A chi-square test is a statistical tool used to test for independence or dependence (or goodness-of-fit) between random variables taken from different populations. A chi-square test could also be used for testing for goodness between an observed frequency distribution and an expected frequency distribution. With the chi-square test you are comparing a target variance with an observed variance. It is used to test the independence of two nominal variables. Remember that nominal variables are names or categories only.

Common-cause variation is where no one, or combination of factors is unduly affected the process variation (random variation). Special-cause variation is when one or more factors are affecting the process variation in a non-random way. With special-cause variation, one should be able to identify, or put their finger on the reason behind the unexpected variation.

Continuous flow is just that—the flow of value-add never stops. Ideally, a process would continue to add value without ever stopping during the production process.

Use: Lean practitioners should relentlessly strive for continuous flow through the reduction of waste. Any time a process stops, lead time is lengthened, the customer has to wait for the product or service, and it is costing more money than if the flow could be continuous in nature.

Dependence refers to any statistical relationship between two random variables. Correlation refers to any statistical relationship involving dependence. In a correlation study the six sigma practitioner would be looking for a correlation coefficient. The probability runs from -1 to +1. In other words, if two random variables are 100% correlated, the correlation coefficient would be +1 or -1. If there is no correlation, the correlation coefficient would be zero (0).

Control limits are the limits of expected variation of either ‘individuals’ data or sample (subgroup) data. Typically, the acceptable limits of variation equates to what one would expect to see in a random process 99.73% of the time. One way that a six sigma practitioner can determine whether or not they have a ‘smoking gun’ – – meaning that they have unexpected variation, is if a point goes out of control on a control chart. This is to be viewed as an opportunity for improvement.

Critical to quality (CTQ) is the quality of a product or service in the eyes of the voice of the customer (VOC).

Use: It is a good idea to identify the critical to quality parameters as they relate to what is important to the customer at large. It is this author’s opinion that two things should be monitored—1.) the end-product parameters and 2.) And the associated process parameters that determine the quality of the end-product parameters that are important to the customer. Once these parameters are identified, the six sigma practitioner will want to monitor, control, and continuously improve upon these parameters.

A control chart, sometimes referred to as a process behavior chart by the Dr. Donald Wheeler, or Shewhart Charts by some practitioners named after Walter Shewhart. The control chart is meant to separate common cause variation from assignable-cause variation. A control chart is useful in knowing when to act, and when to leave the process alone.

Cycle time (also known as ‘process cycle time’) is the time from the start to the end of the process STEP.

Use: Cycle time is generally value-added time, but not necessarily. There can be some waste within cycle time which needs to be eliminated, or at least reduced. What the lean practitioner will do is add up all of the cycle times found on the value stream map and that sum is compared with the sum of the overall lead time. The ratio between the two tells you how efficient you are and most processes are less than 10 percent efficient. Many processes are even less than one percent efficient. That is not said backwards. Less than 10% of the time most processes are actually adding value.

The data collection plan consists of a nine column tactical plan. 1.      Customer needs and requirements 2.      Type of measure (input, output, or process) 3.   …

Customers have needs and requirements. A customer need establishes the relationship between the organization and the customer (example: I need (or want) an iPad). Requirements are those characteristics that determine whether or not the customer is happy. (Examples: a requirement is that the iPad is user-friendly, has to be fast in data storage and retrieval, etc.)