Creating a SIPOC Chart
February 12, 2025
Countries all over the world try to promote exports. Almost every country offers financial incentives to exporters. Countries like China have Special Economic Zones wherein exporters are not charged any tax. Similarly, other countries have special banks and insurance agencies promoted by the government to facilitate export growth. This brings us to the importance of […]
Now, since we know about the different types of processes that an organization has, it is essential that we understand that these are just the pieces of the puzzle. How these pieces fit together is what creates a masterpiece or an average organization. However, understanding the components has given us a clear idea of what […]
The Global Airline Industry and its Travails It is an open secret that airlines all over the world are bleeding due to various reasons. They range from overcapacity and the intense competition or fare wars and price cuts by lower cost airlines to the fact that operational expenses have gone up so much that profits […]
Definition of Supply Chain Management If you go to a Supermarket and pick up a few items off the shelf from electronics and white goods or even clothes and look at the labels, the chances are that you will find them having been manufactured in China or Mexico. The coffee pods you buy to use […]
The list derived from the detailed process map needs to be shortlisted. This can be done in multiple ways. The different tools that are commonly used in six sigma projects to meet the purpose have been written down. They are as follows: Cause Effect Matrix: The cause and effect matrix takes the list of inputs […]
A scatter plot is a graphical tool. It has been designed to ensure that it provides a convenient view of the process to the manager at a single glance. The scatter plot studies the correlation between the important variables. When it studies the correlation between two variables, it is called a bivariate scatter plot. When there are multiple variables involved, it is called a multivariate scatter plot.
Correlation is the degree to which two variables simultaneously vary. A good example would be that whenever the cycle time is high, customer dissatisfaction is also high. Correlation is recorder on a scale of +1 to -1. +1 shows perfect correlation, while -1 shows perfect negative correlation. However, perfect correlations do not exist and if you come across one, it should be doubted.
Suppose the two variables were being recorded and measures and a high degree of correlation existed, it would provide useful information to the management to run the business better.
Correlation is often confused with causation. This may or may not be the case in reality. Just because we have the statistics to show that the two variables tend to move in tandem does not mean that we have proof that one causes the other. Implying causation could lead to inadvertent losses.
Correlation must be used only when at least one of the variables is under control. This variable will be known as the independent variable. Hence experimenters can vary one variable and record the other variable to determine the extent of the correlation.
Management has to forecast the levels of many variables before they agree on a budget. Correlation helps the management come up with the possible levels of these variables so that accurate budgets can be developed.
Scatter plots provide an important tool for visualization. This is because many times points that are farther away from where most of the points are scattered have the capability of influencing the correlation co-efficient which is the summary statistic. To avoid errors which may prove to be costly scatter plots are used.
A scatter plot is a set of X and Y axes. One variable is given the x axis and the other one is given the y axis. Each point on the graph has a value corresponding to the x and y axis i.e. both the variables. In case of 3 dimensional or multivariate analyses, more axes are introduced. However such visualizations are complex and require the use of complex software.
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