Introduction to the Red Beads Experiment

1. Introduction to the Red Beads Experiment • Context for Dr. Deming – S.O.P.K. • Instruction for the Red Beads

2. Deming’s System of Profound Knowledge • It is necessary for members of management to become competent in four knowledge areas to be effective and successful leaders: • Theory of Variation • Appreciation for a System • Theory of Knowledge • Psychology The Red Beads can teach us lessons about all four.

3. Instructions for Conducting the Red Beads Experiment • Personnel: • Six willing workers • Two Inspectors • Chief Inspector • Recorder • Detailed instructions will be provided by Dr. Deming’s stand-in

4. Data Collection Day

5. Conduct the Experiment • Instructions and Commentary • Record Data and Plot the points • Listen, think, and learn

6. RED BEADS EXPERIMENT RESULTS Interpretation of chart The process exhibits good statistical control. This conclusion is based on intimate knowledge of the procedures prescribed and followed by the six Willing Workers, as well as on study of the chart. This is an example of a constant cause system. There is no evidence that one Willing Worker will in the future be better than any other. Difference between Willing Workers and between days are attributable to variation inherent in the system, common causes. The Willing Workers have put into the job all that they have to offer. One way to decrease the proportion red in the product is to reduce the proportion of red beads in the incoming material (management’s responsibility). The control limits may be extended into the future as prediction of the limits of variation to expect from continuation of the same process. Inspector: JIM Recorder: COLLEEN JOE Inspector General: LORI 252 6 X 4 Record of the number of defective items by Willing Workers, per day. Lot size 50, each Willing Worker per day. X = ---------------- = 10.5 DAY Willing Workers 252 6 X 4 X 50 P = ---------------- = .21 ZD 3 ALL 4 2 4 5 1 RICH RANDY JERRY CINDA MIKE MARK ALL 6 Cum x 8 13 6 15 8 16 66 12 7 8 9 10 14 60 12 16 13 9 11 8 69 10 12 13 8 7 7 57 42 48 40 41 36 45 252 11 10 8 13 13 4 59 UCL LCL = X 3 X ( 1 - p ) + _ = 10.5 3 10.5 X .79 + _ UCL 19.14 19 = UCL LCL 1.86 2 = LCL = BRIAN MIMI Wooden beads Census count, one by one Total 4000 Red 800 White 3200 Paddle No. 4 11 10.5 10.8 10.5 -- -- The chart at the left is for Nashville, 14 November 1990. The control limits therefor, extended, predict the range of variation to be expected in the future. The present experiment is an example of the future. DAY 1 DAY 2 DAY 3 DAY 4 DAY 1 DAY 2 DAY 3 DAY 4 UCL, 19 UCL, 18 WARREN, MI 15 JULY 1992 NASHVILLE, 14 NOV. 1990 LCL, 2 LCL, 1 RAM\REDBEAD.PPT

7. Lessons of the Red Beads The system turned out to be stable - variation in results exhibited good statistical control - indicating a system of common causes - this conclusion is based on intimate knowledge of the procedures, not just the chart - a basis for rational prediction is provided since the variation is stable

8. Lessons of the Red Beads • There is no evidence that any of the willing workers will be better than any other in the future • The willing workers had put into the job all that they had to offer • The ranking of willing workers was really just ranking the effects of the system on the results • Pay for performance was reaction to past results - it did not, and would not have improved nor predicted future performance

9. Lessons of the Red Beads • The futility of a goal of no more than3 red beads - outside the bounds of the system • The procedures were rigid; the workers had no chance to make suggestions for improvement • How might the proportion of red beads in the product be decreased?

10. Lessons of the Red Beads • For a process judged to be stable the control limits may be extended into the future as a prediction of the limits of variation to be expected from continuation of the same process • Warren, July 22, 1992 was future to Nashville, November 14, 1990 • What would we mean by continuation of the same process? • How could the price of white beads have been set without knowledge of stability and capability of the system?

11. Lessons of the Red Beads • What is meant by the number of red or white beads in the incoming supply? • Suppose we continued with a stable system, one in a state of statistical control, x for the product will settle down to a number - what might that be?

12. Lessons of the Red Beads • Random and mechanical sampling

13. Lessons of the Red Beads • Day 1 to day 2 Jay went from 7 to 12 red beads - “The raise went to his head - a merit increase in pay and he got careless” • At the end of day 2 Carol gets a second merit increase in pay - “She deserves it - pays attention to business” • Day 2 to day 3 Carol went from 4 to 8 red beads - “Ah, she got careless, the raise went to her head” • Day 3 to day 4 Toya went from 17 to 7 red beads - “Put her on probation, she decided to pay attention to her work”

14. Lessons of the Red Beads • These are post-observation explanations - do they permit us to assess the consequences of putting people on probation and giving merit raises? • Is there anything wrong with the logic that since Carol got 4 on day 2 - “If Carol can make 4, anybody can make 4”? Can you think of examples where performance measures were compared resulting in a conclusion that the best observed performance ought to be the standard?