again, using “average” from spreadsheet can give you wrong decision

November 17, 2010

based on a talk with my colleague, here is a story.

an improvement team formed to save production cost of a widget. Early in 2010 they start a new “improved” process. They track the result and the team show 10% improvement from $10/unit to $ 9/unit.

The comparison of 2009 vs 2010 is below.

If the improvement team and the management think the new process is better, they are wrong.

Every time we use spreadsheet, let’s use the graph to see: trend, indication of variations/stability and the shape of the distribution. With a simple run chart this is the chart from 2009 and 2010:

if you see, the new process in 2010, while in “average” lower than 2009, but in reality it only works in the first half of 2010, and show trend of increasing cost/unit. In fact, the cost by end of 2010 is higher than 2009.

In summary, be careful with your spreadheet…it show you data, but hide many information