1. The document is a presentation on using process behavior charts (PBCs) like X-charts and MR-charts to analyze time-series data and detect signals. 2. It uses the Halloween theme of "trick-or-treaters" data as an example to demonstrate how to construct PBCs, set natural process limits, and interpret the charts to determine if processes are in-control or if special causes are present. 3. The presentation emphasizes that PBCs can help organizations filter noise from signals, avoid overreacting to normal variation, and focus on improving processes when meaningful issues are detected.

1. Metrics & Statistics
Don't Have to be Scary
Mark Graban
Mark@KaiNexus.com
@MarkGraban
Matt Banna
Matt.Banna@KaiNexus.com
@MattBanna

2. The Hellish Webinar Boogistics
! Presentation (45 minutes)
" Or until the end of time
! Q&A (10 minutes)
! Use the GoToWebinar
Meeting Panel to
submit a question at
any time – if you dare!
! A ghoul will deliver recording link & slides via email
" Check your spooky spam folder
! Also – see the “Handouts” feature and Chat box

5. Reds…. Reds!!!!

6. Must root cause
your reds…

7. This is scary to me
Why?
Not every red is worth reacting to in that way…

8. I vant to
suck your
time…

9. The only ones
who don’t care
about time…

10. Every metric
has variation
Even if that’s frightful
to think about…

11. KaiNexus Webinar Registrations
Chart compiled in KaiNexus software

12. How many
trick or
treaters should I
plan for?

13. # of Trick or Treaters
Count
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990

14. Did You Say “Count?” Ah ah ah!

15. # of Trick or Treaters
Count
1980 36
1981 40
1982 42
1983 35
1984 43
1985 46
1986 38
1987 43
1988 45
1989 42
1990 47

16. Do we have a crystal ball?

17. Not a column chart!!!!

18. 1. Are we
achieving our
target or
goal?
2. Are we
improving?
3. How do we
improve?
Do we have a crystal ball?

19. A run Chart Can Help
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5
10
15
20
25
30
35
40
45
50
198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003
Run Chart (Trick or Treaters)

20. Three Key Questions
1. Are we
achieving our
target or
goal?
2. Are we
improving?
3. How do we
improve?

21. Can we predict future performance?

22. Signals vs. Noise
“While every data set contains noise,
some data sets may contain signals.
Therefore, before you can detect a signal
within any given data set,
you must first filter out the noise."
"Process
Behavior
Charts"

23. Process Behavior Charts Help
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10
20
30
40
50
60
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
X Chart (# of Trick or Treaters)
Lower Natural Process Limit
Upper Natural Process Limit
Average

24. The Math Zone!
Enter if you dare…

25. Is the Math Scary?
It’s not scary…
but you have to dare to enter…

26. Calculate Mean & Moving Ranges
! Calculate mean of the X
baseline data points
! Calculate the moving
range of the X-1 data
points
" =ABS(B3-B2)
26
Data
Moving
Range (MR)
1980 36
1981 40 4
1982 42 2
1983 35 7
1984 43 8
1985 46 3
1986 38 8
1987 43 5
1988 45 2
1989 42 3
1990 47 5

27. Calculate Natural Process Limits
! Calculate “MR-bar”
" Average of the baseline
! Calculate the Limits
" Lower = Average – 3*(MR bar)/1.128
" Upper = Mean + 3*(MR bar)/1.128
27
Data
Moving
Range
(MR) Average MR Bar
Lower
Natural
Process
Limit
Upper
Natural
Process
Limit
1980 36 41.55 4.70 29.04 54.05
1981 40 4 41.55 4.70 29.04 54.05
1982 42 2 41.55 4.70 29.04 54.05
1983 35 7 41.55 4.70 29.04 54.05
1984 43 8 41.55 4.70 29.04 54.05
1985 46 3 41.55 4.70 29.04 54.05
1986 38 8 41.55 4.70 29.04 54.05
1987 43 5 41.55 4.70 29.04 54.05

28. Draw the X Chart
-
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20
30
40
50
60
198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003
X Chart (# of Trick or Treaters)
Lower Natural Process Limit
Upper Natural Process Limit
Average

29. Draw MR Chart & Look for Signals
! Calculate MR Chart Upper Limit
" UCL = MR-bar * 3.27
29
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5
10
15
20
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
MR Chart

30. I’m David Pumpkins and My Charts Are
Gonna Scare the Hell Out of You…

31. I’m just trying to wrap my head around…

32. I’m David X Chart Pumpkins, Man!

33. And the other chart is???

34. Part of It!!!

35. Look at the Complete PBC Pairing
-
10
20
30
40
50
60
198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003
X Chart (# of Trick or Treaters)
-
10
20
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
MR Chart

36. Rules for Detecting a Signal
Rule 1 also applies to the MR Chart

37. A Spike in Candy
-
10
20
30
40
50
60
70
198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003
X Chart (# of Trick or Treaters)
-
10.00
20.00
198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003
MR Chart

38. A Sad Decline in Treats
-
10
20
30
40
50
60
70
198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003
X Chart (# of Trick or Treaters)
-
5.00
10.00
15.00
20.00
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
MR Chart

39. "Why were
leads down
last month?"

40. “I don’t
know…
let me look
into it.”

41. ”Ready or
not…
Here… we…
Chart?”

42. How Much David X. Chart Pumpkins is in This?

43. -
2
4
6
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10
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14
M
ar-14
Apr-14
M
ay-14
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ct-14
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ov-14
D
ec-14
Jan-15
Feb-15
M
ar-15
Apr-15
M
ay-15
Jun-15
Jul-15
Run Chart (Monthly Tier 1 Leads)

44. Don't waste
people's time
"writing fiction"

45. -
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ar-14
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ay-14
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ar-15
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ay-15
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Run Chart (Tier 1 Leads)

46. -
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ar-14
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ay-14
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ar-15
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ay-15
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X Chart (Tier 1 Leads)

47. “But I don’t
like those
limits,
they’re too
wide…”

48. -
5
10
15
20
25
M
ar-14
Apr-14M
ay-14
Jun-14
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ct-14
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ov-14
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ec-14
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ar-15
Apr-15M
ay-15
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ov-15
D
ec-15
X Chart (Tier 1 Leads)

49. -
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CApr-14M
ay-14Jun-14Jul-14Aug-14Sep-14O
ct-14N
ov-14D
ec-14Jan-15Feb-15M
ar-15Apr-15M
ay-15Jun-15Jul-15Aug-15Sep-15O
ct-15N
ov-15D
ec-15Jan-16Feb-16M
ar-16Apr-16M
ay-16Jun-16Jul-16Aug-16Sep-16
X Chart (Tier 1 Leads)

50. -
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X Chart (Tier 1 Leads)

51. (20)
(10)
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M
ar-14M
ay-14
Jul-14Sep-14N
ov-14
Jan-15M
ar-15M
ay-15
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Jan-16M
ar-16M
ay-16
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Jan-17M
ar-17M
ay-17
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ov-17
X Chart (Tier 1 Leads)
Rule 2 Rule 1

52. Must root cause
your reds…

53. Not every red is worth reacting to in that way…
IMPROVE THE SYSTEM!
DON'T OVERREACT!

54. Some Greens ARE Worth Reacting To…
SIGNALWHAT
CHANGED?

55. Noooo! The horror!
! Overreacting to noise
! Missing signals
! Confusing Natural Process
Limits with a target
! Using a calculated
Standard Deviation to
calculate the limits…

56. All in on David X Chart Pumpkins…

57. I’m Crazy… for Process Behavior Charts!

58. Any Questions???

59. Other Resources
KaiNexus.com/webinars
Blog.KaiNexus.com

60. Mark’s Previous Webinar on This Topic

61. Next Webinar – Wednesday November 28
http://www.kainexus.com/webinars
How One Community Hospital is Creating
a Culture of Continuous Improvement
Mike McGowan
Director, Process Excellence at Marietta Memorial Hospital

62. Mark Graban
Mark@KaiNexus.com
@MarkGraban
Matt Banna
Matt.Banna@KaiNexus.com
@MattBanna
Any Questions???
! Web:
! www.KaiNexus.com
! www.MeasuresofSuccessBook.com
! Social Media:
" www.twitter.com/kainexus
" www.linkedin.com/company/kainexus
" www.facebook.com/kainexus

63. Credits
Special thanks to all the people who made and released
these awesome resources for free:
! Presentation template by SlidesCarnival
! Photographs by Unsplash