In fast pace digital world where business has gone even more competitive and risky, the need is of predictable strategic methodologies. Design of Experiment (DOE) is one such strategic method that provides strategists a road map to condition their business process. It is a systematic method to improve business activity.
How it happens, how DOE help managers improve their business. This is one question in our focus, determining how much effectively DOE impacts a business, in the contemporary world where uncertainty and competition are two unavoidable factors.
What is Design of Experiment (DOE)?
Design of Experiment is a statistical method to breakdown factors affecting a process. It is one method to isolate inputs from outcome of a process. DOE is a systematic toolkit to recognize most influential factors in process, knowing how alternative strategy could be designed to improve those factors, improving overall process efficiency and outcome.
DOE talks about relationship between influential factors. It visualizes the cause-and-effect relationships in order to improve the process stages. Each stage of process could be modified, improved using DOE strategic identification. What factors are causing more problem and which should be managed more statistically is all done using DOE.
Design of Experiment for Business Process Improvement
There are mainly two types of factors that affects a business process, extrinsic factors and intrinsic factors. Extrinsic factors are those which impact from outside of the business environment. Intrinsic factors describe instinct of a business, they describe the very nature of how a business proceeds and transgresses. At the first stage, Design of Experiment identifies and recognizes these two type of influential factors. It helps managers understand the influence on business from both outside and inside.
The following is how Design of Experiment outlines the influence on business:
The following above factors are considered as influence on business. They form comprehensive business environment. After identification of influence, the next step is to apply the DOE model for improvement.
Design of Experiment (DOE) to boosting Business Process
1. Identification of Business Problem – Asking an Empirical Question:
Design of Experiment in business begins from asking an empirical question, a question that could be answered conducting an experiment. How our performance management system reduces our annual employee turnover rate? How much our performance management system increases employee motivation? How employee motivation increases organizational performance are all empirical questions that DOE could start investigating.
2. Adapting Change for Observation:
Let’s consider example of a retail store which introduces new brochures to make customers aware about their special discount offers. They may first use small brochures with attractive taglines to understand if customers understand them well. Small brochures with attractive taglines would make the test case. The experiment could be designed in accordance for observation. DOE helps businesses adapt the change and see if this change could be implemented producing desired outcomes “customers start buying discounted offers”.
Consider the Interactions
The greatest advantage of Design of Experiments over traditional experiments is its allowance of analyzing the synergized impacts of the various factors on the responses. When many factors are in play together, finding out the combinations of factors that manage to inflict the most affect is crucial.
The team needs to carefully prioritize the interactions they want to test. If you are using DOE software, it is best to run the experiment for all the possible interactions of factors.
Determining alternatives in Observation
If customers are unable to acknowledge your special discount offers, let’s try larger brochures with small attractive taglines. This is second alternative or a new adaptive strategy. This is how DOE assists in creating, assessing and proposing the change needed in business. DOE assists in framing the new strategic change to receive desired business outcome.
Design of Experiment helps managers improve three segments of business which are people, process and technology. These three are managed with influence during DOE. People are the most important to be managed as from people influences are carried away to processes and technology. If the workforce is managed with change, change is inevitable in processes and technology of the business. Managing these three streams of business during DOE could boost the overall business process, the business outcome.