The last question is a clue as to what I am getting at. If we refer to a calendar from 2006 and determine the work days, there are 255. This by removing weekends and major holidays, as Achille stated he does not work. Dividing the $1,000,000.00 annual sales by 255 work days, gives about $3921.56 per day.
Taking the first six-months, the work days add to 127. Multiplied by the average per-day, sales should be about $498,000.00 or exactly where they were. Statistically there has been no change. July has 21 work days, his sales of $82,353.00 are again statically what would be expected. August has 22 days, again no change.
The point is, looking at numbers without a knowledge of statistics can be very misleading. This can lead to superstitious knowledge, as in the case of the balloon and his thoughts on advertising. Time is wasted, money is wasted and results are left to luck. Achille will likely be very disappointed in September, which has only 19 work days.
Had Achille looked at the same figures, using a run chart and statistical process control (SPC) a very different message might have been gained. Rather than the needless worry and knee jerk management, he may have questioned why his sales were static. He has a stable system, for producing $3921.56 per day. To improve this he must work with the common causes of the system. What he has done is to confuse common cause with special cause.
Here’s our test:
Realizing Achille’s position and with a knowledge of common and special causes and SPC, how would you advise Achille to proceed?
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