companies that had set about training their workforces in
statistical quality control found that the complexity of the subject intimidated the vast
majority of their workers and scaled back training to focus primarily on simpler methods
which suffice for most quality-related issues anyway.[5]

The Seven Basic Tools stand in contrast with more advanced statistical methods such as
survey sampling, acceptance sampling, statistical hypothesis testing, design of
experiments, multivariate analysis, and various methods developed in the field of
operations research.[6]

Ishikawa diagram
Ishikawa diagram

One of the Seven Basic Tools of Quality

First Kaoru Ishikawa

described by
 43

Purpose To break down (in successive layers of

detail) root causes that potentially contribute
to a particular effect

Ishikawa diagrams (also called fishbone diagrams or cause-and-effect diagrams) are

diagrams that show the causes of a certain event. Common uses of the Ishikawa diagram
are product design and quality defect prevention, to identify potential factors causing an
overall effect. Each cause or reason for imperfection is a source of variation. Causes are
usually grouped into major categories to identify these sources of variation. The
categories typically include:

• People: Anyone involved with the process

• Methods: How the process is performed and the specific requirements for doing
it, such as policies, procedures, rules, regulations and laws
• Machines: Any equipment, computers, tools etc. required to accomplish the job
• Materials: Raw materials, parts, pens, paper, etc. used to produce the final product
• Measurements: Data generated from the process that are used to evaluate its
quality
• Environment: The conditions, such as location, time, temperature, and culture in
which the process operates

Contents
• 1 Overview
• 2 Causes
o 2.1 The 6 Ms (used in manufacturing)
o 2.2 The 8 Ps (used in service industry)
o 2.3 The 4 Ss (used in service industry)
o 2.4 More Ms
• 3 References
o 3.1 Further reading

• 4 External links

Overview
 44

Ishikawa diagram, in fishbone shape, showing factors of Equipment, Process, People,

Materials, Environment and Management, all affecting the overall problem. Smaller
arrows connect the sub-causes to major causes.

Ishikawa diagrams were proposed by Kaoru Ishikawa[1] in the 1960s, who pioneered
quality management processes in the Kawasaki shipyards, and in the process became one
of the founding fathers of modern management.

It was first used in the 1960s, and is considered one of the seven basic tools of quality
control.[2] It is known as a fishbone diagram because of its shape, similar to the side view
of a fish skeleton.

Mazda Motors famously used an Ishikawa diagram in the development of the Miata
sports car, where the required result was "Jinba Ittai" or "Horse and Rider as One". The
main causes included such aspects as "touch" and "braking" with the lesser causes
including highly granular factors such as "50/50 weight distribution" and "able to rest
elbow on top of driver's door". Every factor identified in the diagram was included in the
final design.

Causes
Causes in the diagram are often categorized, such as to the 4 M's, described below.
Cause-and-effect diagrams can reveal key relationships among various variables, and the
possible causes provide additional insight into process behavior.

Causes can be derived from brainstorming sessions. These groups can then be labeled as
categories of the fishbone. They will typically be one of the traditional categories
mentioned above but may be something unique to the application in a specific case.
Causes can be traced back to root causes with the 5 Whys technique.

Typical categories are:

The 6 Ms (used in manufacturing)

• Machine (technology)
• Method (process/inspection)
 45

• Material (raw, consumables etc.)

• Man Power (physical work)/Mind Power (brain work): Kaizens, Suggestions
• Money
• Milieu (External Environment or surroundings)

The 8 Ps (used in service industry)

• Product=Service
• Price
• Place
• Promotion
• People
• Process
• Physical Evidence
• Productivity & Quality

The 4 Ss (used in service industry)

• Surroundings
• Suppliers
• Systems
• Skills

More Ms

• Mother Nature (Environment)

• Measurement (Inspection)
• Maintenance
• Management

Check sheet

Check sheet
 46

One of the Seven Basic Tools of Quality

Purpose To provide a structured way to collect quality-

related data as a rough means for assessing a
process or as an input to other analyses

The check sheet is a simple document that is used for collecting data in real-time and at
the location where the data is generated. The document is typically a blank form that is
designed for the quick, easy, and efficient recording of the desired information, which
can be either quantitative or qualitative. When the information is quantitative, the
checksheet is sometimes called a tally sheet.

A defining characteristic of a checksheet is that data is recorded by making marks

("checks") on it. A typical checksheet is divided into regions, and marks made in
different regions have different significance. Data is read by observing the location and
number of marks on the sheet. 5 Basic types of Check Sheets:

• Classification: A trait such as a defect or failure mode must be classified into a

category.
• Location: The physical location of a trait is indicated on a picture of a part or item
being evaluated.
• Frequency: The presence or absence of a trait or combination of traits is indicated.
Also number of occurrences of a trait on a part can be indicated.
• Measurement Scale: A measurement scale is divided into intervals, and
measurements are indicated by checking an appropriate interval.
• Check List: The items to be performed for a task are listed so that, as each is
accomplished, it can be indicated as having been completed.
 47

An example of a simple quality control checksheet

The check sheet is one of the seven basic tools of quality control.[1]

Control chart
Control chart

One of the Seven Basic Tools of Quality

First Walter A. Shewhart

described by

Purpose To determine whether a process should

undergo a formal examination for quality-
 48

related problems

Control charts, also known as Shewhart charts or process-behaviour charts, in

statistical process control are tools used to determine whether or not a manufacturing or
business process is in a state of statistical control.

Contents
• 1 Overview
• 2 History
• 3 Chart details
o 3.1 Chart usage
o 3.2 Choice of limits
o 3.3 Calculation of standard deviation
• 4 Rules for detecting signals
• 5 Alternative bases
• 6 Performance of control charts
• 7 Criticisms
• 8 Types of charts
• 9 See also
• 10 Notes
• 11 Bibliography

• 12 External links

Overview
If analysis of the control chart indicates that the process is currently under control (i.e. is
stable, with variation only coming from sources common to the process) then data from
the process can be used to predict the future performance of the process. If the chart
indicates that the process being monitored is not in control, analysis of the chart can help
determine the sources of variation, which can then be eliminated to bring the process
back into control. A control chart is a specific kind of run chart that allows significant
change to be differentiated from the natural variability of the process.

The control chart can be seen as part of an objective and disciplined approach that
enables correct decisions regarding control of the process, including whether or not to
change process control parameters. Process parameters should never be adjusted for a
process that is in control, as this will result in degraded process performance.[1]

The control chart is one of the seven basic tools of quality control.[2]

History
 49

The control chart was invented by Walter A. Shewhart while working for Bell Labs in the
1920s. The company's engineers had been seeking to improve the reliability of their
telephony transmission systems. Because amplifiers and other equipment had to be buried
underground, there was a business need to reduce the frequency of failures and repairs.
By 1920 they[who?] had already realized the importance of reducing variation in a
manufacturing process. Moreover, they had realized that continual process-adjustment in
reaction to non-conformance actually increased variation and degraded quality. Shewhart
framed the problem in terms of Common- and special-causes of variation and, on May
16, 1924, wrote an internal memo introducing the control chart as a tool for
distinguishing between the two. Dr. Shewhart's boss, George Edwards, recalled: "Dr.
Shewhart prepared a little memorandum only about a page in length. About a third of that
page was given over to a simple diagram which we would all recognize today as a
schematic control chart. That diagram, and the short text which preceded and followed it,
set forth all of the essential principles and considerations which are involved in what we
know today as process quality control." [3] Shewhart stressed that bringing a production
process into a state of statistical control, where there is only common-cause variation, and
keeping it in control, is necessary to predict future output and to manage a process
economically.

Dr. Shewhart created the basis for the control chart and the concept of a state of statistical
control by carefully designed experiments. While Dr. Shewhart drew from pure
mathematical statistical theories, he understood data from physical processes typically
produce a "normal distribution curve" (a Gaussian distribution, also commonly referred
to as a "bell curve"). He discovered that observed variation in manufacturing data did not
always behave the same way as data in nature (Brownian motion of particles). Dr.
Shewhart concluded that while every process displays variation, some processes display
controlled variation that is natural to the process, while others display uncontrolled
variation that is not present in the process causal system at all times.[4]

In 1924 or 1925, Shewhart's innovation came to the attention of W. Edwards Deming,

then working at the Hawthorne facility. Deming later worked at the United States
Department of Agriculture and then became the mathematical advisor to the United
States Census Bureau. Over the next half a century, Deming became the foremost
champion and proponent of Shewhart's work. After the defeat of Japan at the close of
World War II, Deming served as statistical consultant to the Supreme Commander of the
Allied Powers. His ensuing involvement in Japanese life, and long career as an industrial
consultant there, spread Shewhart's thinking, and the use of the control chart, widely in
Japanese manufacturing industry throughout the 1950s and 1960s.

Chart details
A control chart consists of:

• Points representing a statistic (e.g., a mean, range, proportion) of measurements of

a quality characteristic in samples taken from the process at different times [the
data]
 50

• The mean of this statistic using all the samples is calculated (e.g., the mean of the
means, mean of the ranges, mean of the proportions)
• A center line is drawn at the value of the mean of the statistic
• The standard error (e.g., standard deviation/sqrt(n) for the mean) of the statistic is
also calculated using all the samples
• Upper and lower control limits (sometimes called "natural process limits") that
indicate the threshold at which the process output is considered statistically
'unlikely' are drawn typically at 3 standard errors from the center line

The chart may have other optional features, including:

• Upper and lower warning limits, drawn as separate lines, typically two standard
errors above and below the center line
• Division into zones, with the addition of rules governing frequencies of
observations in each zone
• Annotation with events of interest, as determined by the Quality Engineer in
charge of the process's quality

Chart usage

If the process is in control, all points will plot within the control limits. Any observations
outside the limits, or systematic patterns within, suggest the introduction of a new (and
likely unanticipated) source of variation, known as a special-cause variation. Since
increased variation means increased quality costs, a control chart "signaling" the presence
of a special-cause requires immediate investigation.

This makes the control limits very important decision aids. The control limits tell you
about process behavior and have no intrinsic relationship to any specification targets or
engineering tolerance. In practice, the process mean (and hence the center line) may not
coincide with the specified value (or target) of the quality characteristic because the
process' design simply can't deliver the process characteristic at the desired level.
 51

Control charts limit specification limits or targets because of the tendency of those
involved with the process (e.g., machine operators) to focus on performing to
specification when in fact the least-cost course of action is to keep process variation as
low as possible. Attempting to make a process whose natural center is not the same as the
target perform to target specification increases process variability and increases costs
significantly and is the cause of much inefficiency in operations. Process capability
studies do examine the relationship between the natural process limits (the control limits)
and specifications, however.

The purpose of control charts is to allow simple detection of events that are indicative of
actual process change. This simple decision can be difficult where the process
characteristic is continuously varying; the control chart provides statistically objective
criteria of change. When change is detected and considered good its cause should be
identified and possibly become the new way of working, where the change is bad then its
cause should be identified and eliminated.

The purpose in adding warning limits or subdividing the control chart into zones is to
provide early notification if something is amiss. Instead of immediately launching a
process improvement effort to determine whether special causes are present, the Quality
Engineer may temporarily increase the rate at which samples are taken from the process
output until it's clear that the process is truly in control. Note that with three sigma limits,
one expects to be signaled approximately once out of every 370 points on average, just
due to common-causes.

Choice of limits

Shewhart set 3-sigma (3-standard error) limits on the following basis.

• The coarse result of Chebyshev's inequality that, for any probability distribution,
the probability of an outcome greater than k standard deviations from the mean is
at most 1/k2.
• The finer result of the Vysochanskii-Petunin inequality, that for any unimodal
probability distribution, the probability of an outcome greater than k standard
deviations from the mean is at most 4/(9k2).
• The empirical investigation of sundry probability distributions reveals that at least
99% of observations occurred within three standard deviations of the mean.

Shewhart summarized the conclusions by saying:

... the fact that the criterion which we happen to use has a fine ancestry in highbrow
statistical theorems does not justify its use. Such justification must come from empirical
evidence that it works. As the practical engineer might say, the proof of the pudding is in
the eating.

Though he initially experimented with limits based on probability distributions, Shewhart

ultimately wrote:
 52

Some of the earliest attempts to characterize a state of statistical control were inspired
by the belief that there existed a special form of frequency function f and it was early
argued that the normal law characterized such a state. When the normal law was found
to be inadequate, then generalized functional forms were tried. Today, however, all
hopes of finding a unique functional form f are blasted.

The control chart is intended as a heuristic. Deming insisted that it is not a hypothesis test
and is not motivated by the Neyman-Pearson lemma. He contended that the disjoint
nature of population and sampling frame in most industrial situations compromised the
use of conventional statistical techniques. Deming's intention was to seek insights into the
cause system of a process ...under a wide range of unknowable circumstances, future and
past .... He claimed that, under such conditions, 3-sigma limits provided ... a rational and
economic guide to minimum economic loss... from the two errors:

1. Ascribe a variation or a mistake to a special cause when in fact the cause belongs
to the system (common cause). (Also known as a Type I error)
2. Ascribe a variation or a mistake to the system (common causes) when in fact the
cause was special. (Also known as a Type II error)

Calculation of standard deviation

As for the calculation of control limits, the standard deviation (error) required is that of
the common-cause variation in the process. Hence, the usual estimator, in terms of
sample variance, is not used as this estimates the total squared-error loss from both
common- and special-causes of variation.

An alternative method is to use the relationship between the range of a sample and its
standard deviation derived by Leonard H. C. Tippett, an estimator which tends to be less
influenced by the extreme observations which typify special-causes.

Rules for detecting signals

The most common sets are:

• The Western Electric rules

• The Wheeler rules (equivalent to the Western Electric zone tests[5])
• The Nelson rules

There has been particular controversy as to how long a run of observations, all on the
same side of the centre line, should count as a signal, with 6, 7, 8 and 9 all being
advocated by various writers.

The most important principle for choosing a set of rules is that the choice be made before
the data is inspected. Choosing rules once the data have been seen tends to increase the
Type I error rate owing to testing effects suggested by the data.
 53

Alternative bases
In 1935, the British Standards Institution, under the influence of Egon Pearson and
against Shewhart's spirit, adopted control charts, replacing 3-sigma limits with limits
based on percentiles of the normal distribution. This move continues to be represented by
John Oakland and others but has been widely deprecated by writers in the Shewhart-
Deming tradition.

Performance of control charts

When a point falls outside of the limits established for a given control chart, those
responsible for the underlying process are expected to determine whether a special cause
has occurred. If one has, then that cause should be eliminated if possible. It is known that
even when a process is in control (that is, no special causes are present in the system),
there is approximately a 0.27% probability of a point exceeding 3-sigma control limits.
Since the control limits are evaluated each time a point is added to the chart, it readily
follows that every control chart will eventually signal the possible presence of a special
cause, even though one may not have actually occurred. For a Shewhart control chart
using 3-sigma limits, this false alarm occurs on average once every 1/0.0027 or 370.4
observations. Therefore, the in-control average run length (or in-control ARL) of a
Shewhart chart is 370.4.

Meanwhile, if a special cause does occur, it may not be of sufficient magnitude for the
chart to produce an immediate alarm condition. If a special cause occurs, one can
describe that cause by measuring the change in the mean and/or variance of the process in
question. When those changes are quantified, it is possible to determine the out-of-control
ARL for the chart.

It turns out that Shewhart charts are quite good at detecting large changes in the process
mean or variance, as their out-of-control ARLs are fairly short in these cases. However,
for smaller changes (such as a 1- or 2-sigma change in the mean), the Shewhart chart
does not detect these changes efficiently. Other types of control charts have been
developed, such as the EWMA chart and the CUSUM chart, which detect smaller
changes more efficiently by making use of information from observations collected prior
to the most recent data point.

Criticisms
Several authors have criticised the control chart on the grounds that it violates the
likelihood principle.[citation needed] However, the principle is itself controversial and
supporters of control charts further argue that, in general, it is impossible to specify a
likelihood function for a process not in statistical control, especially where knowledge
about the cause system of the process is weak.[citation needed]
 54

Some authors have criticised the use of average run lengths (ARLs) for comparing
control chart performance, because that average usually follows a geometric distribution,
which has high variability and difficulties.[citation needed]

Types of charts
Process Process Size of
Chart Process observation observations observations shift to
relationships type detect
Quality characteristic
Large (≥
and R chart measurement within one Independent Variables
1.5σ)
subgroup
Quality characteristic
Large (≥
and s chart measurement within one Independent Variables
1.5σ)
subgroup
Shewhart
individuals Quality characteristic
Large (≥
control chart measurement for one Independent Variables†
1.5σ)
(ImR chart or observation
XmR chart)
Quality characteristic
Large (≥
Three-way chart measurement within one Independent Variables
1.5σ)
subgroup
Fraction nonconforming Large (≥
p-chart Independent Attributes†
within one subgroup 1.5σ)
Number nonconforming Large (≥
np-chart Independent Attributes†
within one subgroup 1.5σ)
Number of
Large (≥
c-chart nonconformances within Independent Attributes†
1.5σ)
one subgroup
Nonconformances per unit Large (≥
u-chart Independent Attributes†
within one subgroup 1.5σ)
Exponentially weighted
moving average of quality Attributes or Small (<
EWMA chart Independent
characteristic measurement variables 1.5σ)
within one subgroup
Cumulative sum of quality
Attributes or Small (<
CUSUM chart characteristic measurement Independent
variables 1.5σ)
within one subgroup
Quality characteristic
Time series Attributes or
measurement within one Autocorrelated N/A
model variables
subgroup
Quality characteristic Dependent of
Regression Large (≥
measurement within one process control Variables
Control Chart 1.5σ)
subgroup variables
 55

†
Some practitioners also recommend the use of Individuals charts for attribute data,
particularly when the assumptions of either binomially-distributed data (p- and np-charts)
or Poisson-distributed data (u- and c-charts) are violated.[6] Two primary justifications are
given for this practice. First, normality is not necessary for statistical control, so the
Individuals chart may be used with non-normal data.[7] Second, attribute charts derive the
measure of dispersion directly from the mean proportion (by assuming a probability
distribution), while Individuals charts derive the measure of dispersion from the data,
independent of the mean, making Individuals charts more robust than attributes charts to
violations of the assumptions about the distribution of the underlying population.[8] It is
sometimes noted that the substitution of the Individuals chart works best for large counts,
when the binomial and Poisson distributions approximate a normal distribution. i.e. when
the number of trials n > 1000 for p- and np-charts or λ > 500 for u- and c-charts.

Critics of this approach argue that control charts should not be used then their underlying
assumptions are violated, such as when process data is neither normally distributed nor
binomially (or Poisson) distributed. Such processes are not in control and should be
improved before the application of control charts. Additionally, application of the charts
in the presence of such deviations increases the type I and type II error rates of the
control charts, and may make the chart of little practical use.[citation needed]

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 56

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 57

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Histogram
 58

From Wikipedia, the free encyclopedia

Jump to: navigation, search
For the histograms used in digital image processing, see Image histogram and Color
histogram.

Histogram

One of the Seven Basic Tools of Quality

First Karl Pearson

described by

Purpose To roughly assess the probability distribution

of a given variable by depicting the
frequencies of observations occurring in
certain ranges of values

In statistics, a histogram is a technique to estimate the probability distribution of a

variable, by counting the frequencies of data into discrete bins, and then plotting the
number of members in each bin versus the bin number.[1] This is usually but not
necessarily displayed by a bar chart where each bar is erected over an interval, with an
area equal to the frequency of the observations in the interval. The height of a rectangle is
also equal to the frequency density of the interval, i.e., the frequency divided by the width
of the interval. The total area of the histogram is equal to the number of data. A
histogram may also be normalized displaying relative frequencies. It then shows the
proportion of cases that fall into each of several categories, with the total area equaling 1.
The categories are usually specified as consecutive, non-overlapping intervals of a
variable. The categories (intervals) must be adjacent, and often are chosen to be of the
same size.[2]
 59

Histograms are used to plot density of data, and often for density estimation: estimating
the probability density function of the underlying variable. The total area of a histogram
used for probability density is always normalized to 1. If the length of the intervals on the
x-axis are all 1, then a histogram is identical to a relative frequency plot.

An alternative to the histogram is kernel density estimation, which uses a kernel to

smooth samples. This will construct a smooth probability density function, which will in
general more accurately reflect the underlying variable.

The histogram is one of the seven basic tools of quality control.[3]

Contents
[hide]

• 1 Etymology
• 2 Examples
• 3 Activities and demonstrations
• 4 Mathematical definition
o 4.1 Cumulative histogram
o 4.2 Number of bins and width
• 5 See also
• 6 References
• 7 Further reading

• 8 External links

[edit] Etymology

Look up histogram in Wiktionary, the free dictionary.

An example histogram of the heights of 31 Black Cherry trees.

 60

The etymology of the word histogram is uncertain. Sometimes it is said to be derived

from the Greek histos 'anything set upright' (as the masts of a ship, the bar of a loom, or
the vertical bars of a histogram); and gramma 'drawing, record, writing'. It is also said
that Karl Pearson, who introduced the term in 1895, derived the name from "historical
diagram".
[4]

Examples
As an example we consider data collected by the U.S. Census Bureau on time to travel to
work (2000 census, [1], Table 2). The census found that there were 124 million people
who work outside of their homes. An interesting feature of this graph is that the number
recorded for "at least 15 but less than 20 minutes" is higher than for the bands on either
side. This is likely to have arisen from people rounding their reported journey time.[original
research?]
This rounding is a common phenomenon when collecting data from people.

Histogram of travel time, US 2000 census. Area under the curve equals the total number
of cases. This diagram uses Q/width from the table.
Data by absolute numbers
Interval Width Quantity Quantity/width
0 5 4180 836
5 5 13687 2737
10 5 18618 3723
15 5 19634 3926
20 5 17981 3596
25 5 7190 1438
30 5 16369 3273
35 5 3212 642
40 5 4122 824
45 15 9200 613
 61

60 30 6461 215
90 60 3435 57

This histogram shows the number of cases per unit interval so that the height of each bar
is equal to the proportion of total people in the survey who fall into that category. The
area under the curve represents the total number of cases (124 million). This type of
histogram shows absolute numbers.

Histogram of travel time, US 2000 census. Area under the curve equals 1. This diagram
uses Q/total/width from the table.
Data by proportion
Interval Width Quantity (Q) Q/total/width
0 5 4180 0.0067
5 5 13687 0.0221
10 5 18618 0.0300
15 5 19634 0.0316
20 5 17981 0.0290
25 5 7190 0.0116
30 5 16369 0.0264
35 5 3212 0.0052
40 5 4122 0.0066
45 15 9200 0.0049
60 30 6461 0.0017
90 60 3435 0.0005

This histogram differs from the first only in the vertical scale. The height of each bar is
the decimal percentage of the total that each category represents, and the total area of all
the bars is equal to 1, the decimal equivalent of 100%. The curve displayed is a simple
density estimate. This version shows proportions, and is also known as a unit area
histogram.
 62

In other words, a histogram represents a frequency distribution by means of rectangles

whose widths represent class intervals and whose areas are proportional to the
corresponding frequencies. The intervals are placed together in order to show that the
data represented by the histogram, while exclusive, is also continuous. (E.g., in a
histogram it is possible to have two connecting intervals of 10.5-20.5 and 20.5-33.5, but
not two connecting intervals of 10.5-20.5 and 22.5-32.5. Empty intervals are represented
as empty and not skipped.)[5]

Activities and demonstrations

The SOCR resource pages contain a number of hands-on interactive activities
demonstrating the concept of a histogram, histogram construction and manipulation using
Java applets and charts.

Mathematical definition

An ordinary and a cumulative histogram of the same data. The data shown is a random
sample of 10,000 points from a normal distribution with a mean of 0 and a standard
deviation of 1.

In a more general mathematical sense, a histogram is a function mi that counts the number
of observations that fall into each of the disjoint categories (known as bins), whereas the
graph of a histogram is merely one way to represent a histogram. Thus, if we let n be the
total number of observations and k be the total number of bins, the histogram mi meets
the following conditions:

Cumulative histogram

A cumulative histogram is a mapping that counts the cumulative number of observations

in all of the bins up to the specified bin. That is, the cumulative histogram Mi of a
histogram mj is defined as:
 63

Number of bins and width

There is no "best" number of bins, and different bin sizes can reveal different features of
the data. Some theoreticians have attempted to determine an optimal number of bins, but
these methods generally make strong assumptions about the shape of the distribution.
You should always experiment with bin widths before choosing one (or more) that
illustrate the salient features in your data. A good discussion of rules for choice of bin
widths is in Modern Applied Statistics with S, § 5.6: Density Estimation.[6]

The number of bins k can be assigned directly or can be calculated from a suggested bin
width h as:

The braces indicate the ceiling function.

Sturges' formula[7]

which implicitly bases the bin sizes on the range of the data, and can perform poorly
if n < 30.

Scott's choice[8]

where σ is the sample standard deviation.

Square-root choice

which takes the square root of the number of data points in the sample (used by Excel
histograms and many others)

Freedman–Diaconis' choice[9]

which is based on the interquartile range.

 64

Choice based on minimization of an estimated L2 risk function[10]

where and are mean and biased variance of a histogram with bin-width ,
and .

Pareto chart
Pareto chart

One of the Seven Basic Tools of Quality

First described Joseph M. Juran

by

Purpose To assess the most frequently-occurring

defects by category†

A Pareto chart, named after Vilfredo Pareto, is a type of chart that contains both bars
and a line graph, where individual values are represented in descending order by bars,
and the cumulative total is represented by the line.
 65

Simple example of a Pareto chart using hypothetical data showing the relative frequency
of reasons for arriving late at work

The left vertical axis is the frequency of occurrence, but it can alternatively represent cost
or another important unit of measure. The right vertical axis is the cumulative percentage
of the total number of occurrences, total cost, or total of the particular unit of measure.
Because the reasons are in decreasing order, the cumulative function is a concave
function. To take the example above, in order to lower the amount of late arriving by
80%, it is sufficient to solve the first three issues.

The purpose of the Pareto chart is to highlight the most important among a (typically
large) set of factors. In quality control, it often represents the most common sources of
defects, the highest occurring type of defect, or the most frequent reasons for customer
complaints, and so on.

These charts can be generated by simple spreadsheet programs, such as OpenOffice.org

Calc and Microsoft Excel and specialized statistical software tools as well as online
quality charts generators.

The Pareto chart is one of the seven basic tools of quality control.[1]

Scatter plot
 66

Scatter plot

One of the Seven Basic Tools of Quality

First described Francis Galton

by

Purpose To identify the type of relationship (if any)

between two variables

Waiting time between eruptions and the duration of the eruption for the Old Faithful
Geyser in Yellowstone National Park, Wyoming, USA. This chart suggests there are
generally two "types" of eruptions: short-wait-short-duration, and long-wait-long-
duration.
 67

A 3D scatter plot allows for the visualization of multivariate data of up to four

dimensions. The Scatter plot takes multiple scalar variables and uses them for different
axes in phase space. The different variables are combined to form coordinates in the
phase space and they are displayed using glyphs and colored using another scalar
variable.[1]

A scatter plot or scattergraph is a type of mathematical diagram using Cartesian

coordinates to display values for two variables for a set of data.

The data is displayed as a collection of points, each having the value of one variable
determining the position on the horizontal axis and the value of the other variable
determining the position on the vertical axis.[2] This kind of plot is also called a scatter
chart, scatter diagram and scatter graph.

Contents
[hide]

• 1 Overview
• 2 Example
• 3 See also
• 4 References

• 5 External links

Overview
A scatter plot is used when a variable exists that is under the control of the experimenter.
If a parameter exists that is systematically incremented and/or decremented by the other,
it is called the control parameter or independent variable and is customarily plotted along
the horizontal axis. The measured or dependent variable is customarily plotted along the
vertical axis. If no dependent variable exists, either type of variable can be plotted on
 68

either axis and a scatter plot will illustrate only the degree of correlation (not causation)
between two variables.

A scatter plot can suggest various kinds of correlations between variables with a certain
confidence interval. Correlations may be positive (rising), negative (falling), or null
(uncorrelated). If the pattern of dots slopes from lower left to upper right, it suggests a
positive correlation between the variables being studied. If the pattern of dots slopes from
upper left to lower right, it suggests a negative correlation. A line of best fit (alternatively
called 'trendline') can be drawn in order to study the correlation between the variables. An
equation for the correlation between the variables can be determined by established best-
fit procedures. For a linear correlation, the best-fit procedure is known as linear
regression and is guaranteed to generate a correct solution in a finite time. Unfortunately,
no universal best-fit procedure is guaranteed to generate a correct solution for arbitrary
relationships.

One of the most powerful aspects of a scatter plot, however, is its ability to show
nonlinear relationships between variables. Furthermore, if the data is represented by a
mixture model of simple relationships, these relationships will be visually evident as
superimposed patterns.

The scatter diagram is one of the basic tools of quality control.[3]

Example
For example, to display values for "lung capacity" (first variable) and how long that
person could hold his breath, a researcher would choose a group of people to study, then
measure each one's lung capacity (first variable) and how long that person could hold his
breath (second variable). The researcher would then plot the data in a scatter plot,
assigning "lung capacity" to the horizontal axis, and "time holding breath" to the vertical
axis.

A person with a lung capacity of 400 ml who held his breath for 21.7 seconds would be
represented by a single dot on the scatter plot at the point (400, 21.7) in the Cartesian
coordinates. The scatter plot of all the people in the study would enable the researcher to
obtain a visual comparison of the two variables in the data set, and will help to determine
what kind of relationship there might be between the two variables.

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v•d•e
Statistics

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Descriptive statistics

Continuous data LocationMean (Arithmetic, Geometric, Harmonic) · Median ·

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Mode

Range · Standard deviation · Coefficient of variation ·

Dispersion
Percentile · Interquartile range

ShapeVariance · Skewness · Kurtosis · Moments · L-moments

Count dataIndex of dispersion

Summary tablesGrouped data · Frequency distribution · Contingency table

Pearson product-moment correlation · Rank correlation (Spearman's

Dependence
rho, Kendall's tau) · Partial correlation · Scatter plot

Bar chart · Biplot · Box plot · Control chart · Correlogram · Forest

Statistical graphicsplot · Histogram · Q-Q plot · Run chart · Scatter plot · Stemplot ·
Radar chart

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Data collection

Effect size · Standard error · Statistical power · Sample size

Designing studies
determination

Survey methodologySampling · Stratified sampling · Opinion poll · Questionnaire

Design of experiments · Randomized experiment · Random

Controlled experimentassignment · Replication · Blocking · Regression discontinuity ·
Optimal design

Uncontrolled studiesNatural experiment · Quasi-experiment · Observational study

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Statistical inference

Prior · Posterior · Credible interval · Bayes factor · Bayesian

Bayesian inference
estimator · Maximum posterior estimator

Confidence interval · Hypothesis testing · Sampling distribution ·

Classical inference
Meta-analysis

Specific testsZ-test (normal) · Student's t-test · F-test · Chi-square test · Pearson's

chi-square · Wald test · Mann–Whitney U · Shapiro–Wilk · Signed-
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rank

Mean-unbiased · Median-unbiased · Maximum likelihood · Method

General
of moments · Minimum distance · Maximum spacing · Density
estimation
estimation

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Correlation and regression analysis

Pearson product-moment correlation · Partial correlation ·

Correlation
Confounding variable · Coefficient of determination

Simple linear regression · Ordinary least squares · General

Linear regression
linear model · Analysis of variance · Analysis of covariance

Nonlinear regression · Nonparametric · Semiparametric ·

Non-standard predictors
Isotonic · Robust

Exponential families · Logistic (Bernoulli) · Binomial ·

Generalized linear model
Poisson

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Data analyses and models for other specific data types

Multivariate regression · Principal components · Factor analysis ·

Multivariate statistics
Cluster analysis · Copulas

Decomposition · Trend estimation · Box–Jenkins · ARMA

Time series analysis
models · Spectral density estimation

Survival function · Kaplan–Meier · Logrank test · Failure rate ·

Survival analysis
Proportional hazards models · Accelerated failure time model

Categorical dataMcNemar's test · Cohen's kappa

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Applications

Environmental statisticsGeostatistics · Climatology

Medical statisticsEpidemiology · Clinical trial · Clinical study design

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Actuarial science · Population · Demography · Census ·

Social statistics
Psychometrics · Official statistics · Crime statistics

Category · Portal · Outline · Index

Stratified sampling
In statistics, stratified sampling is a method of sampling from a population.

When sub-populations vary considerably, it is advantageous to sample each

subpopulation (stratum) independently. Stratification is the process of grouping
members of the population into relatively homogeneous subgroups before sampling. The
strata should be mutually exclusive: every element in the population must be assigned to
only one stratum. The strata should also be collectively exhaustive: no population
element can be excluded. Then random or systematic sampling is applied within each
stratum. This often improves the representativeness of the sample by reducing sampling
error. It can produce a weighted mean that has less variability than the arithmetic mean of
a simple random sample of the population.

Contents
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• 1 Stratified sampling strategies

• 2 Disadvantages
• 3 Practical example
• 4 References

• 5 See also

Stratified sampling strategies

1. Proportionate allocation uses a sampling fraction in each of the strata that is
proportional to that of the total population. If the population consists of 60% in
the male stratum and 40% in the female stratum, then the relative size of the two
samples (three males, two females) should reflect this proportion.
2. Optimum allocation (or Disproportionate allocation) - Each stratum is
proportionate to the standard deviation of the distribution of the variable. Larger
samples are taken in the strata with the greatest variability to generate the least
possible sampling variance.
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A real-world example of using stratified sampling would be for a political survey. If the
respondents needed to reflect the diversity of the population, the researcher would
specifically seek to include participants of various minority groups such as race or
religion, based on their proportionality to the total population as mentioned above. A
stratified survey could thus claim to be more representative of the population than a
survey of simple random sampling or systematic sampling.

Similarly, if population density varies greatly within a region, stratified sampling will
ensure that estimates can be made with equal accuracy in different parts of the region,
and that comparisons of sub-regions can be made with equal statistical power. For
example, in Ontario a survey taken throughout the province might use a larger sampling
fraction in the less populated north, since the disparity in population between north and
south is so great that a sampling fraction based on the provincial sample as a whole might
result in the collection of only a handful of data from the north.

Randomized stratification can also be used to improve population representativeness in a

study.

Disadvantages
It is not useful when there are no similar subgroups. It cannot be used when amount of
data in subgroups is not equal but total data in a subgroup are of equal importance as it
gives more importance to subgroups with more data.

Practical example
In general the size of the sample in each stratum is taken in proportion to the size of the
stratum. This is called proportional allocation. Suppose that in a company there are the
following staff:

• male, full time: 90

• male, part time: 18
• female, full time: 9
• female, part time: 63
• Total: 180

and we are asked to take a sample of 40 staff, stratified according to the above categories.

The first step is to find the total number of staff (180) and calculate the percentage in
each group.

• % male, full time = (90 / 180) x 100 = 50

• % male, part time = ( 18 / 180 ) x100 = 10
• % female, full time = (9 / 180 ) x 100 = 5
• % female, part time = (63 / 180) x 100 = 35
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This tells us that of our sample of 40,

• 50% should be male, full time.

• 10% should be male, part time.
• 5% should be female, full time.
• 35% should be female, part time.

• 50% of 40 is 20.
• 10% of 40 is 4.
• 5% of 40 is 2.
• 35% of 40 is 14.

Another easy way without having to calculate the percentage is to multiply the group
number by the sample size and divide by the total amount:

• male, full time = (90 x 40) / 180 = 20

• male, part time = (18 x 40) / 180 = 4
• female, full time = (9 x 40) / 180 = 2
• female, part time = (63 x 40) / 180 = 14
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