Q. 128  A consensus driven guess or SWAG is a part of Lean Terminology. Knowing fully well that we are taking a risk of wrong decision, are SWAGs unavoidable? Give example(s) to support your response. 

 

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SWAG or Consensus Guess are purely avoidable as this is the base for running a LEAN SIX SIGMA concept. MSA is the tool to assess the potential risk and Highlight the same to all Stake Holders on the Decision's impact which is based on the Consensus Guess.

 

Example can be as Below;

 

Management thinks that introducing a WMS will increase Productivity in Warehousing Operations - This is Guess

A MSA is run and following Outcome are found;

 

The Cost of Implementation is soo much that it will Impact COGS

Implementing WMS will attract Opex Cost for which Business is not ready at this moment

Trained and skilled workers are required to operate the automation

It has a potentiality to Slow the Operations Speed in high Peak Season due to non availability of Resource or Infrastructure

 

Later it was found that requirement is to categorise the Warehouse, Concept wise and each shipment whether In or Out needs to be traceable.

 

The above example is a clear case where implementing WMS looks a better option from Management or a Decision makers group's perse but After a MSA the potential risk got highlighted and while use of DMADV the new process came into existence

 

 

SWAG i.e. scientific Wild-Ass Guess is a terminology often used for instances when estimates / decisions are made from general logic or assumptions.
These assumption / decision are often made by experts or senior stakeholders from past experience. These decisions some times backed by recent instances / data point estimates (generally samples), though they are all in words.
SWAG is unavoidable within organizations considering, firstly, scientific assessments through appropriate data require efforts and time which is not always possible in all scenarios. 
Secondly, they are mostly made by senior stakeholders who may not prefer scientific data assessment all times.

SWAG references to a rough estimate made by experts in their field, based on experience and intuition. The decisions are driven by a combination of factors including

a. Past Experience
b. General Impressions and Assumptions &
c. Approximate calculations 

 

It can be simply summarized as an "educated guess" and are best made by consensus within a group of experts.With a group of experts working on a problem, it often results in decisions driven by the factors mentioned above despite any incomplete information around the business problem. Theoretically any decision made with 25-50% information can fall under SWAG category. 

 

SWAG can act as a good starting point to provide any estimate, presumably in a shorter time period and at low cost, if applicable. 

Example 1 - if I as a customer ask a building contractor on the estimated cost and time  to construct a 1 BHK House, he can provide the information during the course of our conversation basis his experience, certain assumptions and approximate calculations  on a ball park cost figure and timeline estimation. This in-turn can help me as a customer to plan ahead with a certain hedge in cost and timelines before we make any  agreement on construction commitments.

Example 2 - W.R.T Services or IT industry, estimated time to deploy a pre-existing software for Dept. B which has already been implemented in Dept. A

Example 3 - W.R.T Services or IT industry, estimated FTE required to complete a task based on projected workload 

 

In above examples, with a group of experts, basis their expertise, SWAG approach can help to build a straw-man to plan their work ahead

 

Limitations of SWAG - While SWAG can help set certain basic directions, we need to be extremely careful on limiting its use on few scenarios..

a. If your business problem statement has high risk involved, better to have an exhaustive search, proof, or rigorous calculation to provide the required levers for decision making.
e.g. Designing of any life safety devices in an automobile cannot work on guesstimates but rather it has to be addressed in a more scientific and full proof method despite we have a set of experts working on it.

b. If your business case is not pressed for time and calls for a proper planning, SWAG is not your tool.
e.g. If you need to plan and present your annual budget for 2020, you need to take a more methodical, systematic and comprehensive approach to present the same rather than going with a guesstimate story. 

SWAG is a part of terminology. its a consensus driven guess which is based on small amount of factual evidence.In any organization at some point of time we rely on SWAG's in decision making process which is actually a gut feeling and based on past experience but not all evidence. Its a risk taking decision but not avoidable because now a days hard deadlines are their to finish any project or any work. Normally during planning phase people have sufficient time for problem solving as they have proper time for data collection and its analysis and based on analysis they give decision regarding any problem or any solution to work upon. 

 

A decision based on SWAG and a reasonable decision both lies on same line. There is very thin line which is blurry to differentiate them on  the same line. Because all these decisions are based on imperfect decision and gut feeling of decision makers. as per their experience they used to take decision to work for better result.

 

for example in a tier 1 or tier 2 company which are small scale in which people wants to transfer products from one machine to another to eliminate wastage of time and  increase productivity of line but they dont have any method to transfer except manually and for automation needs lot of money to spend which is out of budget . so decision makers decided to design and make a system which works according to gravitational effect and with the help of rollers they designed some trolley which transfer products automatically from one machine to another so by taking this decision it was not well planned but worked well to eliminate their losses. 

 

 

                            Benchmark Six Sigma Expert View by Venugopal R

 

In Lean Six Sigma Approach, during the Analyze phase, we have an exercise to come up with Potential causes and similarly during the Improve phase, an exercise to come up with Possible solutions. Subjective methods such as 'Subjective Rating and Ranking, Cause and Effect matrix etc. are used for coming up with the potential causes. Likewise, for identifying possible solutions, Brainstorming and Creative thinking are applied. It is quite possible that during these exercises we would come across many ideas that might be ‘wild guesses’ based on the individual’s historical experiences and intuitions. Many a time such ideas and thoughts will trigger lateral thinking and shape up into ‘out of the box’ thinking. However, the Lean Six Sigma approach has got its own checkpoints to verify and validate both at the cause identification stage and at the solution identification stage to filter out such ideas. The second level of cause/solution identifications are based on statistical methods that will have to show significant response. Thus decisions involving major time, efforts, cost or customer risk, should not be taken just based on the ‘wild guess’ approach, but has to be ratified based on the statistical validations.

 

On the other hand, there are situations where, decisions that were believed to be taken based on strong scientific thought process have been proven wrong once implemented, when proceeded without subjecting to a suitable statistical validations.

 

Thus, I would conclude that ‘guess driven’ ideas may not be avoidable in Lean Six Sigma, however, expensive risks of wrong decisions getting implemented can be largely controlled by subjecting to appropriate validations with sound statistical basis.

The chosen best answer is that of Prashanth Datta. He clearly outlines what the term means, situations under which an educated guess or SWAG is made, and provides examples of situations when it can be used and caution on when it must not be used. 

 

Please also read the expert view given by Venugopal R.