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  1. #1
    Peter Bush Guest

    Default Process Behavior Charts In Library

    Bob and Iíve posted another Excel workbook to the Library under the title of Cost Data Study. This time it concerns what are called Process Behavior Charts or otherwise referred to as Statistical Process Control (SPC) Charts.

    This concept was first put forth by Walter Shewhart of Bell Laboratories in the 1920ís, and popularized by W. Edwards Deming throughout the world in the 80ís and 90ís. In recent years, Dr. Donald Wheeler has added the name of Process Behavior Charts, since the charts arenít so much about ďcontrollingĒ a process as they are for understanding itís behavior.

    The first chart is about installing some siding. I asked Bob Kovacs to aid me in collecting several times for installing siding as they might be listed in various estimating manuals. We came up with a listing of seven that have average times ranging from 1.70 to 4.10. Since thereís no time sequence involved in the collection of this data, all the individual times were randomly placed.

    The corresponding chart is plotted to the right. Along with the average time of 2.9257, there are two other reference lines posted Ė one at 4.5835 and another at 1.2679. These are the Natural Upper and Lower Control Limits. What the chart is saying is that a process with this set of data can produce individual times that range anywhere between the Lower and Upper Control Limits (LCL & UCL). There is nothing unusual about this fact so the variation is called Common Cause Variation. If you were using the average time to develop your bid as in Sample Job #1, and the actual time came in at the still acceptable range of the Upper Control Limit, then you stand to lose $1,657.80! Remember, the process behavior chart is merely showing you the ďnaturalĒ range you can expect. If you were to do this same task repeatedly under the same conditions, you could reasonably expect the time to average anywhere between 1.27 and 4.58 man/hrs per square.

    The Second chart and Sample Job #2, use the same data only I have thrown out the previous high and low value of 1.70 and 4.10. These could be aberrations. If you plot the remaining data, you still get a similar average of 2.936, but now the Upper Control Limit is a tighter 3.428 and the Lower 2.444. If you look at Sample Job #2 youíll see that itís still possible to generate a 16.76% variance and loss of $492.00 and be within perfectly acceptable limits!

    This is part of the danger in using an average to forecast your future performance. And what Jerry and I are referring to when we are talking about Common Cause Variation vs. Special Cause Variation.

    There are rules for determining the Upper and Lower Control Limits as well as for reading the chart. If you like, we can discuss all of this at length and youíll begin to understand how all of this can aid you in your estimating techniques.

    The second page of my workbook involves the hanging of a pre-hung door. For the data here, I took the values from my Historical Database (also in the Library) and added two more values #5 and #6. Ideally, youíd like to have a minimum of 5-6 data points to do a chart, but you can get by with 4. The more data points you use, the more accurate the chart.
    Itís important to note that these times are chronologically ranked. Along with the data plotted in the Individuals (X) chart, Iíve added another chart called the Moving Range (mR). The Moving Range chart is another good indicator about the performance of a process as long as the data points are time ordered. To plot this data, you find the difference between a data point and the one preceding it. If you subtract 1.50 from 1.60 you get .10. You do this for all the available times, which yield the data in the green shaded area. This is whatís plotted on the mR chart.
    Notice again, the difference between the Average and the Upper Control Limit (UCL). If you were bidding this job, what time value would you use to base your estimate upon?
    The XmR chart is a powerful tool you can use in your estimating procedures. It tells you what you can expect from your current process. If you donít like what itís telling you, if you donít like the parameters of the range, you have little recourse other than to change the process. If youíre not going to change the process, you need to realize that there are times when your performance can approach the UCL!

  2. #2
    glenn Guest

    Default Re: Process Behavior Charts In Library

    Yo Peter!

    Still at it I see.

    Remember the book I kept quoting from regarding what they called "Successive Estimating". You asked me about the book and I was never able to find either of my two copies.

    Well, I found it. The book is called "Professional Construction Management" by Donald Barrie and Boyd Paulson, Jr.

    I think this is an excellent book. My latest edition is 1984 but it was republished in 1991 and for certain, at least the pictures are updated. Mine has photos of those first Radio shack computer consoles in it and info about punch cards, etc.

    The latest edition is now about 13 years old and that doesn't say much for the book, or it would have been revised and updated again by now.
    But that is where I first got the info about Succesive estimating for speading up the estimating process where you assign 3 prices to everthing, compute the total variance and then determine which item is having the greatest influence on the variance and refine that item and continue until you are satisfied with the accuracy of your estimate. Saves a lot of time.

    Check out Chapter 11.

    I paid about $30 for the book. I see that it is now $102. Wow! My billing rate for consulting back then was $25 per hour. It is now $135 so I guess I've stayed ahead of inflation a little bit anyway.

    I haven't been around much. Too busy working.

    Good to see you still around.
    BTW, I spoke with someone in Knoxville today.
    YOu just can't beat a Tennesee native and a man would surely be lucky if he had a Tenn farm girl for a wife. I miss the south the way it was in the 50's. Tenn, Ark, Alabama, and Mississippi seem to not have changed much.

    Pardon me for digressing nostalgic.

    glenn


    Amazon link to book

  3. #3
    Peter Bush Guest

    Default Re: Process Behavior Charts In Library

    Glenn,

    Good to see you still around, also. Sorry that the charts of my above referenced post are now gone. The webmaster has erased everything in the library above.

    I'll definitely pick up the book you're describing. Could use some additional reading material right now anyway.

    BTW, I moved here to Tennessee in 1989. I'm actually a native of Connecticut. I hope you won't hold that against me. I have two grandsons now, that are Tenn. natives. I guess you could say I've put down roots.

  4. #4
    glenn Guest

    Default Re: Process Behavior Charts In Library

    What happened to the charts? Why were they deleted?

    I am familiar with SPC. I once wrote a custome software package ($20,000 worth) for a Chemical Industry which incorporated their SPC with COA's (certificates of analysis).

    When a truck load of material was loaded, it was sampled and analyzed. When it came across the scales the data was entered into this program which included the shipping information, weight etc. and a certificate certifying to certain parameters. The paramenters were then graph onto SPC charts including the computation of upper and lower limits etc as you described.

    Prior to that I had never heard of SPC.

    There are software packages that do that but Excel manages it quite well.

    I'd be interested in knowing what is in the new version of the book. The table of contents in the new edition, matches exactly with the table of contents of the old edition, but I'm betting that it had to have been up dated some due to a lot of references to antiquated procedures and equipment.

    glenn

  5. #5
    Peter Bush Guest

    Default Re: Process Behavior Charts In Library

    Glenn,

    I ordered a used version of the latest edition (which is 13 years old). It only cost me $50 with shipping. I'll let you know what I think when I finish reading it.

    If you like, I can send you the Excel examples I had posted. I'd be interested in your input if you have time.

  6. #6
    glenn Guest

    Default Re: Process Behavior Charts In Library

    Sure,
    Send to my email address.
    glenn

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