Day: September 12, 2008

Latin Hypercube and Monte Carlo Sampling: When is the distinction important?

Latin Hypercube analysisWhen using @RISK (Monte Carlo software for risk analysis and risk assessment), a user may choose between the Monte Carlo (MC) and Latin Hypercube (LH) sampling types.  LH sampling involves a stratification of the input distribution i.e. the cumulative curve is divided into equal intervals on the cumulative probability scale (0 to 1.0).  In theory, LH sampling would create a more representative sampling of the distribution.  It would avoid potential non-representative clustering of sampled values (particularly when small sample sizes are drawn i.e. a small number of iterations is used), and would also ensure that tail samples of the input distributions are drawn (e.g. for 1000 iterations, exactly one value above the P99.9 would be drawn, whereas for MC sampling either none, one or several samples may be drawn).  In general, LH sampling would be favourable when testing and developing a model (running only a small number of iterations), or when running a model that is so large that only a small number of iterations can be conducted.  It can also be used to force the sampling of tails of distributions, although it should be remembered that LH stratification applies to each individual input variable, and it would not force the simultaneous sampling of tail values for more than one input.

Dr. Michael Rees
Director of Training and Consulting

Manufacturing jobs back to the US?

Recently, one furniture manufacturing company who had slated 8 of their manufacturing facilities to be moved to China changed its mind and will continue producing furniture in the US. The reasons for change that were cited were the weak US Dollar and high shipping costs from China to the US. Both of these factors actually made it more cost effective to produce in the States. Decisions like this give the US a second chance to reduce operating costs and increase quality to save jobs in the US by implementing proven quality programs like Lean Six Sigma.

But will US manufacturers take this opportunity to re-enter the global scene ready to play at a higher level? Or will they choose to take the business that comes back across the ocean for now but watch it go back overseas as the situation normalizes?  This is a special ‘gift’ that we are given, where we have an opportunity to win back some of the losses of prior years.  I am a firm believer in the American “Can Do” spirit.  I know we can do it.  But will we?  And how should we proceed?

The state of Six Sigma Conventions and Summits

I do believe these conventions are extremely important venues for idea sharing, networking, brainstorming and continuing education.  It’s my impression that there are hundreds of thousands of Six Sigma practitioners, just in the Unites States alone. With this said, why are these “tradeshows” so sparsely attended? One may argue that the number of attendees has been increasing but I would think that these conferences should attract thousands of delegates and hundreds of exhibitors which isn’t the case. The organizations such as the ASQ, ISSSP and IQPC that coordinate these conventions are experts at hosting excellent events and do an excellent job, so why the low turnouts? My thoughts:

Competing technologies
As technologies around the internet grow, we are developing more tools to stay connected to the outside world without ever leaving our desks. Technologies like “web conferencing” and VOIP allow us to have meetings, and attend classes and free seminars. Couple this capability with professional networking sites like Linkedin, and one could conceivably never leave their desk and still learn the latest trends and developments in the industry, as well as network.

It seems that other industries have far fewer focused tradeshows per year. Could it be the sheer volume of events per year that is diluting the communities will to participate? All told, I would guess that there are at least 15-20 Six Sigma events per year that range in focus from the Department of Defense Lean Six Sigma, Healthcare, Lean Enterprise, Design for Six Sigma and a host of Six Sigma Summits and award ceremonies.

The cost of attendance often exceeds $2000 per attendee, and the cost of exhibiting and speaking for 45 minutes is more than some full-time employees make per year.  American businesses may be spending these dollars on their processes improvement and product development projects or perhaps they just don’t have the money and time to participate.

How about each organization holds a maximum of events 2 per year, perhaps one on the east coast and one on the west . Invite all the different communities and have special education and speaking tracks based on industry. This model would allow larger meetings where true idea sharing and networking can happen across industry, allowing the Automobile Six Sigma Practitioners to meet DOD and Healthcare Practitioners and share ideas and information.