Industrial M Notes

7/27/2019 Industrial M Notes

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Module l

FAYOLS Principle of Management:

1. DIVISION OF WORK: Work should be divided among individuals and groups to ensure thateffort and attention are focused on special portions of the task. Fayol presented work

specialization as the best way to use the human resources of the organization.

2. AUTHORITY: The concepts of Authority and responsibility are closely related. Authority wasdefined by Fayol as the right to give orders and the power to exact obedience. Responsibility

involves being accountable, and is therefore naturally associated with authority. Whoever

assumes authority also assumes responsibility.

3. DISCIPLINE: A successful organization requires the common effort of workers. Penaltiesshould be applied judiciously to encourage this common effort.

4. UNITY OF COMMAND: Workers should receive orders from only one manager.5. UNITY OF DIRECTION: The entire organization should be moving towards a common

objective in a common direction.

6. SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL INTERESTS : The interests ofone person should not take priority over the interests of the organization as a whole.

7. REMUNERATION: Many variables, such as cost of living, supply of qualified personnel,general business conditions, and success of the business, should be considered in

determining a workers rate of pay.

8. CENTRALIZATION: Fayol defined centralization as lowering the importance of thesubordinate role. Decentralization is increasing the importance. The degree to which

centralization or decentralization should be adopted depends on the specific organization in

which the manager is working.9. SCALAR CHAIN: Managers in hierarchies are part of a chain like authority scale. Each

manager, from the first line supervisor to the president, possess certain amounts of

authority. The President possesses the most authority; the first line supervisor the least.

Lower level managers should always keep upper level managers informed of their work

activities. The existence of a scalar chain and adherence to it are necessary if the

organization is to be successful.

10.ORDER: For the sake of efficiency and coordination, all materials and people related to aspecific kind of work should be treated as equally as possible.

11.EQUITY: All employees should be treated as equally as possible.12.STABILITY OF TENURE OF PERSONNEL: Retaining productive employees should always be a

high priority of management. Recruitment and Selection Costs, as well as increased product-

reject rates are usually associated with hiring new workers.

13. INITIATIVE: Management should take steps to encourage worker initiative, which is definedas new or additional work activity undertaken through self direction.

14.TEAM SPIRIT: Management should encourage harmony and general good feelings amongemployees.


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Douglas McGregor's Theory X & theory Y:

Douglas McGregor has given his theory of motivation called Theory X and Theory Y. He

treated traditional approach to management as 'Theory X' and the professional approach to

management as 'Theory Y'. His theory refers to two sets of employees based on theperception of human nature. Here, theory X and theory Y are two sets of assumptions about

the nature of employees. His theory is based on human behavior.

Theory X

Theory X is based on traditional assumptions about people (employees). Here, the

conventional approach of management is used as a base. It suggests the following features

of an average human being/employee (assumptions about human nature)

Assumptions of Theory X.

1. The average human being is inherently lazy by nature and desires to work as little aspossible. He dislikes the work and will like to avoid it, if he can.

2. He avoids accepting responsibility and prefers to be led or directed by some other.3. He is self-centered and indifferent to organizational needs.4. He has little ambition, dislikes responsibility, prefers to be led but wants security.5. He is not very intelligent and lacks creativity in solving organizational problems.6. He by nature resists to change of any type.

In the case of such employees, self-motivation is just not possible. They will work only

when there is constant supervision on them. A manager has to persuade, punish or reward

such workers in order to achieve organizational goals.

Theory Y

Theory Y is based on modern or progressive or professional approach. Here, the

assumptions about people i.e. employees are quite different.

Assumptions of Theory Y

1. Work is as natural as play, provided the work environment is favorable. Work mayact as a source of satisfaction or punishment. An average man is not really against

doing work.

2. People can be self-directed and creative at work if they are motivated properly.3. Self-control on the part of people is useful for achieving organizational goal. External

control and threats of punishment alone do not bring out efforts towards

organizational objectives.4. People have capacity to exercise imagination and creativity.


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5. People are not by nature passive or resistant to organizational needs. They havebecome so as a result of experience in organisations.

6. An average human being learns under proper conditions. He is also willing to acceptresponsibility.

7. The intellectual capacity of an average human being is utilised partially under theconditions of modern industrial life.Final Glance on Theory X and Theory Y

Such types of people (employees) are self-motivated and McGregor recommends that

they be motivated by encouraging participation so as to get team work.

Theory Y assumes that people are not by nature, lazy and unreliable. They can be self-

directed and creative at work, if properly motivated. It is for the management to unleash

this potential in individuals (employees). Theory Y emphasizes creating opportunities,removing obstacles, providing guidance and encouraging growth. By using these tools, the

management can integrate individual goals of employees with those of the Organisation.

The assumptions in Theory X and Theory Y are fundamentally distinct. Theory X is static,

rigid, conservative and pessimistic. Theory Y is optimistic, dynamic, flexible and progressive.

It suggests self direction and the integration of individual needs with organizational needs.

On the other hand, more importance is given to external control imposed by the superior on

the subordinate in the Theory X.

Mayo's Hawthorne Experiments:

Elton Mayo was in charge of certain experiments on human behaviour carried out at the

Hawthorne Works of the General Electric Company in Chicago. They conducted a number ofexperiments involving six female workers.

Mayos team altered the female workers working conditions and then monitored how it

affected the workers morale and productivity. The changes in working conditions included

changes in working hours, rest brakes, lighting, humidity, and temperature.

The results during and after the experiments led Mayo to conclude that, workers were motivated by

psychological conditions more than physical working condition.

There is an unwritten understanding between the worker and employer regarding what is

expected from them; Mayo called this the psychological contract.

A workers motivation can be increased by showing an interest on them. Mayo classified

studying the workers (through the experiments) as showing an interest on the workers.

Work is a group activity, team work can increase a workers motivation as it allows people

to form strong working relationships and increases trust between the workers. Work groups

are created formally by the employer but also occur informally. Both informal and formal


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groups should be used to increase productivity as informal groups influence the workers

habits and attitudes.

Workers are motivated by the social aspect of work, as demonstrated by the female workers

socialising during and outside work and the subsequent increase in motivation.

Workers are motivated by recognition, security and a sense of belonging.

The communication between workers and management influences workers morale and

productivity. Workers are motivated through a good working relationship with

management.

Hertzbergs Two Factor Theory Of Motivation

According to Herzberg, there are some job factors that result in satisfaction while there

are other job factors that prevent dissatisfaction. According to Herzberg, the opposite ofSatisfaction is No satisfaction and the opposite of Dissatisfaction is No

Dissatisfaction.

Herzberg classified these job factors into two categories.

a. Hygiene factors:

Hygiene factors are those job factors which are essential for existence of motivation at

workplace. These do not lead to positive satisfaction for long-term. But if these factors are

absent or if these factors are non-existent at workplace, then they lead to dissatisfaction. In

other words, hygiene factors are those factors which when reasonable in a job, pacify theemployees and do not make them dissatisfied. These factors are extrinsic to work.

Hygiene factors are also called as dissatisfiers or maintenance factors as they are

required to avoid dissatisfaction. These factors describe the job environment. The hygiene

factors symbolized the physiological needs which the individuals wanted and expected to be

fulfilled. Hygiene factors include:

Pay- The pay or salary structure should be appropriate and reasonable. It must beequal and competitive to those in the same industry in the same domain.

Company Policies and administrative policies- The company policies should not betoo rigid. They should be fair and clear. It should include flexible working hours,dress code, breaks, vacation, etc.

Fringe benefits- The employees should be offered health care plans (mediclaim),benefits for the family members, employee help programmes, etc.

Physical Working conditions- The working conditions should be safe, clean andhygienic. The work equipments should be updated and well-maintained.

Status- The employees status within the organization should be familiar andretained.


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Interpersonal relations-The relationship of the employees with his peers, superiorsand subordinates should be appropriate and acceptable. There should be no conflict

or humiliation element present.

Job Security- The organization must provide job security to the employees.b. Motivational factors:

According to Herzberg, the hygiene factors cannot be regarded as motivators. The

motivational factors yield positive satisfaction. These factors are inherent to work. These

factors motivate the employees for a superior performance. These factors are called

satisfiers. These are factors involved in performing the job. Employees find these factors

intrinsically rewarding. The motivators symbolized the psychological needs that were

perceived as an additional benefit. Motivational factors include:

Recognition- The employees should be praised and recognized for theiraccomplishments by the managers.

Sense of achievement- The employees must have a sense of achievement. Thisdepends on the job. There must be a fruit of some sort in the job.

Growth and promotional opportunities- There must be growth and advancementopportunities in an organization to motivate the employees to perform well.

Responsibility- The employees must hold themselves responsible for the work. Themanagers should give them ownership of the work. They should minimize control

but retain accountability.

Meaningfulness of the work- The work itself should be meaningful, interesting andchallenging for the employee to perform and to get motivated.

Limitations of Two-Factor Theory

1. The two-factor theory overlooks situational variables.

2. Herzberg assumed a correlation between satisfaction and productivity. But the research

conducted by Herzberg stressed upon satisfaction and ignored productivity.

3. The theorys reliability is uncertain. Analysis has to be made by the raters (person who

rates). The rater may spoil the findings by analyzing same response in different manner.

4. No comprehensive measure of satisfaction was used. An employee may find his job

acceptable despite the fact that he may hate/object part of his job.

5. The two factor theory is not free from bias as it is based on the natural reaction of

employees when they are enquired the sources of satisfaction and dissatisfaction at work.

They will blame dissatisfaction on the external factors such as salary structure, company

policies and peer relationship. Also, the employees will give credit to themselves for the

satisfaction factor at work.

6. The theory ignores blue-collar workers. Despite these limitations, Herzbergs Two-Factortheory is acceptable broadly.


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Maslows Hierarchy Of Human Needs

Abraham Maslows theory of human needs is a classical depiction of human motivation.

This theory is based on the assumption that, there is a hierarchy of five needs within each

individual. The urgency of these needs varies. These five needs are as follows,

Physiological needs- These are the basic needs of air, water, food, clothing and shelter. In

other words, physiological needs are the needs for basic amenities of life.

Safety needs- Safety needs include physical, environmental and emotional safety and

protection. For instance- Job security, financial security, protection from animals, family

security, health security, etc.

Social needs- Social needs include the need for love, affection, care, belongingness, and

friendship.

Esteem needs- Esteem needs are of two types: internal esteem needs (self- respect,

confidence, competence, achievement and freedom) and external esteem needs

(recognition, power, status, attention and admiration).

Self-actualization need- This include the urge to become what you are capable of becoming

or what you have the potential to become. It includes the need for growth and self-

contentment. It also includes desire for gaining more knowledge, social- service, creativity

and being aesthetic. The self- actualization needs are never fully satiable. As an individual

grows psychologically, opportunities keep cropping up to continue growing.

According to Maslow, individuals are motivated by unsatisfied needs. As each of these

needs is significantly satisfied, it drives and forces the next need to emerge.

Maslow grouped the five needs into two categories - Higher-order needs and Lower-order

needs. The physiological and the safety needs constituted the lower-order needs. These

lower-order needs are mainly satisfied externally. The social, esteem, and self-actualization

needs constituted the higher-order needs. These higher-order needs are generally satisfiedinternally, i.e., within an individual.


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For eg,Implication of Maslows Hierarchy of Needs Theory for Managers

As far as the physiological needs are concerned, the managers should give employees

appropriate salaries to purchase the basic necessities of life. Breaks and eating

opportunities should be given to employees.

As far as the safety needs are concerned, the managers should provide the employees job

security, safe and hygienic work environment, and retirement benefits so as to retain them.

As far as social needs are concerned, the management should encourage teamwork and

organize social events.

As far as esteem needs are concerned, the managers can appreciate and reward

employees on accomplishing and exceeding their targets. The management can give the

deserved employee higher job rank / position in the organization.

As far as self-actualization needs are concerned, the managers can give the employees

challenging jobs in which the employees skills and competencies are fully utilized.

Moreover, growth opportunities can be given to them so that they can reach the peak.

Limitations of Maslows Theory

It is essential to note that not all employees are governed by same set of needs. Different

individuals may be driven by different needs at same point of time. It is always the most powerful

unsatisfied need that motivates an individual.

The theory is not empirically supported.

The theory is not applicable in case of starving artist as even if the artists basic needs are not

satisfied, he will still strive for recognition and achievement.

Module ll

Departmentation

The division of labour divides the jobs into smaller activities. In order to coordinate these

activities, they are grouped together. The basis by which these activities are grouped

together are known as departmentation.

It may be defined as the process of forming departments or grouping activities of an

organization into a number of separate units for the purpose of efficient functioning. This

term vary a great deal between different organizations. For example, in business

undertaking, terms are division, department and section; in Government these are called

branch, department and section; in military, regiment, battalion groups and company.

The impact of departmentation is a delineation of executive responsibilities and a grouping

of operating activities.The major benefits of departmentalization are:


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Specialization: Departmentation leads to the benefits of specialization as various

organizational activities are grouped according to their relation with the specific functions

or objectives. Every departmental manager specializes in the tasks assigned to him.

Administrative control: Departmentation helps in effective managerial control because the

standards of performance for each and every department can be laid down precisely. Every

department has a specific objective. This also facilitates keeping expenditure within limits.

Fixation of responsibility: Since organization work is divided into manageable units, and

authority and responsibility are precisely defined, it is easier to fix the accountability of

different managers for the performance of various tasks.

Freedom or autonomy: The departments created through departmentation are semi-

autonomous units. Their heads are given a sufficient degree of authority to run their

departments. This increases the efficiency of the departments.

Development of managers: Departmentation helps in the development of managerial

personnel by providing them opportunities to take independent decisions and initiative. The

executives can develop themselves for promotion to higher jobs.

Span of Control: The departmentation reflects the types of jobs which are groupedtogether. Different persons are involved in performing these jobs. They are required to be

supervised closely.

Decentralization:

The degree, to which decision making power is extended to the lower levels of

management in the organization is called decentralization.

There are some organizations, where top management makes all the decisions and middle

and lower level managers merely implement the decisions taken by the top management.At the other extreme, there are some organizations in which decisions are made at all levels

of management. The first case fits into the centralized structure where as the second one is

highly decentralized.

One of the fourteen principles of Henry Fayol happens to be centralization. According to

him, decreasing the role of subordinates in decision-making is centralization; increasing

their role is decentralization. Fayol believed that managers should retain final responsibility

but at the same time give their subordinates enough authority to do their jobs properly.

Decentralization is the systematic effort to delegate to the lowest levels all authority

except that which can be exercised at central points. It is the pushing down of authority andpower of decision-making to the lower levels of organization. The centers of decision-

making are dispersed throughout the organization. The essence of decentralization is the

transference of authority from a higher level to a lower level. It is a fundamental principles

of democratic management where each individual is respected for his inherent worth and

constitution.

The larger the size of an organization, the more urgent is the need for decentralization.

This does not mean that decentralization is good and centralization is bad.

Decentralization is a correlate of delegation; to the extent that authority is not delegated,

it is centralized. Absolute centralization decreases the role of subordinate managers which


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in turn encourages decentralization. Absolute decentralization is also not possible because

managers cannot delegate all their authority.

Centralization refers to the degree to which decision making is centralized in the

organization. Absolute centralization is untenable because it would mean that subordinates

have no duties, power or authority. Centralization may be essential in small organization.

Virtual Organization

The virtual organization is used to describe a network of independent firms that join

together, often temporarily, to produce a service or product. Virtual organization is often

associated with such terms as virtual office, virtual teams, and virtual leadership. The

ultimate goal of the virtual organization is to provide innovative, high-quality products or

services instantaneously in response to customer demands.

When an organization assembles resources from a variety of firms, a virtual organization

seems to have more capabilities than it actually possesses.

Partners in virtual organizations share risks, costs, and rewards in pursuit of a global market.

The common characteristics of these organizations include a purpose that is motivated by

specific market opportunities, world-class core competence, interdependent relationships,

and permeable boundaries.

Virtual organizations represent structures that are motivated by specific market

opportunities.

Virtual teams: a group of people who interact through interdependent tasks guided by a

common purpose. Unlike conventional teams, a virtual team performs work across space,time, and organizational boundaries.


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Virtual leader: The leader of a virtual organization demands a new set of skills unlike the

skills required in a traditional hierarchy.

e.g. An industry that is known for its use of partners and alliances is the entertainment

industry, which has partnered with the computing, communications, consumer electronics,

and publishing industries to convert movies, textbooks, and other software into digitalformats.

Boundary less Organization:

A boundary less organization is a contemporary approach in organization design. It is an

organization that is not defined by, or limited to, the horizontal, vertical, or external

boundaries imposed by a predefined structure.

The credit for coining the term boundary less organization goes to Mr. Jack Welch of

General Electrics (GE). He wanted GE to become boundary less organization.

The type of organization, which seeks to eliminate the chain of command, have limitless

span of control and replace departments with empowered teams. By removing vertical

boundaries, management flattens the hierarchy, status, and ranks are minimized.

G.E. has been using cross-hierarchical teams, participative decision making practices and

360-degree performance appraisal system to break vertical boundaries.

It is the networked computers (with the help of internet and intra-net), which makes the

boundary less organization possible by allowing people to communicate across inter-

organizational and intra-organizational boundaries. Electronic Mail for example permitshundreds of employee to share information simultaneously and allows ranks and file

workers to communicate directly with senior executives.

Inverted Pyramid Structure:

In traditional management model, authority and decision-making power are concentrated

at the top of an organizational pyramid. Orders are issued and carried out by subordinates.

The inverted pyramid organization is a method oforganization in which facts are presented

in descending order of importance


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Concept: The inverted pyramid is a metaphor for a reversal of traditional management

practices. Employees who are closest to clients or production processes are placed at the

top and managers at the bottom. The employee is empowered with greater decision-making

authority and freedom of action.

In theory, overall organizational performance becomes faster, more adaptable and more

effective

Development: Successfully shifting decisions to employees at the base of the pyramid

requires that those employees develop new skills.

Adequate resources must be devoted to developing a skill set that includes cooperation

and decision making. Employees in an inverted pyramid situation also need more

information and communication.

To make effective decisions, each employee must understand organizational goals and

the role she has in achieving those goals.

Management: To successfully invert the organizational pyramid, management has to be

consistent when shifting decision making to employees. The resources needed to develop

the necessary skill set must be allocated, and the manager should take on the role of

mentor or coach.

Finally, success depends on trusting employees and demonstrating a genuine willingness

to share authority.

LEAN AND FLAT ORGANIZATION STRUCTURE:

Lean Organizational Structure

Lean production is a Japanese system that helps cut down on costs in manufacturing

plants and factories. A company that implements lean techniques should also adopt a lean

organizational structure.


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Identification: In a lean organizational structure, the organizational arrangement should

flow along product and process lines rather than on functional areas. For instance, some

leancompanies set up integrated product and process teams as self-organized work teams.

A dedicated team for each product family could include expertise from differentfunctional areas such as marketing, purchasing, manufacturing, quality assurance and

customer relations.

Reporting Structure: Work teams in lean organizational structures should not be set up to

report through many layers in a hierarchy. Instead, the reporting structure should focus on a

connected set of activities in a horizontal stream.

Benefits: A lean organizational structure helps promote lean objectives such as minimizing

waste through continuous improvement. This sort of structure reduces the need for

nonessential functions and enhances efficiency and flexibility.

Flat Organizational Structure

Features: In a flat organization structure, there are few levels of command that exist

between the employee and the top management. This structure is best suited to small

organizations.

Function: This structure is used by organizations where employees are vested with decision-

making powers. Hotels, spas, restaurants and beauty parlours use this structure. The

employees are required to use their judgement and customize the product as per the

customers specifications.

Advantages: Communication flows are greatly enhanced here. The management and the

employees work together toward achieving organizational goals and objectives. As the roles

of middle men are eliminated, the company does not end up paying unnecessary salaries.

Also, as the employees use their judgment and discretion in carrying out work, the response

times are very fast.

Disadvantages: The main problem here is that an employee might be reporting to more

than one superior. There is no clarity on whose work he must complete first. Also, this

structure is suited only to small organizations that have limited numbers of employees.


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Organizational Team Structure

As an organization grows, its structure becomes increasingly important. A large

organization can't be managed properly unless it has a strong internal structure.

There are several ways to structure an organization, including by function or by

department. One of the most common is a team structure. A team is composed of

employees who work together on a specific project; it's a pragmatic way to group

employees.

A team structure is cross-functional. It combines workers with various skills, like

management, administrative assistants and sales.

Interdepartmental: Cross-functional teams are also interdepartmental; this means that

people from various departments are included. For example, staff from marketing may work

with staff from accounting on a

Advantages: A team structure has the advantage of speeding up the work flow and lowering

costs. It also generally improves employee motivation and eliminates unnecessary layers of

management.

Disadvantages: The disadvantages to a team structure are that it increases the time spent in

meetings, and that time management is more challenging. What's more, staff may feel that

their work with the team conflicts with their work in their department.


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Module lV

Product Life Cycle

The product life cycle is an important concept in marketing. It describes the stages a

product goes through from when it was first thought of until it finally is removed from the

market. Not all products reach this final stage. Some continue to grow and others rise and

fall.

The main stages of the product life cycle are:

Introduction researching, developing and then launching the product Growth when sales are increasing at their fastest rate Maturity sales are near their highest, but the rate of growth is slowing down, e.g.

new competitors in market or saturation

Decline final stage of the cycle, when sales begin to fallThis can be illustrated by looking at the sales during the time period of the product.

A branded good can enjoy continuous growth, such as Microsoft, because the product is

being constantly improved and advertised, and maintains a strong brand loyalty.

Extension strategies extend the life of the product before it goes into decline. Again

businesses use marketing techniques to improve sales. Examples of the techniques are:

Advertising try to gain a new audience or remind the current audience Price reduction more attractive to customers Adding value add new features to the current product, e.g. video messaging on

mobile phones


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Explore new markets try selling abroad New packaging brightening up old packaging, or subtle changes such as putting

crisps in foil packets or Seventies music compilations.

Micromotion Study

It is a technique for recording and timing an activity.

It consists of taking motion pictures of the operation with a clock in the picture (or with a

video camera running at a known speed).

The film is a permanent record of the method and the time and is always ready to be

examined when needed.

Purposes of micromotion study

1. To assist in finding the preferred method of doing the work.

2. To assist in training the workers to understand the meaning of motion study and toenable them to apply motion economy principles in a professional way.

Micromotion study as an aid in improving methods

The procedure of making a micromotion study consists of:

1. Filming the operation to be studied.

2. Analyzing the film.

3. Charting the results of the analysis.

4. Developing the improved method.

The speed of the camera used ranges from 960 to 1000 frames per minute. But faster

cameras may be used to study very fast hand motions or complex operations.The pictures should be enlarged many times to facilitate the analysis of the motions.

Micromotion study should be used when it is economical to do so (short cycle highly

repetitive operations, large volume production, or operation performed by a large number

of workers).

Memomotion Study

In memomotion study, the camera speed is at 60 or 100 frames per minute. In addition to

its use in industrial operations, it is used to study many other operations such as check-inoperations as airline counters, the manner in which customers select items in the store,

traffic flow on highways, and in banks.

It costs less than micromotion study (only costs 6% of the cost of a micromotion study).

ISO 9000 Series

The ISO 9000 Series Standards for Quality Management and Assurance were issued by the

International Organization for Standardization (ISO) in 1987. They reflect an important trend

in business practice. Early in the 20th century, quality was viewed by businesses as an

additional cost of production. However, as businesses realized that high quality leads to


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Treating suppliers as business partners whose success is vital to the success of thebusiness itself and who have invaluable technical expertise which can be utilized in

improving the end customer experience.

To achieve the above you need a set of tools and techniques, which you can apply, toproblem solving or opportunity achievement. The best known TQM Tools and Techniques,

to name a few are:

1. Check sheet: pre-formatted lists for noting incidence, frequency, etc., according toknown useful criteria

2. Pareto chart: a line and bar graph displaying cause/effect ratios, especially biggestrelative cause, based on Pareto theory.

3. Flow chart : A boxes and arrows method of examining activities, potentially used inbrainstorming, also found in business process modelling

4. Cause and effect diagram/Fishbone/Ishikawa Diagrams: for identifying cause &effect patterns, in which primary categories are generally pre-determined according

to context.

5. Histogram: a bar graph displaying data in simple categories which together accountfor a total.

6. Scatter diagram: a graph which plots points (typically very many individualinstances) according to two variables, which produces a useful visual indication of

the relationship between the two variables.

7. Control chart: a standard pattern of performance/time for a given process, often inRun Chart format, which acts as a template to check conformance and deviation.

Check Sheet:

A simple means of data collection. Function to present information in an efficient graphical format. Defining characteristic of a check sheet is that data is recorded by making marks

(checks).

Data is read by observing the location and number of marks on the sheet.


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Pareto chart

Used to identify factors that have the greatest cumulative effect on the system. Pareto principle: 80% of problems stem from 20% of the various causes. A special type of bar chart created by plotting the cumulative frequencies of the

relative frequency in descending order.

For example, if your business was investigating the delay associated with processing

credit card applications, you could group the data into the following categories:

1) No signature2) Residential address not valid3) Non-legible handwriting4) Already a customer5) Other

Flow Chart

Common type of chart. Defined as a pictorial representation of describing a process used to plan stages of a

project.


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Cause and effect diagram/ Ishikawa diagram/Fishbone Diagram

Diagram showing the cause of a certain event. Used to identify potential factors causing an overall effect. Used to see all possible causes of a result and hopefully find the root of process

imperfections. It is known as fishbone diagram because its shape is similar to side view of a fish

skeleton.

Histogram

A Histogram is a graphic summary of variation in a set of data. It enables us to see patterns that are difficult to see in a simple table of numbers.

Can be analyzed to draw conclusions about the data set.

A histogram is a graph in which the continuous variable is clustered into categoriesand the value of each cluster is plotted to give a series of bars.

The below example reveals the skewed distribution of a set of product measurements

that remain nevertheless within specified limits. Without using some form of graphic

this kind of problem can be difficult to analyze, recognize or identify.


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Scatter Diagram

A scatter plot is effectively a line graph with no line - i.e. the point intersectionsbetween the two data sets are plotted but no attempt is made to physically draw a

line.

The Y axis is conventionally used for the characteristic whose behavior we would liketo predict.

Used, to define the area of relationship between two variables.

Control Chart

Control charts are a method of Statistical Process Control, SPC. (Control system forproduction processes).

They enable the control of distribution of variation rather than attempting to controleach individual variation.

Upper and lower control and tolerance limits are calculated for a process andsampled measures are regularly plotted about a central line between the two sets of

limits.

The plotted line corresponds to the stability/trend of the process. Action can betaken based on trend rather than on individual variation.

This prevents over-correction/compensation for random variation, which would lead to

many rejects.


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