What is the Concept of Confidence Interval in Statistics?

Consider a process that is generating a certain output (like cycle time) that can be characterized by a certain statistical parameter (like average cycle time).

Suppose you are interested in determining the value of this parameter for the entire population. So how would you go about it?

You start with selecting a sample and measuring the value of the parameter using the sample data.

The question that arises then is how to estimate the population parameter from the sample parameter value.

That’s where confidence interval can come to your rescue.

Confidence interval is a statistical interval estimate of the population parameter that is derived from the sample parameter value.

Type I / Alpha Error or Producer’s Risk and Type II / Beta Error or Consumer’s Risk

Think of a manufacturer that supplies certain electronics component to its consumers. The components, before they are shipped, undergo final inspection by the team assigned for the purpose.

This team needs to make the call whether to ship the component or not by doing an inspection.

This situation can be viewed as being similar to a test of hypothesis. The null hypothesis (Ho) in this case is that the component is not defective.

Ho: Component is not defective (and hence good)

H1: Component is defective

Suppose the team can make error in their judgment in determining whether the component is defective or otherwise.

Why Genuine Commitment to Operational Excellence is Crucial?

First of all, genuine commitment is as different from commitment as the sun is different from the moon.

Genuine commitment is like the sun which has its own, real shine unlike commitment which is like the moon which doesn't have its own shine.

Like the shine of a moon is fake, so is the shine of commitment which is not genuine.

In many organizations the sponsors  lack genuine commitment but try to fake it.

This is evident through the following:

• Person charged with operational excellence is forced to report into someone who doesn't even know how to spell operational excellence
• Adequate resources and budgets are not allocated to the operational excellence leader and she is made to work with skeletal resources
• The organization is managed by a coterie which takes zero accountability of compliance and operational excellence in their respective areas
• Some of the people in the coterie go and say funny things to the top man behind the back of the operational excellence leader
• Some of the people in the coterie instead of reaching out to the operational excellence leader for help make immature and unprofessional statements regarding support they want
• The pet stooge of the top man in such organization is like a monkey to its master, a silent politician, an immature professional, a scheming expert in sending negative emails and super defensive of his lack of competence
• The pet stooge is a also a master of loyalty, chummy with other chipmunks like him roaming the corridors of the organization for many, many years
• The coterie comes across as a gang of retirement home residents who cannot move out but think they are the most accomplished people in their areas, forgetting that no one knows them outside the premises of their organization
• The coterie operates in a sly, immature and unprofessional manner, goes out to lunch together, and walks together while talking silly things

Such organizations are ideal breeding grounds of fake commitment.

The top man and his coterie try their best to fake the genuineness of their commitment but its easy to make out what's underneath their facade. Just commitment but no genuine commitment.

Culture of genuine commitment is crucial for operational excellence to be successful in any organization.

Such kind of culture building is a gradual, slow and evolutionary process and an important ingredient of operational excellence initiatives in an organization.

And unless the commitment is genuine, operational excellence initiatives will not have much chance to succeed.