The first live presentation of this webinar was so popular that we’re doing an encore presentation! Join us for this 1-hour advanced webinar where we answer the question, “Why do we need hypothesis tests in process improvement?” and then stay with us as we walk you through a real, live hypothesis test direct from the Bahama Bistro!

1. How to Set Up and Run
Hypothesis Tests (ENCORE!)
Presented by Elisabeth Swan

2. About Our Presenter
• Managing Partner at
GoLeanSixSigma.com
• Co-Author of
The Problem-Solver’s Toolkit
• Co-host of the
Just-In-Time Café Podcast
Elisabeth Swan
/ElisabethSwan
@ConsultSwan
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3. How to Interact
Answer Polls! Ask a Question!
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4. Where Are You From?
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5. Our Mission and Core Values
Mission: Revolutionize the way people learn process
improvement - making it easy for everyone
everywhere to build their problem-solving muscles
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other to create a constant
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6. We’ve Helped People From…
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7. Learning Objectives
After attending this webinar you will be able to:
• Define the purpose of Hypothesis Tests
• Describe where they can be used to support
Continuous Improvement
• Create Null and Alternative Hypothesis
Statements
• Use the Hypothesis Decision Tree to select
appropriate tests
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8. Today’s Agenda
• What are Hypothesis Tests?
• Why do we need them in process improvement?
• When should we use them?
• How do we set up and run them?
• Any words of advice?
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9. What Are Hypotheses?
Hypothesis: An assumption made in order to
draw out or test its logical consequence.
• Assumptions result when observing, reviewing, or
documenting the process
• Hypothesis testing is a formal way to test those
assumptions with data
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10. Poll #1
How have you used Hypothesis Tests?
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A. To verify a root cause
B. To verify that the solution made a difference
C. To test the guarantee made by a vendor/supplier
D.I haven’t tried to use one yet

11. Examples of Product Assumptions
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Suppliers making claims about their products?
Prevagen
improves
memory in
90 days
Swiffer is 3x
more effective
than a broom
Sketchers
sneakers make
you lose
weight

12. But, Is There a Difference?
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13. Why Do We Need Hypothesis Tests?
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The Red Bead Experiment
10% Red Beads
Redbead.com

14. Sample 2
Why Do We Need Hypothesis Tests?
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2,000 beads – what % are red?
Sample 1

15. Are These Things Related?
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Good
Cholesterol
Amount of wine
consumed Life
Expectancy
Amount of
education
achieved

16. Two Types of Testing
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Correlation
Differences

17. Applying to Process Improvement
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Order
AccuracyY
Day of the
weekX
# of items
on the
order
X
Time of day
orderedX
# of
customer
returns
X
# of special
request
items
X

18. Applying to Process Improvement
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Y = ƒ(x1, x2…xn)
?

19. Verify root
cause
When Should We Run Them?
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Is it truly
a root
cause?

20. The Testing Process
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1. Practical
Problem
5. Practical
Conclusion
2. Statistical
Problem
3. Analysis
4. Statistical
Conclusion

21. General Hypothesis
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1. Practical
Problem

22. Bahama Bistro Example
• Problem – Cannot keep up with hot sauce
demand. 16% of the time, customers cannot
get the hot sauce they want
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I swear the
Downtown location
is part of this.
Let’s find out!

23. Formal Hypothesis Statements
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1. Practical
Problem
2. Statistical
Problem

24. Why Null and Alternative Hypotheses?
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25. Null and Alternative Theories
A HA! –
There’s a difference!
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Ho Hum –
There’s no difference
Try to “reject”
the Null
Then we can pursue
the Alternative

26. Formal Hypothesis Statements
Null: There is no difference between the
average hot sauce sales at the Downtown
location and the Beachfront location
• μ1 = μ2
Alternative: The average hot sauce sales
at the Downtown location are not equal
to the average sales at the Beachfront
location
• μ1 ≠ μ2
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27. Hypothesis Testing
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1. Practical
Problem
2. Statistical
Problem
3. Analysis

28. Hypothesis Test Decision Tree
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29. If Continuous – Is It Normal?
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30. P-Value
P
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Probability of the
Null Hypothesis
being true
< .05 = Low

31. If Continuous – Test for Normality
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Both Data Sets Are Normal

32. Hypothesis Test Decision Tree
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33. Poll #2
What are you testing?
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A. Comparing two or more defect rates
B. Comparing two or more cycle times
C. Checking if two things correlate
D.Other
E. Not sure yet

34. Gather the Hot Sauce Sales Data
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35. Perform the Test
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36. 36

37. Selecting the Data
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38. 38

39. Test Results
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40. Poll #3: Mini-Quiz
In which case would you
reject the Null Hypothesis?
A. P-Value = .210
B. P-Value = .061
C. P-Value = .045
D.P-Value = .500
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41. Poll #3: Mini-Quiz
In which case would you
reject the Null Hypothesis?
A. P-Value = .210
B. P-Value = .061
C. P-Value = .045 – Correct answer!
D.P-Value = .500
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42. Accept or Reject the Null
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1. Practical
Problem
2. Statistical
Problem
3. Analysis
4. Statistical
Conclusion
P

43. Statistical Conclusion
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If the P is low
– the Null
must go –
AHA!

44. Confidence & Risk
Confidence Level
• 95% Confidence
Risk of being wrong?
• 5%
What happens if you’re wrong?
• Reject the Null when there really is no
difference
• Accept the Null when there is a difference
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Standard
“I’m 95% confident that the inferences I’m
making based on testing these samples are correct”

45. Practical Conclusion
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1. Practical
Problem
5. Practical
Conclusion
2. Statistical
Problem
3. Analysis
4. Statistical
Conclusion

46. Update Hypothesis Testing Plan
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47. The Need for Hypothesis Tests
• Potential for fixing the wrong root cause
• Risk of implementing improvements that
make no difference
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48. Poll #4
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Who here has ever:
A. Addressed a root cause that was not a critical “x”?
B. Fixed a process and saw no positive results?
C. Watched as others based fixes on assumptions?
D.Experienced some combination of the above?
E. Experienced none of the above?

49. Why Use Tests?
Define/Measure Phase – Verifying Standards (Tests
Optional)
Analyze Phase – Verifying Root Cause (Tests Required):
• Used to determine differences and correlations
• This is required for Black Belt Certification
Improve Phase – Verify Solutions (Tests Optional)
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50. Any Words of Advice?
• Clarify the practical problem
• Use the Decision Tree
• Set up the Null and Alternative Hypotheses Statements
• Remember you are looking for:
• A difference between particular strata
(Who, What, Where, When)
• Correlation between the Y and a particular X
• Check the P-Value
• Use Hypothesis Tests to verify “Xs” for root cause –
required for Black Belt Certification
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51. Today We Covered
• What are Hypothesis Tests?
• Why do we need them in process improvement?
• When should we use them?
• How do we set up and run them?
• Any words of advice?
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52. Questions?
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53. Getting Started
Learn more by starting some more training!
• White Belt Training & Certification (Training is FREE)
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• Black Belt Training & Certification
• Lean Training & Certification
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20% discount on all courses!
*Expires June 28, 2019
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54. Go-Getter Membership
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• 20% discount on ALL
of your purchases!
$199 for 1 year access
GoLeanSixSigma.com/ggm/

55. The Problem-Solver’s Toolkit
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• Paperback and Kindle
versions available on
Amazon
• The Problem-Solver’s
Toolkit

56. Upcoming Webinar: June 27, 11am PT
Register today at GoLeanSixSigma.com/webinars
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so please share your feedback on the survey at the end of
close of this webinar.
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57. Just-In-Time Cafe Podcast
Tune in at GoLeanSixSigma.com/cafe for the latest
Lean Six Sigma news, easy ways to apply Lean Six Sigma and
interviews with process improvement leaders like you!
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58. Questions?
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59. Thank You for Joining Us!
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