Gene Denning wears several hats at the Welco Lumber Company, including process improvement team leader, shipping manager, and assistant human resources manager. Welco Lumber makes cedar fencing materials at its Naples, Idaho, facility, employing about 160 people.
More than 75% of the cost of the finished cedar fence boards is in the cedar logs that the company buys on the open market. Therefore, it is very important that the company get as much finished product as possible from each log. One of the most important steps in the manufacturing process is referred to as the head rig. The head rig is a large saw that breaks down the logs into slabs and cants. Figure C-2.3-A shows the concept. From small logs with diameters of 12 inches or less, one cant and four or fewer usable slabs are obtained. From larger logs, multiple cants and four slabs are obtained. Finished fence boards can be produced from both the slabs and the cants.
At some companies, the head rig cutting operation is automated and the cuts are made based on a scanner system and computer algorithms. However, at Welco Lumber, the head rig is operated manually by operators who must look at a log as it arrives and determine how best to break the log down to get the most finished product. In addition, the operators are responsible for making sure that the cants are “centered” so that maximum product can be gained from them.
Recently, Gene Denning headed up a study in which he video-taped 365 logs being broken down by the head rig. All three opera-tors, April, Sid, and Jim, were involved. Each log was marked as to its true diameter. Then Gene observed the way the log was broken Case 2.3 down and the degree to which the cants were properly centered. He then determined the projected value of the finished product from each log given the way it was actually cut. In addition, he also determined what the value would have been had the log been cut in the optimal way. Data for this study is in a file called Welco Lumber . A portion of the data is shown in Table C-2.3-A.

You have been asked to assist Gene by analyzing these data using graphs, charts, and tables as appropriate. He wishes to focus on the lost profit to the company and whether there are differences among the operators. Also, do the operators tend to do a better job on small logs than on large logs? In general, he is hoping to learn as much as possible from this study and needs your help with the analysis.