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Beta risk, statistically speaking, is the risk associated with accepting a null hypothesis when it is actually false. In other words, beta risk is a false negative in which a product is said to be free of defects when it actually has one. Beta risk is also known as a Read more…
Alpha risk is, in statistical terms, the chance of rejecting the null hypothesis when it is, in fact, true. In other words, it is a false positive (i.e. a good part is identified as a defect). This risk is also known as a Type-I risk, or producer’s risk. See Also: Read more…
The acceptance number is the highest number of nonconforming items that can be found in a sample for a lot to still be considered acceptable. This number is determined by statistical analysis and is based on the required quality level, lot size, and sample size. The underlying premise of using Read more…
The “5Ps of Effective Meetings” is a simple memory device to help you, not surprisingly, run more effective meetings. Because of the rising complexity of business operations, problems increasingly require a collaborative solution. Those collaborative solutions tend to require meetings. Unfortunately, this increased demand for meetings also tends to increase Read more…
Continuous data can have any value within a given range. Compare this to discrete data which is limited in the values it takes. For example, the number of dots on a pair of dice or the number of wheels on a car limit you to a finite set of values. Read more…
CRM stands for customer relationship management. It essentially is the practice of taking an active approach to understanding how a company interacts with its customers and creating a strategy to manage that relationship for both current and future customers. In practice, CRM is typically used to describe software systems, of Read more…
“Genchi genbutsu” is a Japanese term that loosely translates to “go and see”. Essentially, it means to go to the actual spot where actual work is happening on the actual product to confirm your conclusions. Similar to the term “go to gemba“, the spirit of genchi genbutsu is to avoid Read more…
PDSA stands for Plan-Do-Study-Act, or less commonly, Plan-Do-Study-Adjust. It is a structured, iterative problem-solving approach popularized by W. Edwards Deming, who originally was mentored on the process by Walter Shewhart. With that origin in mind, it should come as no surprise that this method is also known as the Deming Read more…
Little’s Law is a basic mathematics equation for calculating lead time. In the layman’s version, it says: Lead time = Number of units in WIP / Average Production Rate Let’s say you had 34 items in work-in-process, and you produce 10 per day. That means that it will take any Read more…
Indirect costs are those expenses that are not directly attributable to a single cost center or cost object (product line, service, etc.) Indirect costs may include shared resources or overhead. Administrative costs, website costs, IT infrastructure, and similar expenses fall into this category. One of the big challenges with indirect Read more…
FISH, or “First In, Still Here” is a tongue-in-cheek term for excessive inventory. It is a play on the terms FIFO (first in, first out) and LIFO (last in, first out).
A Master Black Belt is an individual who has been certified to train other black belts. Black belts are the trainers and continuous improvement team coaches for a company. Having a Master Black Belt is a credential. It is not a job title. Many who attain that level do, however, Read more…