Using XmR Charts 

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The key problem in evaluating data and the changes that occur from month to month is recognizing when a change is a true signal that a fundamental shift may be occurring.  An important method of determining whether a change is a fundamental shift is to map your data on a XmR chart (observation(X), moving Range (mR) chart). 

The XmR chart is a control chart the purpose of which is to see if a variation is due to chance or to a potential fundamental change in the process. Every metric will exhibit some kind of change from month to month. Normal or controlled variation is normally stable and consistent over time. Uncontrolled variation are points that are out of bounds of the consistent limits  and cannot be due to chance. These represent a potential fundamental shift that should be investigated and explained.

An XmR chart has two parts; A chart that shows the individual values for a metric and a chart showing the absolute value of the changes in the moving range. The individual values chart will show the values for the metric, together with the overall average and the  lower natural process and upper natural process. In a stable or normal situation changes that occur from month to month will remain between the upper and lower limits. The lower and upper control limits are calculated by using the moving range associated with the metric values. The upper control limit is the average of the observations plus a constant times the average moving range. The lower limit is the average minus a constant times the average moving range.  The constant has some dependencies but in most cases will be 2.66.

An XmR chart for  a cost per LB metric is shown below 


Using the above we can clearly see September is clearly out of bounds based on our historical price fluctuations. Such an out of bounds point needs to be investigated as soon as it happens to ensure quick and decisive corrective action.  

The Upper Range Limit on the moving range chart also can highlight problematic behavior which should be investigated and explained. Thus in our chart above the costs in November 2014 spiked above the upper range limit. This indicates a change outside the norm requiring investigation. 

XmR charts should be created for each of  your lanes and for all of your metrics from on-time pickup and delivery to all of your cost metrics.

The Sky Blue Logistics MapMetrics program automatically creates XmR charts for all your lanes and all your Metrics. In addition the MapMetrics program automatically informs you of  problem lanes and metrics where fundamental change may be occurring which if no action is taken may become permanent.



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