mark graban shs 2014: two data points are not a trend: using spc to manage better

Two Data Points Are Not a Trend: Using SPC to Manage Better

Mark GrabanVP of Innovation & Improvement Services, KaiNexus

#shs2014 @MarkGraban

Slides & Audio: www.MarkGraban.com/SHS2014

Key Management Questions

• How are we performing?– Are we getting better or worse?

• What action should we take?

Some rights reserved by Marco Bellucci

Or Not Take Action“Management must understand the

theory of variation: If you don’t understand variation and how it comes from the system itself, you can only react to every figure.

The result is you often overcompensate, when it would have been better to just leave things alone.”

W. Edwards Deming

My Most Favorite Book Ever

http://www.spcpress.com/Amazon: http://bit.ly/wheeler-book

Donald J. Wheeler, PhD

“No data have meaning apart from their context”

Comparisons of 2 Data Points

1992 1995 1998 2001 2004 2007 20100

0.20.40.60.8

11.21.41.61.8

2

Fatalities per 100 Million Vehicle Miles Traveled (U.S. & CT)

U.S.

CT

Need to Look for Trends

“You don't want to make a big conclusion based on just one year.”

– Jonathan Adkins of the Governors Highway Safety Association

“Office Space”

2-Point Comparisons in Politics

47%46%

44%44%

% im

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emen

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Did We Improve?

Run Charts Show More Context

2 Data Points Lack Context

• Total triage cycle time was reduced by 23 minutes

• Total ED-IP cycle time was reduced by 33 minutes

• Average LOS decreased from 97 to 61 minutes

Source: Case study, “Harris Methodist saves $648,695 through SIPOC process changes”

What About the Other Data Points?“The average patient satisfaction

increased from 87.2 to 89%”

The Good News…

There is a better way:SPC charts

“X” Control Chart(Chart for Individual Values)

“Every system is perfectly designed to get the results it gets.” (Deming)

Goal = 25 minutes

X and MR Chart Combo

Applications of SPC Charts• Monthly employee attrition %• Daily % of patients discharged before 11 am• Daily lab test turnaround times• Weekly patient satisfaction scores• Daily % of on-time case starts• Daily % of patients who arrive late / no-show

Small Business Revenueas a Stable Process?

X chart

MR chart

Deming’s 7 Concepts of Variation1. All variation is caused – specific reasons2. There are 4 types of causes:

1. Common causes 2. Special causes 3. Tampering 4. Structural

3. Managers must distinguish amongst these– Each one requires different managerial actions

Deming’s 7 Concepts of Variation4. For special causes, get timely data5. For common causes, all data are relevant – In-depth knowledge of the process being improved is

needed – statistics, flow charts, Pareto, stratification analysis, DOE

6. When all variation is common cause, the system is said to be “stable” and “predictable”

7. SPC limits let a manager predict future performance with some confidence

3/1/12 3/2/12 3/3/12 3/4/12 3/5/12 3/6/12 3/7/12 3/8/12 3/9/12 3/10/12 3/11/12 3/12/120

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100120140160180

Responding to Daily Changes?

KB

Daily Length of Stay Average

Praise Team

PTPT

Are we helping? Is this process stable?

KBKick Butt

So we should do nothing?

“Don’t just do something, stand there.” -- Deming

Creating a Control Chart

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Upper Control Limit

Lower Control Limit

“Western Electric” Rules (1956)• 8 consecutive points on same side of mean

• 6 consecutive points moving same direction

• 14 alternating up/down points in a row

• Any single point above or below 3-sigma LCL or UCL

– Full rules http://bit.ly/WErules

Step 1: Initial Data – LeanBlog.org• Generally need 20 data

points to calculate control limits

Step 2: Mean & MRs• Calculate mean of the

first 20 points• Calculate the moving

range of the first 20 points– Ex: =ABS(E5-E4)

Step 3: Draw Initial Chart(with Mean line)

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Step 4: Add Control Limits• Calculate “MR-bar”– Average of the 1st 19

MRs• Calculate Control Limits

– LCL = Mean – 3*(MR bar)/1.126– UCL = Mean + 3*(MR bar)/1.126

Step 5: Review Chart & Limits

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Special Cause?

Step 6: Revise Limits

Step 7: Evaluate Over Time

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Step 7: Evaluate Over Time

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Step 8: Shift the Limits

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Testing for Process Shifts• If you made a change that you expected to improve the system,

use a control chart to test the hypothesis

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Process Shift

Daily TAT

Long-Term Process Shifts

NOT Understanding Variation Leads To…

• Pressuring people to get better results by working harder within the same system

• Wasting time looking for explanations of a perceived trend when nothing has changed

• Taking other actions when it would have been better to do nothing

• Not focusing on systemic improvements

Isn’t it always the system?

It’s (almost) always the system.

Q&A / Contact Info• President, Constancy, Inc.

– www.constancy.us• VP of Professional Services, KaiNexus

– www.KaiNexus.com • Founder, LeanBlog.org

– mark@leanblog.org• Twitter @MarkGraban• Books: www.MarkGraban.com

Backup Slides

The Funnel Experiment

• Lloyd Nelson, 1987– Suspend a funnel on a stand a

few inches off the ground– Drop 50 marbles

x

A “Stable” System

• Does NOT mean:– Zero variability– System meets customer

requirements

• It only means:– Causes of variation are basically constant over time

We Have to Try Harder!!!• 4 different rules for adjusting the funnel

No adjustmentAdjust relativeto last position

Adjust relativeto center

Learn more – online simulator at http://www.symphonytech.com/dfunnel.htm