Competitive innovation and improvement : statistical design and control

228 Pages·2015·1.872 MB·English

by  Kieron A Dey

Business & Management / Quality & Six Sigma Dey
Competitive Innovation
and Improvement
“Pathbreaking.”
C
—Dr. Randy Brown, Director of Health Research, Mathematica Policy Competitive
o
Research, Inc.
m
“Work that is way ahead of others … interesting and energetic writing ...
a lot of hands-on as well as technical wisdom—a very rare combination. p
The material is new, challenging, and important.” Innovation
e
—Dr. Brian L. Joiner, Minitab Co-Inventor, Former Professor of Statistics, t
i
University of Wisconsin, Madison t
i
“A wonderful book with unique insights into an area of enormous v and
potential. ... Writing style makes it easy to follow ... .” e
Improvement
—Dr. Steve Grady, Consulting Econometrician I
n
“The concept is simple (it makes you wonder why others haven’t tried it).
n
The large scale is unique ... not discussed in current literature.”
o
—Tim Baer, Principal Statistician, Roche Diagnostics
v
Competitive Innovation and Improvement: Statistical Design and a
Statistical Design and Control
Control explains how to combine two widely known statistical meth- t
ods—statistical design and statistical control—in a manner that can solve i
o
any business, government, or research problem quickly with sustained
n
results. Because the problem-solving strategy employed is pure scientific
method, it makes integration into any existing problem-solving or research
a
method quite simple. n
d
The material in the book is presented in a manner that anyone can read
I
and immediately put to use, including executives, managers, statisticians, m
scientists, engineers, researchers, and all of their supervisors and employees.
p
Organizations can apply the concepts discussed with existing staff to release
latent energy rather than adding to their workload. Optional footnotes provide r
o
the opportunity for more advanced technical insight. Kie ron Dey
v
Supplying readers with an understanding of orthogonal design, the book e
illustrates key ideas through large-scale case studies. The book’s 12 case m
studies examine the coupling of statistical design with economic control
across a range of industries and problem types. e
n
The book suggests the real world, rather than mathematics alone, reveal how
things work and how to make them work better. t
K22951
ISBN: 978-1-4822-3343-8
90000
9 781482 233438

Competitive
Innovation
and
Improvement
Statistical Design and Control

Competitive
Innovation
and
Improvement
Statistical Design and Control
K i e r o n D e y
Boca Raton London New York
CRC Press is an imprint of the
Taylor & Francis Group, an informa business
A PRODUCTIV ITY PRESS BOOK
CRC Press
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© 2015 by Kieron Dey
CRC Press is an imprint of Taylor & Francis Group, an Informa business
No claim to original U.S. Government works
Version Date: 20140729
International Standard Book Number-13: 978-1-4822-3344-5 (eBook - PDF)
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Contents
Preface ....................................................................................................ix
Acknowledgments .................................................................................xi
Chapter 1 Simplicity of Statistical Design and Control ....................1
1.1 Making a Start ...................................................................1
1.2 How Does It Work? ..........................................................2
1.3 Care Management Case: Improving Health for
Thousands of People .........................................................6
1.4 Discovery ...........................................................................7
1.5 Measurement Quality ....................................................11
1.6 Care Management Statistical Design ...........................13
1.7 Baseline Data ...................................................................15
1.8 Managing the Test ..........................................................17
1.9 Test Results ......................................................................19
1.10 Exploratory Analysis ......................................................19
1.11 What Might the Results Mean? ....................................23
1.12 Findings Are Often Surprising .....................................24
1.13 Significance of the Results .............................................26
1.14 Implementation ..............................................................28
1.15 Implementation Troubleshooting................................30
Chapter 2 Designed Innovation ........................................................37
2.1 Innovation Uses More Right Brain than Left .............37
2.2 Retailing Case: New Product Sales...............................37
2.3 Discovery .........................................................................38
2.4 Measurement Quality ...................................................40
2.5 Preparing for the Test ....................................................40
2.6 Retail Furniture Statistical Design and Its
Management ...................................................................43
2.7 Exploratory Analysis and Inference ............................48
2.8 What Might the Results Mean? ....................................51
2.9 Statistical Significance ..................................................56
2.10 Ironing Out Some Possible Wrinkles .........................60
v
vi • Contents
2.11 Predicting and Delivering the Improvement ..............61
2.12 Retailing Designed Innovation Case: Conclusion .....63
Chapter 3 Statistical Control ............................................................65
3.1 Using Statistical Control ................................................65
3.2 Economic Advantage ....................................................66
3.3 Derivation ........................................................................67
3.4 Practical Use of Statistical Control ..............................69
3.5 Digression into Causality ..............................................70
3.6 Concluding Scientific Work in the Care
Management Case ..........................................................72
3.7 False Alarm Rate Is Neither Known Nor Useful
in Statistical Control ......................................................75
3.8 Statistical Control Terminology ...................................76
3.9 Statistics Breaks Down in Unstable Processes ...........76
3.10 Economic Loss without Statistical Control .................78
3.11 Cost Explosion Story Unexploded ...............................79
3.12 Tests for Statistical Control ..........................................84
3.13 Statistical Control Integrated with Statistical
Design ..............................................................................86
3.14 Managing Statistical Control Schemes .......................86
3.15 Mechanics of Statistical Control...................................87
3.16 Where Did Statistical Control Originate? ...................87
Chapter 4 Measurement Error and Control. ....................................91
4.1 All Measurement Systems Are Inherently Flawed .....91
4.2 Clinical Care Case: Initial Measurement Study
and Long- Term Controls ...............................................93
4.3 Establishing a Measurement Control Scheme ............97
Chapter 5 Statistical Design ............................................................105
5.1 Advantages of Large Statistical Design......................105
5.2 Two- Level Designs ........................................................106
5.3 Full Factorial Designs ..................................................106
5.4 Fractional Factorial Designs .......................................108
5.5 Backpacking Case .........................................................109
5.6 Discovery .......................................................................109
Contents • vii
5.7 Managing the Test ........................................................109
5.8 Measurement Quality ..................................................110
5.9 Exploratory Analysis ....................................................111
5.10 What Might the Initial Results Mean? ......................112
5.11 Exploring Interactions .................................................113
5.12 Simpler Analysis ...........................................................115
5.13 Statistical Significance .................................................115
5.14 Solving the Puzzle .........................................................117
5.15 Aliasing ..........................................................................117
5.16 Analysis of All Pair Interactions ................................118
5.17 Measurement Problem Found and Fixed after
the Test ..........................................................................120
5.18 Using Sales Change as the Test’s Measurement ......120
5.19 Calculating Precision and Sample Size Before
the Test ..........................................................................122
5.20 Diagnosing Unusually High or Low Results in a
Statistical Design Row .................................................123
5.21 Guidance on Fractional Factorial Designs ...............124
5.22 Multifactorial Designs ................................................124
5.23 Care Management Case: More Analytical Insight ...125
5.24 Randomization .............................................................126
5.25 Milk Story ......................................................................127
5.26 Soil Story .......................................................................128
5.27 Geometric versus Nongeometric Designs .................129
5.28 Aliasing Scheme for the Care Management Design ....130
5.29 Augmenting Multifactorials to Also Estimate
Pair Interactions ...........................................................130
5.30 Testing Strategy .............................................................132
5.31 Uniqueness and Stumbling Around ..........................132
5.32 Where Did Statistical Design Originate? ..................133
Chapter 6 Statistical Design and Control: A Dozen Large-
Scale Case Studies ..........................................................135
6.1 Selection of Cases..........................................................135
Chapter 7 Simultaneous Design .....................................................161
7.1 Solving Complex Problems Simply ............................161
7.2 Simultaneous Design Idea ...........................................162
viii • Contents
7.3 Science Education Case................................................163
7.4 Discovery .......................................................................164
7.5 Baseline Data .................................................................165
7.6 Simultaneous Statistical Designs for Science
Classes ............................................................................166
7.7 Pair Interactions across Designs and an Easier
Analysis ..........................................................................174
7.8 Findings..........................................................................175
7.9 Rules for Simultaneous Designs .................................176
7.10 General Multichannel Optimization Case ................176
7.11 Simultaneous Design Procedure ................................178
Chapter 8 Scientific Method, Randomization, and
Improvement Strategies .................................................181
8.1 Simplicity of the Scientific Method ............................181
8.2 Scientific Method with Statistical Design and
Control ...........................................................................182
8.3 Randomization Distribution .......................................183
8.4 Randomization Device ................................................185
8.5 Proof Isn’t in the Pudding ...........................................188
8.6 What Science Lies beneath Implementation
Being the Hardest Part? ...............................................189
8.7 Common Improvement Strategies .............................192
8.8 Randomized Control Trials (RCT) ............................192
8.9 Statistical Design and Control Are for Real
Problems with Everyone Contributing ......................193
Chapter 9 Managing Improvement and Innovation .....................195
9.1 Organization .................................................................195
9.2 Speed without Net Resources ......................................196
9.3 How to Manage Specific Improvements/
Innovations ....................................................................196
9.4 Statistical Design and Control Summary .................198
Appendix: Answers to Exercises. .......................................................201
References. ...........................................................................................209
About the Author. ...............................................................................219