Quality Management

Ravindra S. Gokhale IIM Indore

Quality Philosophies

Deming, Juran, and Crosby: Comparison and Contrast

Definitions of quality

Deming reduced variation Juran fitness for use

Five aspects - design, conformance, availability, safety, field use

Crosby zero defects

Deming, Juran, and Crosby: Comparison and Contrast

Cost, productivity, and competitive success

Deming lower costs, improved productivity, better competitive

success
Juran cost of quality to gather the attention of top management

Crosby quality is free stressed on defect prevention

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Deming, Juran, and Crosby: Comparison and Contrast

Quantitative measures and standards

Deming statistical process control Juran measure and quantify as much as possible
conformance, risk of injury, cost of quality

Crosby more emphasis on motivation rather than measurement

Deming, Juran, and Crosby: Comparison and Contrast

Responsibility of different people upper management, quality professionals, worforce

Deming worker management relationship

Workers must be capable of problem solving after training them properly

Juran quality professionals play a central role

Quality professionals should assist top management with planning, measurement, and problem solving

Crosby training and motivating the workers, but may not solve the problems themselves however all three experts opined that ultimately it is the responsibility of the upper management
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Deming, Juran, and Crosby: Comparison and Contrast

Target for improvement

Deming and Crosby

Need for ongoing pursuit of zero defects as a goal

Juran quality professionals play a central role

Cost of Quality concept suggests that it is increasingly costly to take the final steps towards perfection

Deming, Juran, and Crosby: Comparison and Contrast

Underlying management philosophies

Deming worker will finally produce quality goods

Stress on worker pride and satisfaction

Juran rely on systems, problem solving, and measurements

Managing from top-down

Crosby importance on training, motivation, and rewards

Setting goals for workers

Deming, Juran, and Crosby: Comparison and Contrast

Key tools

Deming Statistical Process Control (SPC)

More suitable where technical data can be gathered on products produced in large volumes

Juran Cost of quality computations

Practically difficult to implement

Crosby Management Maturity Grid

Limited by high amount of generalizations and subjectivity

Deming, Juran, and Crosby: Comparison and Contrast

Acceptability and Limitations

Deming - addresses issues related to high volume and assembly

Little attention paid to the redesigning of products from customers point of view

Juran multifaceted approach right from design to field service

Can an aircraft company afford to use the Cost of Quality approach?

Crosby Best suited to a company that is people driven to change attitudes

Rely to heavily on leadership and motivation Lack of exact measures
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Deming, Juran, and Crosby: Common Themes

Quality should not be a policing function

There must be defect prevention oriented programs

Organization wide efforts Long term commitments Fundamental shift in traditional organizational priorities from quantity to quality Readiness to adopt new techniques

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The Cost of Quality

Numerical Example
BestWrite Pen Company in India sources the rolling-balls for its ball-point pens from a local supplier. The unit cost of the rolling-balls is INR 50, and the company receives 10,000 rolling-balls in each box. The retail price of the pen in the Indian market is INR 250.

The pen making process consists of four major stages; Machining, Assembly, Testing and
Final Inspection. The associated costs for each of the four stages are as given below (all figures are in INR).

Operation Number 1 2 3 4

Description

Labor cost per pen

Overhead cost per pen 6 5

Total cost per pen 11 9

Machining Assembly Testing Final Inspection

5 4

1 piece is tested in every 10 pieces and the consolidated cost of testing is 5 per piece. 2 1 3
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The Cost of Quality

Numerical Example (cont)
Typically, 100 pens are scrapped after the Final Inspection stage due to varied reasons. Nevertheless, due to sampling technique adopted in the Testing stage, it is observed that 150 defective pens are getting delivered to the customers. The company incurs an additional cost of INR 100 while replacing the defective pen for a customer. In order to stop defective pens from reaching the customers, the company is considering introducing an Intermediate Inspection stage between Assembly and Testing. The labor and overhead cost for this stage is INR 2 each. Analyze if it is economical to introduce this inspection stage.

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Seven Basic Quality Control Tools

14

Preamble Simple techniques to: Track quality performance and trends Identify the existence of quality problems Analyze and gain insights into the causes and sources of

quality problems
Figure out which problems to address Help eliminate quality problems

The List
Flowcharts: process mapping to identify the sequence of activities or flow of materials/ information in a process. Control Charts: a graph with data plotted over time and which also includes control limits.

Checksheets: simple tools for data collection, ensure

completeness. Histograms: graphically represent frequency of values within a specified group.

The List
Pareto Diagrams: separate the vital few from the trivial many causes; provide direction for selecting projects for improvement. Cause-and-Effect Diagrams: represent chain of relationships; often called a fishbone diagram.

Scatter Diagrams: graphical component of regression analysis.

Flowchart

Start/ Finish

Operation

Operation

Decision

Operation

Operation

Operation

Decision

Start/ Finish

Control Charts

Checksheet

Histogram
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20 15

1 0 5 0
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34

70
60 Percent from each cause 50 40 30 20

Pareto Diagrams
(64)

(13) 10 0

(10)
(6) (3) (2) (2)

Causes of poor quality

Cause and Effect Diagrams

Measurement
Faulty testing equipment Incorrect specifications Improper methods

Human
Poor supervision Lack of concentration

Machines
Out of adjustment

Tooling problems
Old / worn

Inadequate training

Inaccurate temperature control

Quality Problem
Defective from vendor Not to specifications Poor process design Ineffective quality management Deficiencies in product design

Dust and Dirt

Materialhandling problems

Environment

Materials

Process

Scatter Diagrams

Control Charts

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Types of Control Charts

Control charts for variables (examples)

X-bar chart R-chart

Control charts for attributes (examples)

p-chart and np-chart c-chart and u-chart

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Control Charts for Variables Mainly there are two types:

X-bar chart R-chart

Generally they are used together Based on the assumption of normality

Control Charts for Attributes Mainly there are two types: p-chart - For variables that are categorical
good/bad, yes/no, acceptable/unacceptable Based on the binomial distribution

c-chart For the number of defects in a unit or a sample

Based on the Poisson distribution

p-Charts Based on a binomial distribution

UCLp = p + 3
p = n =

p(1 - p) n

LCLp = p - 3

p(1 - p) n

mean fraction defectives in one sample sample size

The plot consists of points indicating fraction defectives sample-by-sample

Note - When the sample size varies for each sample (ni), then for each ith sample, individual limits are computed based on ni. Also, in that case, p-bar is given by:

d
i1 g i1

where, di = number of defectives in the ith sample ni = sample size of the ith sample

ni

np-Charts
Alternative to the p-chart Based on the count of non-confirming items instead of proportion

Not possible with variable sample sizes, since the center line also
changes UCLnp = np + 3
where

np(1 - p)

LCLnp = np - 3

np(1 - p)

p = mean fraction defective in the sample n = sample size

c-Charts Charts for total number of non-conformities in units Based on a Poisson distribution

UCLc = c + 3

LCLc = c - 3

where, c-bar = mean number of defects (not defectives) in one unit Notes: A c-chart can only be used when the unit of sample (example: area of opportunity for defects) is constant. If that changes, then we need to use the u-chart A unit in case of c-charts is a pre-defined sample size. For example, a sample of 100 circuit boards can be one unit of sample

u-Charts
Similar to c-chart, but used when the sample size varies for across different units
g

ci ui ni

and u

c
i 1 g i 1

where, ci = number of defects in the ith sample ni = sample size of the ith sample

u UCLu u 3 ni
where

u LCLu u 3 ni

u = mean number of defects per unit

The plot consists of uis sample-by-sample

Examples of Application of c-chart and u-chart

A department manufactures only one variety of circuit boards. A control chart is to be used for the number of defects per 100 circuit boards. 20 samples (every sample consists of 100 circuit boards each) are collected and the number of defects per samples are noted. Determine whether the process is in control. [This is an example of the c-chart]

A branch of a bank wants to determine whether the number of transactional errors it makes (in a month) for its saving bank accounts is under control or not. For this it collects a data on the number of transactional errors on each account for 12 months. Determine whether the process is under control or not. [This is an example of the u-chart]

Examples of Application of c-chart [Circuit Board Example]

Sample #
1 2 3 4 5 6 7

# of nonconfirmities
21 24 16 12 15 5 28

Sample #
8 9 10 11 12 13 14

# of nonconfirmities
20 31 25 20 24 16 19

Sample #
15 16 17 18 19 20

# of nonconfirmities
10 17 13 22 18 39

Examples of Application of c-chart [Circuit Board Example Minitab Output]

C Chart of Number of non-confirmities
40
1

UCL=33.08 30

Sample Count

20

_ C=19.75

10 LCL=6.42
1

0 1 3 5 7 9 11 Sample 13 15 17 19

Examples of Application of u-chart [Bank Branch Example]

Month # of SB Accounts
500 480 425 520 600 560

# of Transaction Errors
8 6 4 5 6 12

Month

# of SB Accounts
650 610 580 590 620 650

# of Transaction Errors
10 15 8 6 9 10

1 2 3 4 5 6

7 8 9 10 11 12

Examples of Application of u-chart [Bank Branch Example Minitab Output]

U Chart of Number of transactional errors
0.035 0.030 UCL=0.02880

Sample Count Per Unit

0.025 0.020 0.015 0.010 0.005 0.000 1 2 3 4 5 6 7 Sample 8 9 10 11 12 LCL=0.00038 _ U=0.01459

Tests performed with unequal sample sizes

Process Capability Analysis

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Process Capability
Represents the performance of a process in the state of statistical control Total variability that exists due to the presence of common causes only Process capability analysis Estimates the process capability Good process capability assures uniformity of output and overall benefits

Process Capability Metrics (For Short Term Capability)

The Cp index
Cp = [(USL LSL)]/[6]
where, USL = Upper specification limit and LSL = Lower specification limit

Note 1: This is used for a two sided specification limit. For a single sided specification limit, use the appropriate index from Cpu and Cpl. In these cases, Cpu = [(USL mean)]/[3] and Cpl = [(mean LSL)]/[3] Note 2: The estimate for can be obtained from (R-bar/d2) for a short term process

capability

Process Capability Metrics (For Short Term Capability)

The Cpk index
min [Cpu, Cpl]
Denotes how well the process is centered

Process Capability Metrics (For Long Term Capability)

Denotes the capability of a process for a longer term
As against the capability for a shorter term

Cp index is replaced by the Pp index Cpk index is replaced by the Ppk index

The formulas for computing remain essentially the same

Except that the estimate of is obtained from the sample standard deviation