This document discusses a case study on applied statistics in business management in Spain. It aims to demonstrate how statistical engineering can help companies improve decision-making. The researchers identified 4 key drivers that may impact a company's use of analytical tools: data-based competitive advantage, management support for data analysis, systematic thinking, and communication outside the company. They surveyed 255 Spanish companies to analyze how these drivers relate to the companies' level of adoption of analytical tools. The researchers applied concepts of statistical engineering by integrating multiple statistical tools to extract relevant information from the dataset. This included designing a questionnaire, analyzing the results using 7 statistical tools, and concluding that different statistical methods can be complementary.
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JSM 2012 statistical engineering study case barcelona spain
1. APPLIED STATISTICS ON BUSINESS
MANAGEMENT AT SPAIN. A CASE OF
STATISTICAL ENGINEERING
Igor BARAHONA
&
Alex RIBA
igorbarahona@hotmail.com 1
2. 匍鰻意檎或禽雨遺意鴛或鰻
Motivation
What is it done?
THE METHODOLOGY
DISCUSSION
REFERENCES
2
3. 匍鰻意檎或禽雨遺意鴛或鰻
Motivation
What is it done?
THE METHODOLOGY
DISCUSSION
REFERENCES
3
4. MOTIVATION
The big motivation for this research is:
To help Companies to improve their decision
making by promoting the use of statistical tools
To understand how a set of 4 key-drivers are related
with better analytic performance in companies.
To demonstrate how the Statistical Engineering is a
powerful approach for the successful integration of
several statistical tools.
To provide another documented case of Statistical
Engineering, that was made using data from the real
world.
5. 匍鰻意檎或禽雨遺意鴛或鰻
Motivation
What is it done?
THE METHODOLOGY
DISCUSSION
REFERENCES
5
6. WHAT IS IT DONE?
Porter (1998)
1 We are introducing 4 key-drivers for the expansion of
the Level of Adoption of Analytical Tools (LAAT)
McDonough III.
(2000)
Checkland
1. Data-Based Competitive Advantage. (DB-CA) (1999)
2. Management Support on Data Analysis. (MS-DA)
3. Systematic Thinking. (SYS) Davenport &
4. Communication Outside the Company. (COM-OUT) Harris (2010)
We are proposing a 5-level scale to measure the
2 LAAT at companies.
1. Statistical Ignorance. Davenport. &
2. Local Focus. Harris (2007)
3. Statistical Aspirations.
4. Statistical Engineering.
5. Statistics as Competitive Advantage.
We are applying the concepts of Statistical
3 Engineering to extract relevant information from
the dataset Statistical
Deming (2000)
Thinking Hoerl & Snee
1. The starting point is a survey with 255 responses. (2010)
2. One questionnaire with 21 items was designed.
3. Seven statistical tools were used and integrated. Statistical Engineering
4. With this is clear that different statistical tools are
complementary rather than exclusive.
Statistical Methods and Tools
7. 匍鰻意檎或禽雨遺意鴛或鰻
Motivation
What is it done?
THE METHODOLOGY
DISCUSSION
REFERENCES
7
8. This scale was used for classifying Statistics as
each surveyed company
5competitive
advantage
4 Statistical
Engineering DM
ASBM is an
3 Statistical
aspirations
DM
ASBM impact
decision making at
important toolkit
for maintaining
the leadership at
the market
2 Local
focus
DM
The beginning of the
ASBM as competitive
strategic, tactical and
operational levels
GOALS
Maintaining the
DM
1 Statistics
ignorance ASBM supports only
specific tasks and
local impact
advantage. GOALS
strengthening the
interaction between
leadership
through creating
new and better
GOALS three levels ways to analyse
DM (strategic, tactical
Maintain and data
Based on past GOALS and operational)
improving the
experience, Improving emerging system by
judgements and interaction between Systems
working on the Key Systems
under uncertainty functional areas at Innovation and
Drivers Analysis of all types
company leadership in the
GOALS to understand
current and future
market, but as
Having data of Systems
Systems results. Consolidate well in the
quality and improve Predictions and
Local systems, e.g. the Business creation metrics
datasets forecasts of all types,
Return over intelligent systems. and indicators.
measurement of
Systems Investment (ROI), intangibles as brand To make from the
Statistical Process equity and human ASBM a competitive
None Control (SCP) capital. advantage
9. From literature review we It was sent to 6460 companies at THE ROADMAP
defined 4 key-drivers Barcelona, Spain. 255 responses
received
A questionnaire was
designed based on the
key-drivers The Statistical Engineering
concept is applied on the
data analysis
How to best utilize
statistical concepts,
methods and tools and
integrate them with
information technology to Conclusions and
generate improved discussion
results
Hoerl & Snee (2010) 9
10. THE FLOWCHART
This is a 5 steps methodology and is BASED ON STATISTICAL ENGINEERING concepts, as is
shown in the following figure.
DATA BASED.
COMPETITIVE
ADVANTAGE Understanding Flowchart 1
projects scope
MANAGEMENT
Survey design and Operational Definition (DO) * 2
collect data
SUPPORT ON Principal Component Analysis
DATA ANALYSIS
APPLIED
STATISTICS ON
BUSINESS
Applying the scale Bar Chart 3
at companies Box plots
MANAGEMENT
(ASBM)
Relationships Factorial Analysis 4
SYSTEMATIC
between
THINKING Correspondence Analysis
companies
Relationships Correlation matrix
between key- 5
COMMUNICATION drivers Logistic regression
OUTSIDE
COMPANY
Final conclusions. 10
11. GETTING DATA FROM THE REAL WORLD
This is the questionnaire s structure
There are 5 sections and 21 ITEMS in the questionnaire,
as it is shown in the following table:
number of
section ITEMS
General information about the company 4
Data Based Competitive Advantage 5
Management Support Data Analysis 6
Systemacic Thinking 5
Comunication outside the company 1
Total 21
5-level Likert scale was used on the 17 ITEMS
https://www.surveymonkey.com/s/ASBM 11
13. QUESTIONNAIRE DESIGN
In order to support our conceptual model, the 17 items were clustered on
the first 4 factors using the loadings as classification criteria
Rotated Component Matrixa
Component
MS-DA DB-CA SYS COM-OUT
DB-CA. Data-Based Competitive
1 2 3 4
Advantage
DB-CA2 .766
DB-CA3 .851
DB-CA4 .707
DB-CA5 .570 .614
MS-DA. Management Support
MS-DA1 .837 on Data Analysis
MS-DA2 .753
MS-DA3 .635 .523
DB-CA1 .595 .584 SYS. Systemic Vision of the
MS-DA4 .831 business
MS-DA5 .644 .400
SYS1 .433 .595
SYS2 .754 COM-OUT. Communication
SYS3 .739 Outside company. (clients and
SYS4 .630 .528 suppliers)
COM-OUT .904
MS-DA6 .561
SYS5 .430 .519 .534
Extraction Method: Principal Component Analysis. Rotation Method:
Varimax with Kaiser Normalization.
PCA gave us a quantitative foundation to support our conceptual model 13
14. APPLYING THE SCALE
Cum. Cum. 7% L1
Level Freq Percent 25% L2
Freq Percent
1 65 25.5 65 25.5 20% L3
L4
2 38 14.9 103 40.4
L5
3 83 32.6 186 72.9
4 52 20.4 238 93.3
5 17 6.7 255 100.0 15%
33%
83
65
52
38
17
L1 L2 L3 L4 L5
Communication outside the Companies at Level 3 are the
company is highest Key- biggest group
Drivers
15. FACTOR ANALYSIS
The 255 responses were discomposed
and represented at the 2 biggest factors
15
18. FACTOR ANALYSIS
Services Companies are more suitable to be
analytical oriented
Products Companies are more related with level 1
and Micro size
18
19. FACTOR ANALYSIS
Middle size companies are closer to better and
different strategies.
There is a group for Micro-size, Products, Level 1
and No Competitive Advantage
19
20. CORRELATION MATRIZ ANALYSIS
C.M allows us to understand and quantify relationships between the Key Drivers
Pearson Correlation Coefficients
DBCA MSDA SYS COMOUT
DBCA. Data Based
Competitive Advantage
1.000 0.70243 0.69484 0.05246
MSDA. Management
support data analysis
1.000 0.64852 -0.03397
SYS. Systematic Thinking 1.000 0.30036
COMOUT. Communication
Outside Company
1.000
DB.
COMPETITIVE
ADVANTAGE
0.695 0.702
SYSTEMATIC MANAGEMENT
THINKING SUPPORT. DA
0.648
0.300
COMMUNICATION
OUTSIDE
COMPANY
20
21. LOGISTIC REGRESSION
To predict of a set of 255 Spanish companies, either a company has analytics
aspirations or not. (Level=>4)
Level 4 is the starting point of the use of data and statistics as a distinctive
competence in the industry
RESPONSE VARIABLE:
Y =0 If the company does not has analytical aspirations. (Level<4)
Y =1 If the company has analytical aspirations. (Level>=4)
PREDICTORS NO ANALYTICAL ANALYTICAL
ASPIRATIONS. (LEVEL ASPIRATIONS TOTAL
1 , 2AND 3) (LEVEL 4 AND 5)
G1 Understanding the benefits of Statistics
186 69 255
G2 Statistics builds the Comp. Adv 73% 27% 100%
G3 There is one mission and vision
The predictors were
taken from the
G4 Communication with clients and suppliers
questionnaire ITEMS
21
22. PROPORTIONAL ODDS
THE MODEL
錚 P 錚
Ln錚 錚 = 硫 0 + 硫 i G1 + 硫 j G2 + 硫 k G3 + 硫 l G4 +竜 (ijkl )
錚 1 P 錚
Logistic Regression Table
Odds 95% CI have p-values less than 0.05,
Predictor Coef SE Coef Z P Ratio Lower Upper indicating that there is
Constant -17.8045 3.13596 -5.68 0.000
DB_CA1 1.65439 0.313537 5.28 0.000 5.23 2.83 9.67
sufficient evidence that the
DB_CA3 0.723906 0.271505 2.67 0.008 2.06 1.21 3.51 coefficients are not zero using
SYS2 1.12321 0.273354 4.11 0.000 3.07 1.80 5.25 an alfa level of 95%
COM_OUT 1.54055 0.382019 4.03 0.000 4.67 2.21 9.87
Goodness-of-Fit Tests The goodness-of-tests, with
Method Chi-Square DF P p-value equal to 1.000.
Pearson 105.652 111 0.625 Indicate that there is
Deviance 72.350 111 0.998 insufficient evidence to
Hosmer-Lemeshow 4.405 8 0.819 claim that the model does
not fit the data adequately.
1. UNDERSTANDING THE BENEFITS OF APPLIED STATISTICS BUSINESS.
Coefficients for 2. BUILDING A COMPETITIVE ADVANTAGE BY DATA ANALYSIS.
these variables
3. ESTABLISHING A MISSION AND VISION STATEMENTS FOR THE COMPANY
are not cero.
4. STIMULATING COMMUNICATION OUTSIDE COMPANY.
22
23. 匍鰻意檎或禽雨遺意鴛或鰻
Motivation
What is it done?
THE METHODOLOGY
DISCUSSION
REFERENCES
23
24. STATISTICAL ENGINEERING
DISCUSSION
A set of 7 statistical tools
were applied in this research
Different statistical tools can
be successfully integrated, in
order to extract relevant
information from a unique
problem
With this, It was
demonstrated that several
statistical tools can be
complementary rather than
exclusive
Hoerl & Snee The three previous points are
(2010) the core philosophy of the
Statistical Engineering.
24
25. 匍鰻意檎或禽雨遺意鴛或鰻
Motivation
What is it done?
THE METHODOLOGY
DISCUSSION
REFERENCES
25
26. REFERENCES
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Checkland, P. (1999). "Systems Thinking, Systems Practice: Includes a 30-Year Retrospective". Wiley; 1 edition, New York USA
Cronbach, L. J. (1951). "Coefficient alpha and the internal structure of tests" Psychometrika. 16, 297-334.
Davenport, T, and Harris, J. (2010) "Analytics at Work: Smarter Decisions, Better Results". Harvard Business School Press ,
Boston USA
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Press , Boston USA"
Deming, W.E. (2000). "Out of the Crisis". The MIT Press, Boston USA
Ghemawat, P (2007). "Redefining Global Strategy: Crossing Borders in a World Where Differences Still Matter". Harvard
Business School Press, Boston USA
Hoerl, R.W and Snee R.D. "Closing the gap: Statistical Engineering can bridge statistical thinking with methods and tools" , May
2010, pp. 52-55, Quality Press
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Engineering, (22), 2010, pp 119-129
Hoerl, R.W and Snee R.D. (2001). " Statistical Thinking: Improving Business Performance". Duxbury Press; 1er edition, CA USA
Poon, P., and C.Wagner. "Critical success factors revisited: success and failure cases of information systems for senior
executives," Decision Support Systems, (30:4), 2001, pp. 393-418
Porter, M. (1998). "Competitive advantage : creating and sustaining superior performance". Free Press, New Yorw USA
Roberts, H. "Applications in Business and Economic Statistics: Some Personal Views", Statistical Science, (5:4), 1990, pp. 399-
402
Stainberg, D.M., "The Future of industrial statistics: A panel discussion", Technometrics, (50:2), 2008, pp103-127
Wang, Y.R., Kon, B.H and Madnick, S.E, "Data Quality Requirements Analysis and Modeling", the Ninth International
Conference of Data Engineering, Vienna, Austria, April 1993, pp 670-677
Wang, R.Y and Strong, D. M. "Beyond accuracy: What data quality means to data consumers", Journal of Management
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Yeo,K. "Systems thinking and project management time to reunite," Int.J.Project Manage, (11:2), 1993, pp 111-117
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