PowerPoint Slides
by Jeff Heyl
51
Costs of Quality
A failure to satisfy a customer is
considered a defect
Prevention costs
Appraisal costs
Internal failure costs
External failure costs
Ethics and quality
52
Customer
satisfaction
to specifications
Value
Fitness
for use
Support
Psychological
impressions
Employee involvement
Cultural
change
Teams
54
philosophy
Not
unique to quality
Problem
solving process
55
Act
Do
Study
Figure 5.2 PlanDoStudyAct Cycle
56
Six Sigma
Process average OK;
too much variation
X
X
X
X X
X X
XX XX
X
X X
X
Reduce
spread
Process
on target with
low variability
Center
process
X
XX
X
X
X XX
Figure 5.3 SixSigma Approach Focuses on Reducing Spread and Centering the Process
57
Measure
Analyze
Improve
Control
Figure 5.4 Six Sigma Improvement Model
58
Acceptance Sampling
Application of statistical techniques
Acceptable quality level (AQL)
Linked through supply chains
59
Acceptance Sampling
Firm A uses TQM or Six
Sigma to achieve internal
process performance
Buyer
Manufactures
furnaces
fan
Motor inspection
Yes
Accept
motors?
mo
to
rs
Firm A
Manufacturers
furnace fan motors
TARGET: Buyers specs
bla
des
No
Blade inspection
Yes
Accept
blades?
Supplier
Manufactures
fan blades
TARGET: Firm As specs
No
5 11
Sampling Distributions
1. The sample mean is the sum of the observations
divided by the total number of observations
n
x
i 1
where
xi
n
x
5 12
Sampling Distributions
2. The range is the difference between the largest
observation in a sample and the smallest. The
standard deviation is the square root of the
variance of a distribution. An estimate of the
process standard deviation based on a sample is
given by
x x
i
n 1
or
2
x
i
n 1
where
Distribution of
sample means
Process
distribution
25
Time
Causes of Variation
Common causes
Random,
Location
Spread
Shape
Assignable causes
Can
Change
Used
5 15
Assignable Causes
Average
(a) Location
Time
Assignable Causes
Average
(b) Spread
Time
Assignable Causes
Average
(c) Shape
Time
Control Charts
Timeordered diagram of process
performance
Mean
Control Charts
UCL
Nominal
LCL
Assignable
causes likely
1
Samples
Figure 5.8 How Control Limits Relate to the Sampling
Distribution: Observations from Three Samples
5 20
Control Charts
Variations
UCL
Nominal
LCL
Sample number
(a) Normal No action
Figure 5.9 Control Chart Examples
5 21
Control Charts
Variations
UCL
Nominal
LCL
Sample number
(b) Run Take action
Figure 5.9 Control Chart Examples
5 22
Control Charts
Variations
UCL
Nominal
LCL
Sample number
(c) Sudden change Monitor
Figure 5.9 Control Chart Examples
5 23
Control Charts
Variations
UCL
Nominal
LCL
Sample number
(d) Exceeds control limits Take action
Figure 5.9 Control Chart Examples
5 24
Control Charts
Two types of error are possible with control
charts
A type I error occurs when a process is
thought to be out of control when in fact it
is not
A type II error occurs when a process is
thought to be in control when it is actually
out of statistical control
These errors can be controlled by the
choice of control limits
5 25
SPC Methods
Control charts for variables
RChart
5 26


1.880
3.267
1.023
2.575
0.729
2.282
0.577
2.115
0.483
2.004
0.419
0.076
1.924
0.373
0.136
1.864
0.337
0.184
1.816
10
0.308
0.223
1.777
5 27
SPC Methods
Control charts for variables
xChart
UCLx = x + A2R and LCLx = x A2R
where
x =
central line of the chart, which can
be either the average of past sample means or
a target value set for the process
A2 =
constant to provide threesigma
limits for the sample mean
5 28
5 29
5 31
0.5014
0.5022
0.5009
0.5027
0.0018
0.5018
0.5021
0.5041
0.5024
0.5020
0.0021
0.5027
0.5018
0.5026
0.5035
0.5023
0.0017
0.5026
0.5008
0.5034
0.5024
0.5015
0.0026
0.5020
0.5041
0.5056
0.5034
0.5047
0.0022
0.5045
Average
0.0021
0.5027
5 33
Figure 5.10 Range Chart from the OM Explorer x and RChart Solver for the
Metal Screw, Showing That the Process Variability Is in Control
5 34
5 35
Figure 5.11 The xChart from the OM Explorer x and RChart Solver for the
Metal Screw, Showing That Sample 5 is out of Control
5 37
An Alternate Form
If the standard deviation of the process distribution is known,
another form of the xchart may be used:
UCLx = x + zx and LCLx = x zx
where
x
n
x
z
= / n
= standard deviation of the process distribution
= sample size
= central line of the chart
= normal deviate number
5 38
5 39
n
z
= 5 minutes
= 1.5 minutes
= 6 customers
= 1.96
5 40
5 41
Application 5.1
Webster Chemical Company produces mastics and caulking for
the construction industry. The product is blended in large
mixers and then pumped into tubes and capped.
Webster is concerned whether the filling process for tubes of
caulking is in statistical control. The process should be
centered on 8 ounces per tube. Several samples of eight tubes
are taken and each tube is weighed in ounces.
Tube Number
Sample
Avg
Range
7.98
8.34
8.02
7.94
8.44
7.68
7.81
8.11
8.040
0.76
8.23
8.12
7.98
8.41
8.31
8.18
7.99
8.06
8.160
0.43
7.89
7.77
7.91
8.04
8.00
7.89
7.93
8.09
7.940
0.32
8.24
8.18
7.83
8.05
7.90
8.16
7.97
8.07
8.050
0.41
7.87
8.13
7.92
7.99
8.10
7.81
8.14
7.88
7.980
0.33
8.13
8.14
8.11
8.13
8.14
8.12
8.13
8.14
8.130
0.03
Avgs
8.050
0.38
5 42
Application 5.1
Assuming that taking only 6 samples is sufficient, is the process
in statistical control?
Conclusion on process variability given R = 0.38 and n = 8:
UCLR = D4R = 1.864(0.38) = 0.708
LCLR = D3R = 0.136(0.38) = 0.052
The range chart is out of control since sample 1 falls outside the
UCL and sample 6 falls outside the LCL. This makes the x
calculation moot.
5 43
Application 5.1
Consider dropping sample 6 because of an inoperative scale,
causing inaccurate measures.
Tube Number
Sample
Avg
Range
7.98
8.34
8.02
7.94
8.44
7.68
7.81
8.11
8.040
0.76
8.23
8.12
7.98
8.41
8.31
8.18
7.99
8.06
8.160
0.43
7.89
7.77
7.91
8.04
8.00
7.89
7.93
8.09
7.940
0.32
8.24
8.18
7.83
8.05
7.90
8.16
7.97
8.07
8.050
0.41
7.87
8.13
7.92
7.99
8.10
7.81
8.14
7.88
7.980
0.33
Avgs
8.034
0.45
5 44
Application 5.1
Now R = 0.45, x = 8.034, and n = 8
UCLR = D4R = 1.864(0.45) = 0.839
LCLR = D3R = 0.136(0.45) = 0.061
UCLx = x + A2R = 8.034 + 0.373(0.45) = 8.202
LCLx = x A2R = 8.034 0.373(0.45) = 7.832
The resulting control charts indicate that the process is
actually in control.
5 45
p 1 p / n
5 46
Using pCharts
Periodically a random sample of size n is taken
The number of defectives is counted
The proportion defective p is calculated
If the proportion defective falls outside the UCL, it
is assumed the process has changed and
assignable causes are identified and eliminated
If the proportion defective falls outside the LCL,
the process may have improved and assignable
causes are identified and incorporated
5 47
Using a pChart
EXAMPLE 5.3
Hometown Bank is concerned about the number of wrong
customer account numbers recorded
Each week a random sample of 2,500 deposits is taken and
the number of incorrect account numbers is recorded
The results for the past 12 weeks are shown in the following
table
Is the booking process out of statistical control?
Use threesigma control limits, which will provide a Type I
error of 0.26 percent.
5 48
Using a pChart
Sample
Number
Wrong Account
Numbers
Sample
Number
Wrong Account
Numbers
15
24
12
19
10
10
17
19
11
15
12
3
Total
147
5 49
Using a pChart
Step 1: Using this sample data to calculate p
Total defectives
147
=
= 0.0049
p=
Total number of observations
12(2,500)
p =
5 50
Using a pChart
Step 2: Calculate the sample proportion defective. For sample 1,
the proportion of defectives is 15/2,500 = 0.0060.
Step 3: Plot each sample proportion defective on the chart, as
shown in Figure 5.12.
Fraction Defective
.0091
X
.0049
UCL
X
X
X
Mean
X
X
.0007

X

6
7
Sample
10
11
12
LCL
Figure 5.12 The pChart from POM for Windows for Wrong Account Numbers,
Showing That Sample 7 is Out of Control
5 51
Application 5.2
A sticky scale brings Websters attention to whether caulking
tubes are being properly capped. If a significant proportion of the
tubes arent being sealed, Webster is placing their customers in
a messy situation. Tubes are packaged in large boxes of 144.
Several boxes are inspected and the following numbers of
leaking tubes are found:
Sample
Tubes
Sample
Tubes
Sample
Tubes
15
16
10
17
11
18
12
19
13
20
14
Total =
72
5 52
Application 5.2
Calculate the pchart threesigma control limits to assess
whether the capping process is in statistical control.
p
0.025
Total number of tubes
20 144
p
p1 p
0.025 1 0.025
0.01301
144
and
LCLc = c zc
5 54
Using a cChart
EXAMPLE 5.4
The Woodland Paper Company produces paper for the
newspaper industry. As a final step in the process, the paper
passes through a machine that measures various product
quality characteristics. When the paper production process is
in control, it averages 20 defects per roll.
a. Set up a control chart for the number of defects per roll.
For this example, use twosigma control limits.
b. Five rolls had the following number of defects: 16, 21, 17,
22, and 24, respectively. The sixth roll, using pulp from a
different supplier, had 5 defects. Is the paper production
process in control?
5 55
Using a cChart
SOLUTION
a. The average number of defects per roll is 20. Therefore
UCLc = c + zc = 20 + 2(20) = 28.94
LCLc = c zc = 20 2(20) = 11.06
5 56
Using a cChart
Figure 5.13 The cChart from POM for Windows for Defects per Roll of Paper
b. Because the first five rolls had defects that fell within the
control limits, the process is still in control. Five defects,
however, is less than the LCL, and therefore, the process is
technically out of control. The control chart indicates that
something good has happened.
5 57
Application 5.3
At Webster Chemical, lumps in the caulking compound could
cause difficulties in dispensing a smooth bead from the tube.
Even when the process is in control, there will still be an
average of 4 lumps per tube of caulk. Testing for the presence of
lumps destroys the product, so Webster takes random samples.
The following are results of the study:
Tube #
Lumps
Tube #
Lumps
Tube #
Lumps
10
11
12
5 58
Application 5.3
6 5 0 4 6 4 1 6 5 0 9 2
4
c
12
c
4 2
UCL c c z c 4 2 2 8
LCL c c z c 4 2 2 0
5 59
Process Capability
Process capability refers to the ability of
the process to meet the design
specification for the product or service
Design specifications are often expressed
as a nominal value and a tolerance
5 60
Process Capability
Nominal
value
Process distribution
Lower
specification
20
Upper
specification
25
30
Minutes
Process Capability
Nominal
value
Process distribution
Lower
specification
20
Upper
specification
25
30
Minutes
Process Capability
Nominal value
Six sigma
Four sigma
Two sigma
Lower
specification
Upper
specification
Mean
Figure 5.15 Effects of Reducing Variability on Process Capability
5 63
Process Capability
The process capability index measures
how well a process is centered and
whether the variability is acceptable
Cpk = Minimum of
where
= standard deviation of the process distribution
5 64
Process Capability
The process capability ratio tests whether
process variability is the cause of
problems
Upper specification Lower specification
Cp =
6
5 65
5 66
5 67
5 69
30.0 20.0
= 1.23
Cp =
6(1.35)
The process variability did not meet the foursigma target of
1.33. Consequently, she initiated a study to see where
variability was introduced into the process. Two activities,
report preparation and specimen slide preparation, were
identified as having inconsistent procedures. These procedures
were modified to provide consistent performance. New data
were collected and the average turnaround was now 26.1
minutes with a standard deviation of 1.20 minutes.
5 71
30.0 20.0
= 1.39
Cp =
6(1.20)
However, the process capability index indicated additional
problems to resolve:
(26.1 20.0) (30.0 26.1)
,
= 1.08
Cpk = Minimum of
3(1.20)
3(1.20)
5 72
Application 5.4
Webster Chemicals nominal weight for filling tubes of caulk
is 8.00 ounces 0.60 ounces. The target process capability
ratio is 1.33, signifying that management wants 4sigma
performance. The current distribution of the filling process is
centered on 8.054 ounces with a standard deviation of
0.192 ounces. Compute the process capability index and
process capability ratio to assess whether the filling process
is capable and set properly.
5 73
Application 5.4
a. Process capability index:
Cpk = Minimum of
= Minimum of
Recall that a capability index value of 1.0 implies that the firm
is producing threesigma quality (0.26% defects) and that the
process is consistently producing outputs within
specifications even though some defects are generated. The
value of 0.948 is far below the target of 1.33. Therefore, we
can conclude that the process is not capable. Furthermore,
we do not know if the problem is centering or variability.
5 74
Application 5.4
b. Process capability ratio:
Upper specification Lower specification
8.60 7.40
Cp =
=
= 1.0417
6
6(0.192)
Recall that if the Cpk is greater than the critical value (1.33 for
foursigma quality) we can conclude that the process is
capable. Since the Cpk is less than the critical value, either the
process average is close to one of the tolerance limits and is
generating defective output, or the process variability is too
large. The value of Cp is less than the target for foursigma
quality. Therefore we conclude that the process variability must
be addressed first, and then the process should be retested.
5 75
Quality Engineering
Quality engineering is an approach
originated by Genichi Taguchi that involves
combining engineering and statistical
methods to reduce costs and improve
quality by optimizing product design and
manufacturing processes.
The quality loss function is based on the
concept that a service or product that
barely conforms to the specifications is
more like a defective service or product
than a perfect one.
5 76
Loss (dollars)
Quality Engineering
Lower
specification
Nominal
value
Upper
specification
5 77
International Standards
ISO 9000:2000 addresses quality
management by specifying what the firm
does to fulfill the customers quality
requirements and applicable regulatory
requirements while enhancing customer
satisfaction and achieving continual
improvement of its performance
Companies must be certified by an external
examiner
Assures customers that the organization is
performing as they say they are
5 78
International Standards
ISO 14000:2004 documents a firms
environmental program by specifying what
the firm does to minimize harmful effects
on the environment caused by its activities
The standards require companies to keep
track of their raw materials use and their
generation, treatment, and disposal of
hazardous wastes
Companies are inspected by outside,
private auditors on a regular basis
5 79
International Standards
External benefits are primarily increased
sales opportunities
ISO certification is preferred or required by
many corporate buyers
Internal benefits include improved
profitability, improved marketing, reduced
costs, and improved documentation and
improvement of processes
5 80
5 81
Leadership
2.
Strategic Planning
3.
4.
5.
Workforce Focus
6.
Process Management
7.
Results
5 82
Solved Problem 1
The Watson Electric Company produces incandescent
lightbulbs. The following data on the number of lumens for 40watt lightbulbs were collected when the process was in control.
Observation
Sample
604
612
588
600
597
601
607
603
581
570
585
592
620
605
595
588
590
614
608
604
5 83
Solved Problem 1
SOLUTION
a. To calculate x, compute the mean for each sample. To
calculate R, subtract the lowest value in the sample from the
highest value in the sample. For example, for sample 1,
604 + 612 + 588 + 600
= 601
x=
4
R = 612 588 = 24
x
601
24
602
10
582
22
602
32
604
24
Sample
Total
Average
2,991
x = 598.2
112
R = 22.4
5 84
Solved Problem 1
The Rchart control limits are
UCLR = D4R = 2.282(22.4) = 51.12
LCLR = D3R = 0(22.4) = 0
The xchart control limits are
UCLx = x + A2R = 598.2 + 0.729(22.4) = 614.53
LCLx = x A2R = 598.2 0.729(22.4) = 581.87
b. First check to see whether the variability is still in control
based on the new data. The range is 53 (or 623 570), which
is outside the UCL for the Rchart. Since the process
variability is out of control, it is meaningless to test for the
process average using the current estimate for R. A search
for assignable causes inducing excessive variability must be
conducted.
5 85
Solved Problem 2
The data processing department of the Arizona Bank has five
data entry clerks. Each working day their supervisor verifies
the accuracy of a random sample of 250 records. A record
containing one or more errors is considered defective and
must be redone. The results of the last 30 samples are shown
in the table. All were checked to make sure that none was out
of control.
5 86
Solved Problem 2
Sample
Number of Defective
Records
Sample
Number of Defective
Records
16
17
12
19
18
10
19
11
20
11
21
17
12
22
12
23
24
10
13
25
13
11
18
26
10
12
27
14
13
16
28
14
29
11
15
11
30
9
Total 300
5 87
Solved Problem 2
a. Based on these historical data, set up a pchart using z = 3.
b. Samples for the next four days showed the following:
Sample
Tues
17
Wed
15
Thurs
22
Fri
21
5 88
Solved Problem 2
SOLUTION
a. From the table, the supervisor knows that the total
number of defective records is 300 out of a total sample of
7,500 [or 30(250)]. Therefore, the central line of the chart is
p=
300
= 0.04
7,500
p 1 p
0.04(0.96)
0.04 3
0.077
n
250
Solved Problem 2
b. Samples for the next four days showed the following:
Sample
Proportion
Tues
17
0.068
Wed
15
0.060
Thurs
22
0.088
Fri
21
0.084
5 90
Solved Problem 3
The Minnow County Highway Safety Department monitors
accidents at the intersection of Routes 123 and 14. Accidents at
the intersection have averaged three per month.
a. Which type of control chart should be used? Construct a
control chart with three sigma control limits.
b. Last month, seven accidents occurred at the intersection. Is
this sufficient evidence to justify a claim that something has
changed at the intersection?
5 91
Solved Problem 3
SOLUTION
a. The safety department cannot determine the number of
accidents that did not occur, so it has no way to compute a
proportion defective at the intersection. Therefore, the
administrators must use a cchart for which
UCLc = c + z c = 3 + 3 3 = 8.20
LCLc = c z c = 3 3 3 = 2.196
There cannot be a negative number of accidents, so the LCL
in this case is adjusted to zero.
b. The number of accidents last month falls within the UCL
and LCL of the chart. We conclude that no assignable
causes are present and that the increase in accidents was
due to chance.
5 92
Solved Problem 4
Pioneer Chicken advertises lite chicken with 30 percent fewer
calories. (The pieces are 33 percent smaller.) The process
average distribution for lite chicken breasts is 420 calories,
with a standard deviation of the population of 25 calories.
Pioneer randomly takes samples of six chicken breasts to
measure calorie content.
a. Design an xchart using the process standard deviation.
b. The product design calls for the average chicken breast to
contain 400 100 calories. Calculate the process capability
index (target = 1.33) and the process capability ratio.
Interpret the results.
5 93
Solved Problem 4
SOLUTION
a. For the process standard deviation of 25 calories, the
standard deviation of the sample mean is
x
25
10.2 calories
n
6
5 94
Solved Problem 4
b. The process capability index is
Cpk = Minimum of
= Minimum of
5 96