Statistical process control

Too often, finance professionals manifest a smug sense of superiority towards their peers in manufacturing. In this third column in a series, David Rowe argues that when it comes to operational risk management, the manufacturing sector has much to teach financial institutions. Statistical process control is a good case in point

For much of the modern industrial era, business professionals have tended to set themselves apart from ‘intellectuals’. They viewed themselves as men (and more recently women) of action who didn’t have time for academic hair-splitting. A well-known example occurred in 1908 when William Gosset discovered what we now know as the Student’s t distribution. The name derives from the fact that his employer, Guinness Brewery, would not allow him to publish his findings under his own name. As a result