Understanding Statistical and Practical Significance
What is Statistical significance?
Statistical significance is the probability that the result of a given study could have occurred purely by chance. It reflects the degree to which observed results are true. Hypothesis tests aim to determine if the observed difference is statistically significant.
What is practical significance?
Practical significance evaluates whether the observed difference is large enough to have any practical impact on a process under study. It evaluates the practical use of a study’s outcomes.
A hypothesis test evaluates statistical significance, whereas practical significance evaluates the significance of results considering all practical conditions. It is an inclusive decision for the process owner.
Explain the difference between statistical and practical significance
Statistical significance depends on small population differences and sample sizes, whereas practical significance looks at whether the difference is large enough to be a value in a practical sense.
Sometimes, a hypothesis test can find a claim to be statistically significant. However, a claim may not be worth the effort or expense to implement. Therefore, the organization should always consider practical significance along with statistical significance in a decision-making process. Analysts need to combine engineering judgment with statistical analysis.
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What is Project Closure in Six Sigma
Typically, by describing a project closure, you can identify project completion criteria. This, in turn, helps identify performance improvements and additional opportunities. It is a formal project summation in which the project team can officially close the project. It allows for the quick handover of deliverables and documentation. Inefficiently done, it will reduce the level of project success and incorrectly identify additional opportunities.
What the steps involved in project closure process?
The project closure process involves closing out all project activities after the Control phase of a Six Sigma project and it consists of five steps:
- The process starts with gathering the project team, which consists of all Belts involved in the project. The team updates the relevant records and reports of the various phases of the Six Sigma project. The project team also establishes procedures that help validate and document deliverables and formalize acceptance of those deliverables.
- The Master Black Belt reviews all documents and the project management plan to ensure that all project work is complete, the objectives are met, and the deliverables are achieved.
- The process owner verifies project results by comparing them with customer and stakeholder expectations and requirements and conducts financial audits. The process owner also tracks down the results of the project including process metrics and financial savings.
- Using the project results and the inputs from team members, the Green Belt prepares best practices and lessons learned reports and writes a final report or presentation of the project.
- The process owner officially declares the closure of the project.
Describe the role of closeout meetings in six sigma projects?
Closeout meetings are sessions held during the project closeout process and they involve all the stakeholders of the project. During a closeout meeting, the participants discuss the work and capture lessons learned and the best practices of the Six Sigma implementation. Based on the outcome of the meetings, the process owner will prepare a Six Sigma case study of the project. Closeout meetings typically follow a formal agenda and may require official minutes to be recorded. Not all organizations or projects require closeout meetings. Some organizations require the minutes from closeout meetings to be completed in full, approved by management, and preserved in a specific manner.
How are lessons learned report prepared?
Lessons learned reports are documents that capture salient and helpful information about work done in a project or project phase; they identify both the project team’s strengths and areas for improvement. They can be formal or informal, depending on the organizational norms or requirements. They are compiled for the benefit of future project teams, so that people can capitalize on the organization’s knowledge base about work that has already been done, avoid repeating mistakes, and benefit from ongoing organizational learning.
Analyses include adequacy of personnel, time, equipment and money, effectiveness of the entire project, how well the project was tracked, how well top management and project sponsors were informed of the project’s status, and how well the project team performed together.
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Any aspirant preparing for Lean Six Sigma Certification Exams of ASQ or IASSC, it is important for you to understand the difference between CTQ, Primary Metric and Secondary Metric.
In Lean Six Sigma, the term CTQ is very commonly used. CTQ is an acronym Critical to Quality. As the name suggests, any attribute, parameter, factor or metric that is critical to the quality of the product or service you are offering to your customers can be considered as CTQ.
One important element of CTQ is that it should be measurable, directly or indirectly. As we all know, anything that cannot be measured, cannot be achieved. More or less, it is difficult to maintain the desired level of quality for any product or service, if an important or critical attribute is not measured.
In the context of improvement projects in Lean Six Sigma, using the framework of DMAIC, the objective of such projects will be for Lean Six Sigma Green Belt or Lean SIx Sigma Black Belt will be to improve a given CTQ. For example, if on time delivery could be a CTQ for the business because the customer wants your products or service on-time. Thus CTQ emanates from the customer. There are usually many CTQs for any product or service. But the DMAIC Project will have to focus on improving only CTQ at a time. Especially the one which is not performing up to the mark, as desired by customers. This becomes the primary metric of the project. In this example, On-time delivery could be a Primary Metric. The purpose of the project will now be fully aligned to improve this primary metric.
If that is the primary metric, the question we need to answer is what is a secondary metric in a Lean Six Sigma Improvement project? To understand how to identify secondary metric, we will take a step back and talk about the purpose of improvements in using Lean Six Sigma or any other structured problem solving approach.
Purpose of Using Structured Framework like Lean Six Sigma DMAIC for Problem Solving
There are many benefits of using such a framework, but come to the most pertinent point. Any improvement that is brought about by compromising or reducing the performance of any aspect of the business, product or service is not real improvement. It is mere optimization and doesn’t need problem solving skills. For example, if one adds more employees, equipment or cost to reduce the on-time delivery, that isn’t true improvement.
Hence we will need to ensure that Cost of Servicing and Quality of Service does not deteriorate as we try to improve On-time delivery.
These become Secondary Metrics for the project. Thus Secondary Metrics are those parameters or CTQs that will be monitored and sustained at current level, as we try to improve the primary metric. Secondary Metrics are also called Consequential Measures or Counter-measures.
While any DMAIC project should ideally have only one Primary Metric, it can have as many secondary metrics. All secondary metrics will be monitored and throughout the project, care will be taken to ensure there are no side effects on the Secondary Metrics as a result of any improvement in Primary metric.
The best way to identify secondary metrics will be through brainstorming. An alternate way would be to look for statistical relationships between various CTQs.
