Quality at Source

Manufacturing Systems Analysis

Professor: Nour El Kadri

e-mail: nelkadri@ site.uottawa.ca

What is Quality?

Quality: The ability of a product or service

to consistently meet or exceed customer
expectations.
Not something tacked on, but an integral part
of the product/service.
Comes from the fundamental process, not
from material or from inspection

What does a customer perceive

as quality
Performance
Aesthetics
Features
Conformance
Reliability
Durability
Perceived quality (eg: reputation)
Serviceability

Expectations
Customers perceptions and expectations shift
and evolve:
With product life cycle:
Features & functionality are critical in a leadingedge hi-tech product
Reliability, durability, serviceability are critical in a
mature product
With an evolving industry, market or technology
(cf: Quality & the Ford Model T)

Why is Quality Important?

Quality is:
A critical basis of competition (ie: A critical
differentiator)
Critical to SC effectiveness (Partners demand
objective evidence of quality measures,
programs)
A measure of efficiency & cost saving
(Quality does not cost anything)
NB: Quality as one key identifier of a HighPerformance company

Cost of Quality
Prevention Costs: All training, planning, customer
assessment, process control, and quality
improvement costs required to prevent defects from
occurring
Appraisal Costs: Costs of activities designed to
ensure quality or uncover defects
Failure Costs: Costs incurred by defective
parts/products or faulty services.
Internal Failure Costs: Costs incurred to fix problems that
are detected before the product/service is delivered to
the customer.
External Failure Costs: Costs incurred to fix problems that
are detected after the product/service is delivered to the
customer.

Consequences of Poor Quality

Liability
Loss of productivity
Loss of business:
Dissatisfied customers will switch
You usually wont know why (<5% of dissatisfied
customers complain)
He will cost you addl business (Average
dissatisfied customer will complain to 19 others)

The Evolution of Quality

Management
Craft production: Strict craftsman concern
for quality
Industrial revolution: Specialization,
division of labour. Little control of or
identification with overall product quality

SPC (Statistical Process Control)

Sample mean
value
0.13%

Upper control limit

99.74%

Normal
tolerance
of
process

Process mean

Lower control limit

0.13%
0

Sample number

Quality Control Charts

Definitions

Variables Measurements on a continuous scale, such as

length or weight
Attributes Integer counts of quality characteristics, such
as # of good or bad
Defect
A single non-conforming quality characteristic,
such as a blemish
Defective A physical unit that contains one or more
defects

Types of Control Charts

Data monitored

Mean, range of sample variables

Individual variables
% of defective units in a sample
Number of defects per unit

Chart name
MR-CHART
I-CHART
P-CHART
C/U-CHART

Sample size
2 to 5 units
1 unit
at least 100 units
1 or more units

Control Factors
n
2
3
4
5

A
2.121
1.732
1.500
1.342

A2
1.880
1.023
0.729
0.577

D3
0
0
0
0

D4
3.267
2.574
2.282
2.114

d2
1.128
1.693
2.059
2.316

d3
0.853
0.888
0.880
0.864

Control factors are used to convert the mean of sample ranges

( R ) to:
(1) standard deviation estimates for individual observations,
and
(2) standard error estimates for means and ranges of samples
For example, an estimate of the population standard deviation
of individual observations (x) is:
x = R / d2

Control Factors (cont.)

Note that control factors depend on the sample size n.

Relationships amongst control factors:

A2 = 3 / (d2 x n1/2)
D4 = 1 + 3 x d3/d2
D3 = 1 3 x d3/d2, unless the result is negative, then D3 = 0
A = 3 / n1/2
D2 = d2 + 3d3
D1 = d2 3d3, unless the result is negative, then D1 = 0

Mean-Range control chart

MR-CHART
1. Compute the mean of sample means ( X ).

2. Compute the mean of sample ranges ( R ).

3. Set 3-std.-dev. control limits for the sample means:
UCL = X + A2R
LCL = X A2R
4. Set 3-std.-dev. control limits for the sample ranges:
UCL = D4R
LCL = D3R

Control chart for percentage defective

in a sample P-CHART
1. Compute the mean percentage defective ( P ) for all samples:
P = Total nbr. of units defective / Total nbr. of units sampled
2. Compute an individual standard error (SP ) for each sample:
SP = [( P (1-P ))/n]1/2
Note: n is the sample size, not the total units sampled.
If n is constant, each sample has the same standard error.
3. Set 3-std.-dev. control limits:
UCL = P + 3SP
LCL = P 3SP

Control chart for individual

observations I-CHART
1. Compute the mean observation value ( X )
X = Sum of observation values / N
where N is the number of observations
2. Compute moving range absolute values, starting at obs. nbr. 2:
Moving range for obs. 2 = obs. 2 obs. 1
Moving range for obs. 3 = obs. 3 obs. 2

Moving range for obs. N = obs. N obs. N 1

3. Compute the mean of the moving ranges ( R ):
R = Sum of the moving ranges / N 1

Control chart for individual

observations I-CHART (cont.)
4. Estimate the population standard deviation (X):
X = R / d2
Note: Sample size is always 2, so d2 = 1.128.
5. Set 3-std.-dev. control limits:
UCL = X + 3X
LCL = X 3X

Control chart for number of defects

per unit C/U-CHART
1. Compute the mean nbr. of defects per unit ( C ) for all samples:
C = Total nbr. of defects observed / Total nbr. of units sampled
2. Compute an individual standard error for each sample:
SC = ( C / n)1/2
Note: n is the sample size, not the total units sampled.
If n is constant, each sample has the same standard error.
3. Set 3-std.-dev. control limits:
UCL = C + 3SC
LCL = C 3SC

Notes:
If the sample size is constant, the chart is a C-CHART.
If the sample size varies, the chart is a U-CHART.
Computations are the same in either case.

SPC & Cost of Quality

Deming (Promoted SPC in Japan):
The cause of poor quality is the system, not the
employee
Mgmt is responsible to correct poor quality

Juran (Cost of Quality: Emphasized need for

accurate and complete identification of the
costs of quality) :
Quality means fitness for use
Quality begins in knowing what customers want,
planning processes which are capable of producing
the required level of quality

From Quality to Quality Assurance

Changing emphasis from Quality to Quality
Assurance(Prevent defects rather than finding
them after they occur)

New techniques for Quality Improvement (eg:

TQM, Six Sigma):
New quality programs (Provide objective
measures of quality for use of customers, SC
partners, etc.)

Baldridge Award
ISO 9000/14000 Certification
Industry-specific programs (eg: TL9000(Telecom))

Correlation:
Strong positive
Positive
x Negative
* Strong negative
Competitive
evaluation
x = Us
A = Comp. A
B = Comp. B
(5 is best)
1 2 3 4 5
x
AB
x AB
x AB
A xB
x A
B

x
x

Reduce energy
to 7.5 ft/lb

Acoustic trans.,
window

Energy needed
to open door

B xA

BA
x

7
5
3
3
2

Importance weighting

10

Target values

Technical evaluation
(5 is best)

Check force on
level ground

Easy to close
Stays open on a hill
Easy to open
Doesnt leak in rain
No road noise

Reduce force
to 9 lb.

Customer
requirements

Door seal
resistance

Engineering
characteristics

Maintain
current level

5
4
3
2
1

B
A

BA
x

B
A
x

B
x
A

Relationships:
Strong = 9
Medium = 3
Small = 1

Source: Based on John R. Hauser

and Don Clausing, The House of
Quality, Harvard Business Review,
May-June 1988.

Taguchi analysis
Loss function
L(x) = k(x-T)2
where
x = any individual value of the quality characteristic
T = target quality value
k = constant = L(x) / (x-T)2

Average or expected loss, variance known

E[L(x)] = k(2 + D2)
where
2 = Variance of quality characteristic
D2 = ( x T)2
Note: x is the mean quality characteristic. D2 is zero if the mean
equals the target.

Taguchi analysis (cont.)

Average or expected loss, variance unkown
E[L(x)] = k[ ( x T)2 / n]
When smaller is better (e.g., percent of impurities)
L(x) = kx2
When larger is better (e.g., product life)
L(x) = k (1/x2)

TQM

Total Quality Management: A philosophy that

involves everyone in an organization in a
continual effort to improve quality and achieve
customer satisfaction.
The TQM Approach:
Find out what the customer wants
Design a product or service that meets or exceeds
customer wants
Design processes that facilitates doing the job right the
first time
Keep track of results
Extend quality initiatives to include suppliers &
distributors.

Elements of TQM
Continual improvement
Competitive benchmarking
Employee empowerment (eg: Quality circles, etc.)
Team approach
Decisions based on facts
Knowledge of tools
Supplier quality
Identify and use quality champion
Develop quality at the source
Include suppliers

Criticism of TQM
Criticisms of TQM include:
Blind pursuit of TQM programs
Programs may not be linked to strategies
Quality-related decisions may not be tied to
market performance
Failure to carefully plan the program

Obstacles to Implementing TQM

Poor inter-organizational communication
View of quality as a quick fix
Emphasis on short-term financial results
Internal political and turf wars
Lack of:

Company-wide definition of quality

Strategic plan for change
Customer focus
Real employee empowerment
Strong motivation
Time to devote to quality initiatives
Leadership

Six Sigma

Six Sigma (eg: Jack Welch @ GE):

Statistically: Having no more than 3.4 defects
per million
Conceptually: A program designed to reduce
defects

Six Sigma programs

Improve quality, save time & cut costs
Are employed in a wide variety of areas (Design,
Production, Service, Inventory , Management,
Delivery)
Focus on management as well as on the technical
component
Requires specific tools & techniques
Require commitment & active participation by sr
management to:
Provide strong leadership
Define performance metrics
Select projects likely to succeed

Six Sigma Programs

Select and train appropriate people
The team includes top management & program
champions as well as master black belts, Black
belts & Green belts
A methodical, five- step process: Define, Measure,
Analyze, Improve, Control (DMAIC)

Process Capability Analysis

1. Compute the mean of sample means ( X ).
2. Compute the mean of sample ranges ( R ).
3. Estimate the population standard deviation (x):
x = R / d2
4. Estimate the natural tolerance of the process:
Natural tolerance = 6x
5. Determine the specification limits:
USL = Upper specification limit
LSL = Lower specification limit

Process capability analysis (cont.)

6. Compute capability indices:
Process capability potential
Cp = (USL LSL) / 6x
Upper capability index
CpU = (USL X ) / 3x
Lower capability index
CpL = ( X LSL) / 3x
Process capability index
Cpk = Minimum (CpU, CpL)

Multiplicative seasonality
The seasonal index is the expected ratio of actual data
to the average for the year.
Actual data / Index = Seasonally adjusted data
Seasonally adjusted data x Index = Actual data

Multiplicative seasonal adjustment

1.

Compute moving average based on length of seasonality (4

quarters or 12 months).

2.

Divide actual data by corresponding moving average.

3.

Average ratios to eliminate randomness.

4.

Compute normalization factor to adjust mean ratios so they

sum to 4 (quarterly data) or 12 (monthly data).

5.

Multiply mean ratios by normalization factor to get final

seasonal indexes.

6.

Deseasonalize data by dividing by the seasonal index.

7.

Forecast deseasonalized data.

8.

Seasonalize forecasts from step 7 to get final forecasts.

Additive seasonality
The seasonal index is the expected difference
between actual data and the average for the year.
Actual data - Index = Seasonally adjusted data

Seasonally adjusted data + Index = Actual data

Additive seasonal adjustment

1.

Compute moving average based on length of seasonality

(4 quarters or 12 months).

2.

Compute differences: Actual data - moving average.

3.

Average differences to eliminate randomness.

4.

Compute normalization factor to adjust mean differences so

they sum to zero.

5.

Compute final indexes: Mean difference normalization

factor.

6.

Deseasonalize data: Actual data seasonal index.

7.

Forecast deseasonalized data.

8.

Seasonalize forecasts from step 7 to get final forecasts.

How to start up a control chart system

1.

Identify quality characteristics.

2.

Choose a quality indicator.

3.

Choose the type of chart.

4.

Decide when to sample.

5.

Choose a sample size.

6.

Collect representative data.

7.

If data are seasonal, perform seasonal adjustment.

8.

Graph the data and adjust for outliers.

How to start up a control chart system

(cont.)
9. Compute control limits
10. Investigate and adjust special-cause variation.
11. Divide data into two samples and test stability of limits.

12. If data are variables, perform a process capability study:

a. Estimate the population standard deviation.
b. Estimate natural tolerance.
c. Compute process capability indices.
d. Check individual observations against specifications.
13. Return to step 1.

Quick reference to quality formulas

Control factors
n
2
3
4
5

A
2.121
1.732
1.500
1.342

A2
1.880
1.023
0.729
0.577

D3
0
0
0
0

D4
3.267
2.574
2.282
2.114

d2
1.128
1.693
2.059
2.316

d3
0.853
0.888
0.880
0.864

Process capability analysis

x = R / d2
Cp = (USL LSL) / 6x
CpL = ( X LSL) / 3x

CpU = (USL X ) / 3x
Cpk = Minimum (CpU, CpL)

Quick reference to quality formulas

(cont.)

Means and ranges

UCL = X + A2R
LCL = X A2R

Percentage defective in a sample

SP = [( P (1-P ))/n]1/2

UCL = P + 3SP
LCL = P 3SP

Individual quality observations

x = R / d2

UCL = D4R
LCL = D3R

UCL = X + 3X
LCL = X 3X

Number of defects per unit

SC = ( C / n)1/2

UCL = C + 3SC
LCL = C 3SC