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By Sourabh Jain MBA 2010 - 2012 National Institute of Technology Karnataka, Surathkal, India

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Preface
This is a PowerPoint file I created in order to help me in my studies. The material in these slides are a distilled version of the literature from 2 books 1. Total Quality Management 3rd Edition Besterfield, Michna, Besterfield, Sacre. 2. Total Quality Management Bharat Wakhlu
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HOME
Introduction Customer Satisfaction Leadership Employee Involvement

Continuous Process Improvement QMS

Performance Measures SPC

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Introduction

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Quality
Degree to which a set of characteristics fulfils requirements. Q=Performance/Expectations TQM; T = Total i.e. company-wide, suppliers, customers; M = Management i.e. art of directing and controlling
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inherent

Quality q and Total Quality Q


Product orientation Ensure produced goods are fit for sale No prevention, No learning

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Quality q and Total Quality Q


Customer/Process/Product orientation Listen to customer, product design, process optimized Right the first time, every time; Learning; importance of internal customers

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Dimensions of Quality
Dimension Meaning

Performance
Features Conformance

Primary product characteristics


Added features Meeting standards

Reliability
Durability Service

Consistency of performance
Useful life Resolution of complaints

Response
Aesthetics Reputation
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Human to human interface


Sensory characteristics Past performance
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Total Quality
1. Performance Superiority 2. Delight customers

3. Provide value (value=quality/cost)


4. Doing the right things 5. Right the first time
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Definition of TQM
TQM is the art of managing the whole to achieve excellence. TQM is a philosophy and a set of guiding principles that represent the foundation of a continually improving firm. It is the application of quantitative methods and HR to improve all processes within a firm and exceed customer needs now and in the future.
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6 basic concepts of TQM


1. Committed and involved management to provide long term- top to bottom organizational support Unwavering focus on the customer internal and external

2.

3.
4.

Effective involvement and utilization of entire workforce


Continuous improvement of business and production process

5.
6.

Treat suppliers as partners


Establish performance measures for processes
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Culture changes for TQM


Quality element OLD CULTURE TQM CULTURE

Definition
Priorities Decisions

Product oriented
Second to service and cost Short term

Customer oriented
Equal to service and cost Long term

Emphasis
Errors Responsibility

Detection
Operations Quality Control

Prevention
System Everyone

Problem Solving
Procurement Managers Role
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Managers
Price Plan, assign, control, enforce
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Teams
Life cycle costs, Partnership Delegate, coach, facilitate, mentor

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Model for TQM


Outstanding Leadership Product, Services and Process Systems and Procedures People power

MEETING/ EXCEEDING CUSTOMER EXPECTATIONS


BENCHMARKING

CONTINUOUS SYSTEMATIC IMPROVEMENT

CUSTOMER FOCUS

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Paradigms of TQM
Belief that people are a potential source of beneficial forces will lead to total quality Functional and Hierarchical divisions of a firm contribute to parochial thinking not good

Everyone has to participate in obtaining total quality


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Gurus of TQM
Shewhart 1. Economic Control of Quality of Mfg product 2. Control Chart Theory 3. Assignable and chance causes of variation 4. Rational Subgroups 5. PDSA cycle

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Gurus of TQM
Deming 1. Out of the Crisis 2. Quality, Productivity and Competitive Position 3. 14 points to improve q,p,c 4. Taught SPC and quality to Japanese

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Gurus of TQM
Juran 1. Jurans Quality control Handbook 2. Project Improvements based on ROI 3. Promoted commitment to quality at all levels 4. Juran Trilogy Planning, Control, Improvement

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Gurus of TQM
Feigenbaum 1. Total Quality Control 2. Customer Satisfaction 3. Genuine Management Involvement 4. Employee Involvement 5. Company wide total quality control 6. First line supervision leadership
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Gurus of TQM
Ishikawa 1. SPC texts in Japanese and English 2. Adapted TQC i.e. TQM in Japan 3. Fishbone diagram 4. Quality circles

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Gurus of TQM
Crosby 1. Quality is Free 2. Quality without tears 3. Do it right the first time 4. Zero defects

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Gurus of TQM
Taguchi 1. Loss Function 2. Quality Engineering 3. Robust design of parameters/tolerances

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Obstacles to TQM
1. 2. 3. 4. 5. 6. 7. 8. 9. Lack of management commitment Inability to change organization culture Improper planning Lack of continuous training and education Incompatible Org structure & isolated departments and individuals Ineffective measurement techniques Paying inadequate attention to customers Inadequate use of empowerment and teamwork Failure to continually improve
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Benefits of TQM
Improve quality Employee participation and satisfaction Teamwork and Working relationships Customer satisfaction Productivity Communication Profitability and Market Share
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Leadership

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Leader
A leader 1. Shapes 2. Promotes 3. Protects 4. Exemplifies the organizations values

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Manager vs. Leader


Manager Plan Organize Leadership for quality (Outstanding leadership) EXPOSE limited utility of current approaches ENVISION the future

Staff
Lead Control Feedback
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ENLIST others in the quest


EMPOWER them to act ENCOURAGE right effort EXEMPLIFY by personal action
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Leadership Style

Leads to time bomb situations

Best style

FEARFUL STYLE

RIGID STYLE

WHOLESOME STYLE

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Characteristics of Quality Leaders


1. Priority attention to internal/external customers 2. Empower, rather than control subordinates 3. Emphasize improvement, rather than maintenance 4. Emphasize prevention 5. Encourage collaboration rather than competition 6. Train and coach, rather than direct and supervise
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Characteristics of Quality Leaders


7. Learn from problems 8. Continually try to improve communications 9. Continually demonstrate their commitment to quality 10. Choose suppliers on basis of quality, not price 11. Establish organizational systems to support quality effort 12. Encourage and Recognize team effort
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7 habits of highly effective people


1. 2. 3. Be proactive - dont let fate control you, you control it Begin with the end in mind have a vision and plan Put first things first learn to prioritize

4.
5. 6. 7.

Think win-win seek mutual benefits


Seek first to understand, then be understood Synergy teams are better than individuals Sharpen the saw renew ones physical, spiritual, mental and emotional dimension

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Deming Philosophy
Create and publish aims/purpose of firm Learn the new philosophy Understand purpose of inspection Stop awarding business on price alone Improve constantly and forever the system

Institute training
Teach and institute leadership
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Deming Philosophy
Drive out fear, create trust and a climate for innovation Optimize efforts of teams, groups and staff areas Eliminate exhortations for the work force Eliminate numerical quotas for workforce and MBO Remove barriers that rob people of pride of workmanship

Encourage education and self-empowerment for everyone


Take action to accomplish the transformation
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Customer Satisfaction

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Customer Satisfaction Model

Company Offer Satisfier

Customer Needs

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Notes
Customer Internal and External is the focus. Customer Satisfaction is subjective, hence hard to measure Customer Satisfaction should not be viewed in a vacuum

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Customer feedback
1. To discover customer dissatisfaction 2. Discover relative priorities of Quality

3. Compare performance with competition


4. Identify customers needs 5. Determine opportunities for improvement
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Modes of feedback
1. 2. 3. 4. Comment card Service industry Customer Questionnaire mail, telephone Focus groups like a GD Toll free telephone numbers complaints

5.
6. 7. 8. 9.

Customer visits B2B


Report card send to customer every quarter The internet blogs Employee feedback why problem? Mass customization variety at affordable cost
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Customer Complaints
Complain to Management 1%

Action

Shout at Front Line Employees 19%

Do nothing 80%

Every complaint should be accepted, analyzed and acted upon because those who dont complain might have switched loyalty.
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Handling complaints
Accept feedback Empower front-line employees to resolve More inspection does not solve it; find the root cause Communicate complaint to everyone in firm Contact complainant and put mind at ease Be proactive about customer needs
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Employee Involvement

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Motivation
Maslows Hierarchy of needs Herzbergs 2-factor theory What employees want 1. Interesting Work 2. Appreciation 3. Involvement 4. Job Security
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Achieving a motivated work force


1. Know thyself

2.
3. 4. 5. 6. 7. 8.

Know your employees


Establish a +ve attitude Share goals Monitor progress Develop interesting work Communicate effectively Celebrate success
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Employee Surveys
1. 2. Quality Council creates Survey team Develop instrument (questionnaire).Constructs to be used are
1. 2. 3. 4. Personality Characteristics Management Styles Job attitudes The work

3.

Administer survey (confidential and by 3rd party)

4.
5.

Compile and analyze (report is circulated in firm)


Determine areas for improvement
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Suggestion Systems
Management must make it easy for employees to suggest improvements 1. Be progressive regularly ask employees

2. Remove fear focus on the process, not the person


3. Simplify the process 4. Respond quickly - accept/Reject/Refer giving time or reason

5. Reward the idea


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Performance Appraisal
Purpose 1. Tells employee how they are performing 2. Basis for promotions and increments 3. Counseling 4. Opportunities Employee involvement is critical and appraisals must be continuous. Types Ranking, Narrative, Forced, Graphic
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Problems with appraisal systems


1. Emphasis on short term performance 2. Individual appraisals destroy teamwork 3. A person is only about 15 % responsible for his results 4. Based on subjectivity and immeasurables
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Improving the appraisal system


1. Use rating scales with fewer rating categories

2. Equal emphasis to individual and group appraisals


3. More frequent performance reviews with focus on improvement 4. Promotion decision to be based on current performance AND potential for new post

5. External customer satisfaction a part of the process


6. 360 degree appraisals
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Benefits of employee involvement


Employees 1. Make better decisions using expert knowledge of process 2. More likely to implement and support decisions they had a part in making/better able to accept changes 3. Better able to spot pinpoint areas for improvement

4. Better able to take immediate corrective action


5. EI increases morale, improves industrial relations and increases commitment to unit goals
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Continuous Process Improvement

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Juran Trilogy Plan, Control, Improve


Planning 1. Determine external and internal customers 2. Identify their needs and translate into requirements 3. Develop product/service as per needs of not only customer but other stakeholders too

4. Develop processes able to produce product/service


5. Transfer plans to operations ensuring process validity
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Juran Trilogy Plan, Control, Improve


Control 1. Determine items to be controlled and their units of measure 2. Set goals for controls and determine what sensors are needed 3. Measure actual performance

4. Compare it with goals


5. Act on the difference
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Juran Trilogy Plan, Control, Improve


Improvement Quality council identifies improvement areas and establishes project teams to work on it

Quality Control (during operations)


50
40 30
Original Zone of Quality Control

Sporadic Waste

QUALITY PLANNING

20 10 0

Chronic Waste

0
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5 6 Time FEEDBACK Sourabh Jain Cost of poor Quality

FEEDBACK

New Zone of Quality Control Quality Improvement

10

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PDSA Cycle
Plan

Act

Do

Study
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Problem Solving method


1 Identify Opportunity

7 Plan for Future

2 Analyze Process

6 Standardize solution

3 Develop Optimal Solution (s)

5 Study the results


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4 Implement
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1 Identify Opportunity
Identify problem Pareto analysis, Survey, Brainstorm, proposals Form team QC forms a multifunction team if required

Define scope scope, goals, milestones

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2 Analyze Process
Develop Process Flow diagram Define target performance measures Relevant Data collection Fishbone diagram
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3 Develop Optimal Solution (s)


Brainstorm create new process/combine different process/modify existing process Evaluate Test solutions using control charts criteria: feasibility, scope, training and effects

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4 Implement
Prepare implementation plan Obtain approval Implement process improvements

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5 Study the results


Monitor and evaluate the change Check if fine tuning is needed If dissatisfied with results, repeat some phases

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6 Standardize solution
Positrol (Positive control) ensures important variables are kept under control Process Certification Operator Certification

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7 Plan for Future


Regular reviews of progress by QC Knowledge Management System save learnings Repeat Phase 1.

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Kaizen
Process of continuous improvement in small increments without complex technology or high costs making processes better

Uses concepts like: Value/Non value added activities, Mudas, Motion studies, SOP, 5S, Visual Management, JIT etc
5S Sort, Simplify, Sweep, Standardize, Sustain
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Six Sigma
Uses Cp analysis as a way to measure progress We should reduce the process variability to keep process centered on the target . Process Capability Index = USL-LSL/6

Process Performance Index Cpk = min(USL-X,X-LSL)/3


Default Cp >1, Cpk =1
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Performance Measures

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Strategy
QC creates a total system of measures using info from stakeholders and firms VMG and values Ex: Quality % reduction in nonconformities % of certified suppliers

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Strategy
Cost % increase in inventory turnover % increase in output dollars per employee Similarly for innovation (NPD time), reliability (% processes having Cp=2), flexibility(setup time) etc. Tracked monthly to show trends, identify problems and allocate resources Depts create mechanisms and authorities to capture this data
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Performance Measure Presentation


1. Time series graph (Time in days, weeks etc) 2. Control charts (R,Xbar)

3. Capability Index
4. Taguchi Loss Function 5. Cost of poor quality 6. Malcolm Balridge National Quality Award
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Quality Costs
Those costs associated with the nonachievement of product or service quality as is required Quality cost programs quantifies this cost

Use Pareto analysis to find major cost drivers

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Quality Costs
Preventive cost: Cost used up in preventing recurrence of some failure. Ex: Customer surveys, Product testing, Quality audits Appraisal cost: Cost of assuring acceptability of product. Ex: laboratory support, measuring equipment, certifications

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Quality Costs
Internal Failure Cost: cost to evaluate, dispose off, & either correct or replace nonconforming products prior to customer delivery. Ex: rework and scrap, poor supply materials, internal failure labor loss External Failure Cost: After delivery. Ex: returned goods, updates, warranty claims, penalties, lost sales, liabilities, goodwill
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Malcolm Balridge National Quality Award


Leadership Strategic Planning Customer and Market focus Information and Analysis HR Focus Process Management Business Results
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110 80 80 80 100 100 450


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Quality Management System

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QMS
Registration under ISO involves assessment and periodic surveillance audit of the adequacy of a suppliers quality system by a 3rd party

Benefits of ISO 1. Customers are demanding compliance 2. To improve processes/systems 3. Global deployment of products 4. Snowball effect
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ISO 9000
Generic in nature It has 3 standards ISO 9000:2000 QMS fundamentals/vocabulary ISO 9000:2000 QMS requirements ISO 9000:2000 QMS guidelines for performance improvement

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ISO 9001 requirements


1. 2. 3. 4. 5. 6. 7. 8. Scope Normative reference Terms and Definitions QMS General Reqs and Documents Management Responsibility Resource Management Product Realization Measurement, Analysis and Improvement
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Process based QMS


5 Management Responsibility

6 Resource Management

4 QMS Continual Improve ment

8 Measurement Analysis and Improvement

Customer Satisfaction

Input Require ments


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7 Product Realization

Output Product
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Implementation
1. Top management commitment 2. Appoint management representative 3. Awareness 4. Appoint implementation team 5. Training 6. Time Schedule 7. Select element owners 8. Review present system 9. Write the documents 10. Install the new system 11. Internal audit 12. Management review 13. Preassessment 14. Registration 11/30/2013 Sourabh Jain

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Documentation
Policy
What will be done and why ?

Procedures

Who, When, Where

Work Instructions Proof


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How

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Statistical Process Control

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Introduction
SPC is a technical tool for improving product and service quality. Pareto Diagram Process Flow Diagram Cause and Effect Diagram Check Sheets Histogram
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Pareto Diagram
Vital few and the useful many Ranks data classifications in descending order

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Pareto Diagram
Solving 50 % of vital few is better and easier than 50 % of useful many Never ending process

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Process Flow Diagram

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Cause and Effect Diagram


Brainstorming essential. 4 or more likely causes determined by voting

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Cause and Effect Diagram


Wide scope for application Encourages participation and contribution by everyone Diagrams posted in key locations to stimulate continued reference

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Check Sheets
For ease of data collection Customized for situation

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Histograms
Graphically estimates Cp, relationships to specifications and target, shape of population and gaps in data Graphical and analytical

Ungrouped and Grouped data (for large data)

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Normal curve
Larger the Std Dev, flatter the curve (less data)

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Types and Causes of variation


Types 1. Within piece 2. Piece to piece 3. Time to time Causes 1. Equipment 2. Material 3. Environment 4. Operator
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Variable Control Charts

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Process Capability
= Rbar/d2 Cp = (USL-LSL)/6 USL-LSL=tolerance X X Cpk = min{(USL-Xbar) or (Xbar-LSL)}/3
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Cp and Cpk
1. Cp value does not change as process center changes 2. Cp=Cpk process is centered 3. Cpk<=Cp 4. Cpk>1 process conforms to specifications 5. Cpk<1 process not conforms to specifications 6. Cp<1 process not capable 7. Cpk=0 average =USL or LSL 8. Cpk <0 average outside specifications
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Scatter diagrams
For correlations

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BLUE OCEAN STRATEGY

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