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INDUSTRIAL STATISTICS
INDUSTRIAL STATISTICS
Practical Methods and Guidance for
Improved Performance

ANAND M. JOGLEKAR
Joglekar Associates
Plymouth, Minnesota
Copyright  2010 by John Wiley & Sons, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any
form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise,
except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either
the prior written permission of the Publisher, or authorization through payment of the appropriate
per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923,
978-750-8400, fax 978-750-4470, or on the web at www.copyright.com. Requests to the Publisher
for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc.,
111 River Street, Hoboken, NJ 07030, 201-748-6011, fax 201-748-6008, or online at
http://www.wiley.com/go/ permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in
preparing this book, they make no representations or warranties with respect to the accuracy or
completeness of the contents of this book and specifically disclaim any implied warranties of
merchantability or fitness for a particular purpose. No warranty may be created or extended by sales
representatives or written sales materials. The advice and strategies contained herein may not be
suitable for your situation. You should consult with a professional where appropriate. Neither the
publisher nor author shall be liable for any loss of profit or any other commercial damages, including
but not limited to special, incidental, consequential, or other damages.

For general information on our other products and services, or technical support, please contact our
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web site at www.wiley.com

Library of Congress Cataloging-in-Publication Data:

Joglekar, Anand M.
Industrial statistics : practical methods and guidance for improved
performance / Anand M. Joglekar.
p. cm.
Includes bibliography references and index.
ISBN 978-0-470-49716-6 (cloth)
1. Process control–Satistical methods. 2. Quality control–Statistical
methods. 3. Experimental design. I. Title.
TS156.8.J62 2010
658.5072’7–dc22
2009034001
Printed in the United States of America
10 9 8 7 6 5 4 3 2 1
To the memory of my parents
and to Chhaya and Arvind
The following age-old advice deals with robust design and continuous improvement
at the personal level.

You have control over your actions, but not on their fruits.
You should never engage in action for the sake of reward,
nor should you long for inaction.
Perform actions in this world abandoning attachments
and alike in success or failure,
for yoga is perfect evenness of mind.

– Bhagavad Gita 2.47–48

Mahatma Gandhi encapsulates the central message of Gita in one phrase: nishkama
karma, selfless action, work free from selfish desires. Desire is the fuel of life; without
desire nothing can be achieved. Kama, in this context, is selfish desire, the compulsive
craving for personal satisfaction at any cost. Nishkama is selfless desire. Karma means
action. Gita counsels—work hard in the world without any selfish attachment and with
evenness of mind.
Mahatma Gandhi explains—By detachment I mean that you must not worry
whether the desired result follows from your action or not, so long as your motive
is pure, your means correct. It means that things will come right in the end if you take
care of the means. But renunciation of fruit in no way means indifference to results. In
regard to every action one must know the result that is expected to follow, the means
thereto and the capacity for it. He who, being so equipped, is without selfish desire for
the result and is yet wholly engrossed in the due fulfillment of the task before him, is
said to have renounced the fruits of his action. Only a person who is utterly detached
and utterly dedicated is free to enjoy life. Renounce and enjoy!

– Adapted from Bhagavad Gita by Eknath Easwaran

CONTENTS

PREFACE xi

1. BASIC STATISTICS: HOW TO REDUCE FINANCIAL RISK? 1

1.1. Capital Market Returns / 2
1.2. Sample Statistics / 5
1.3. Population Parameters / 9
1.4. Confidence Intervals and Sample Sizes / 13
1.5. Correlation / 16
1.6. Portfolio Optimization / 18
1.7. Questions to Ask / 24

2. WHY NOT TO DO THE USUAL t-TEST AND WHAT TO

REPLACE IT WITH? 27
2.1. What is a t-Test and what is Wrong with It? / 29
2.2. Confidence Interval is Better Than a t-Test / 32
2.3. How Much Data to Collect? / 35
2.4. Reducing Sample Size / 39
2.5. Paired Comparison / 41
2.6. Comparing Two Standard Deviations / 44

vii
viii CONTENTS

2.7. Recommended Design and Analysis Procedure / 46

2.8. Questions to Ask / 46

3. DESIGN OF EXPERIMENTS: IS IT NOT GOING TO COST

TOO MUCH AND TAKE TOO LONG? 48
3.1. Why Design Experiments? / 49
3.2. Factorial Designs / 53
3.3. Success Factors / 59
3.4. Fractional Factorial Designs / 63
3.5. Plackett–Burman Designs / 66
3.6. Applications / 67
3.7. Optimization Designs / 71
3.8. Questions to Ask / 75

4. WHAT IS THE KEY TO DESIGNING ROBUST PRODUCTS

AND PROCESSES? 77
4.1. The Key to Robustness / 78
4.2. Robust Design Method / 83
4.3. Signal-to-Noise Ratios / 87
4.4. Achieving Additivity / 89
4.5. Alternate Analysis Procedure / 92
4.6. Implications for R&D / 98
4.7. Questions to Ask / 100

5. SETTING SPECIFICATIONS: ARBITRARY OR IS THERE

A METHOD TO IT? 101
5.1. Understanding Specifications / 103
5.2. Empirical Approach / 106
5.3. Functional Approach / 107
5.4. Minimum Life Cycle Cost Approach / 114
5.5. Questions to Ask / 119

6. HOW TO DESIGN PRACTICAL ACCEPTANCE SAMPLING

PLANS AND PROCESS VALIDATION STUDIES? 121
6.1. Single-Sample Attribute Plans / 123
6.2. Selecting AQL and RQL / 129
 CONTENTS ix

6.3. Other Acceptance Sampling Plans / 133

6.4. Designing Validation Studies / 135
6.5. Questions to Ask / 136

7. MANAGING AND IMPROVING PROCESSES: HOW TO

USE AN AT-A-GLANCE-DISPLAY? 138
7.1. Statistical Logic of Control Limits / 139
7.2. Selecting Subgroup Size / 145
7.3. Selecting Sampling Interval / 147
7.4. Out-of-Control Rules / 150
7.5. Process Capability and Performance Indices / 151
7.6. At-A-Glance-Display / 155
7.7. Questions to Ask / 157

8. HOW TO FIND CAUSES OF VARIATION BY JUST

LOOKING SYSTEMATICALLY? 159
8.1. Manufacturing Application / 161
8.2. Variance Components Analysis / 164
8.3. Planning for Quality Improvement / 166
8.4. Structured Studies / 168
8.5. Questions to Ask / 172

9. IS MY MEASUREMENT SYSTEM ACCEPTABLE AND

HOW TO DESIGN, VALIDATE, AND IMPROVE IT? 174
9.1. Acceptance Criteria / 175
9.2. Designing Cost-Effective Sampling Schemes / 178
9.3. Designing a Robust Measurement System / 180
9.4. Measurement System Validation / 183
9.5. Repeatability and Reproducibility (R&R) Study / 185
9.6. Questions to Ask / 188

10. HOW TO USE THEORY EFFECTIVELY? 190

10.1. Empirical Models / 192
10.2. Mechanistic Models / 197
10.3. Mechanistic Model for Coat Weight CV / 201
10.4. Questions to Ask / 205
x CONTENTS

11. QUESTIONS AND ANSWERS 207

11.1. Questions / 208
11.2. Answers / 232

APPENDIX: TABLES 251

REFERENCES 259
INDEX 261
PREFACE

This book is based upon over 25 years of teaching and consulting experience
implementing statistical methods in a large number of companies in industries as
diverse as automotive, biotechnology, computer, chemical, defense, food, medical
device, packaging, pharmaceutical, and semiconductor among many others. The
consulting assignments have resulted in many success stories—large cost reductions,
rapid product development, regaining lost markets, dramatic reductions in variability,
and troubleshooting manufacturing. Over ten thousand participants have attended my
seminars on statistical methods. All these interactions—the technical problems the
participants brought forward, the prior statistical knowledge they had, and the
questions they asked—have shaped the writing of this book.
Much of the technical work in industry relies upon the coupling of known scientific
and engineering knowledge with new knowledge gained through active experiments
and passive observations. Accelerating this data-based learning process to develop
high-quality, low-cost products and bringing products to market rapidly are key
objectives in industry. The fact that statistical methods are a necessary ingredient in
accomplishing these objectives is as true today, if not more so, as it was 25 years ago.
The use of statistical methods by all technical individuals in industry, which number in
the millions, continues to be an important need.
Four major changes have occurred during the past several years that have
influenced the writing of this book:

1. With the advent of personal computers and statistical software, the need to
understand statistical computations, in the detail necessary for hand calcula-
tions, has reduced dramatically. Today, the job of number crunching can and is
delegated to a software package. The statistical computations described in great

xi
xii PREFACE

detail in various textbooks on statistics are interesting to know but their mastery
is no longer necessary to make good applications. This means that the focus has
to be on explaining concepts and logic, practical guidance on the correct use of
statistical methods, interpretation of results, and examples to demonstrate how
to use the methods effectively.
2. As a result of the various iterations of quality approaches—TQM, BPM,
Process Reengineering, Six Sigma—there is a greater awareness and focus
on the use of statistical methods even in industries where such use was almost
nonexistent a short time ago. People are more familiar with statistical methods
than they were years ago. This means that a certain degree of statistical
knowledge on the part of the audience can be presumed. I have based the
knowledge that can be presumed on my experience with the audience.
3. International competition and the need for much higher productivity have
resulted in increased workload for technical individuals. There is less time to do
more work in! This means that information needs to be presented compactly
and in a focused manner dealing with only those issues that are of the highest
practical importance. The book needs to be concise and to the point.
4. Managers and black belts are now responsible to promote and implement
statistical methods in a company, a job that previously was being done almost
exclusively by statisticians. Managers and black belts have various degrees of
statistics knowledge but they are not full-fledged statisticians. They need help
to implement statistical methods. The book needs to include guidance on
implementation.

This book is specially written for the technical professionals in all industries.
This audience includes scientists, engineers, and other technical personnel in R&D
and manufacturing, quality professionals, analytical chemists, and technical man-
agers in industry—supervisors, managers, directors, vice presidents, and other
technical leaders. Most of this audience is engaged in research, product design,
process design, and manufacturing, either directly or in support roles. A significant
portion of their job is to make decisions based upon data. To do this well, they need
to understand and use the statistical methods. This book provides them with the
main concepts behind each of the selected statistical method, examples of how to
use these methods, and practical guidance on how to correctly implement the
methods. It also includes an extensive chapter on questions and answers for the
reader to practice with. The material is presented in a compact, easy-to-read
format, minimizing the mathematical details that can be delegated to a computer
unless mathematical presentation illuminates the concepts. Most of this audience
has access to some statistical software package (software 2009). Many are not
interested in the details of statistical computations. For those who are so inclined,
this book provides recommendations for further reading. Many in this audience
such as technical managers, technical leaders, and black belts also have the
responsibility to help guide the implementation of the statistical methods. This
book identifies questions they should ask to help accomplish this objective.
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