6

Managing Quality

PowerPoint presentation to accompany

Heizer and Render
Operations Management, 10e
Principles of Operations Management, 8e
PowerPoint slides by Jeff Heyl

Outline
Defining Quality
Implications of Quality
Ethics and Quality Management

Total Quality Management

Continuous Improvement
Six Sigma
Employee Empowerment
TQM in Services

Statistical Process Control (SPC)

Control Charts for Variables
Control Charts for Attributes

Process Capability
Process Capability Ratio (Cp)
Process Capability Index (Cpk )
2

Learning Objectives
1. Define quality and TQM

2.
3.
4.
5.
6.

Explain Six Sigma

Explain the use of a control chart
Build -charts and R-charts
Build p-charts
Explain process capability and
compute Cp and Cpk

Two Ways Quality

Improves Profitability

Improved
Quality

Sales Gains via

Improved response
Flexible pricing
Improved reputation
Reduced Costs via
Increased productivity
Lower rework and scrap costs
Lower warranty costs

Increased
Profits

Figure 6.1
4

Defining Quality
The totality of features and characteristics of a
product or service that bears on its ability to
satisfy stated or implied needs American Society for Quality

Different Views
User-based
Manufacturing-based
Product-based
5

Key Dimensions of Quality

Performance

Durability

Features

Serviceability

Reliability

Aesthetics

Conformance

Perceived quality
Value

Ethics and Quality

Management
Operations managers must deliver
healthy, safe, quality products and
services
Poor quality risks injuries, lawsuits,
recalls, and regulation
Organizations are judged by how
they respond to problems
All stakeholders much be
considered
7

Demings Fourteen Points

1.

Create consistency of purpose

2.

Lead to promote change

3.

Build quality into the product; stop depending on

inspections

4.

Build long-term relationships based on performance

instead of awarding business on price

5.

Continuously improve product, quality, and service

6.

Start training

7.

Emphasize leadership
Table 6.2
8

Demings Fourteen Points

6.

Drive out fear

7.

Break down barriers between departments

8.

Stop haranguing workers

9.

Support, help, and improve

12. Remove barriers to pride in work

13. Institute education and self-improvement
14. Put everyone to work on the transformation

Table 6.2
9

Continuous Improvement
Represents continual
improvement of all processes
Involves all operations and work
centers including suppliers and
customers
People, Equipment, Materials,
Procedures
10

Six Sigma Program 6

A highly structured program developed by Motorola

A discipline DMAIC

Also,

Statistical definition of a process that is 99.9997%

capable, 3.4 defects per million opportunities (DPMO)
Lower limits

Upper limits

2,700 defects/million
3.4 defects/million

Mean
3
6
Figure 6.4

11

Six Sigma
1. Define critical outputs
and identify gaps for
DMAIC Approach
improvement
2. Measure the work and
collect process data
3. Analyze the data
4. Improve the process
5. Control the new process to
make sure new performance
is maintained
12

Employee Empowerment
Getting employees involved in product
and process improvements
85% of quality problems are due
to process and material

Techniques
Build communication networks
that include employees
Develop open, supportive supervisors
Move responsibility to employees
Build a high-morale organization
Create formal team structures
13

TQM In Services
Service quality is more difficult to
measure than the quality of goods
Service quality perceptions depend
on
Intangible differences between
products
Intangible expectations customers
have of those products

14

Statistical Process Control

(SPC)
Variability is inherent
in every process
Natural or common
causes
Special or assignable causes

Provides a statistical signal when

assignable causes are present
Detect and eliminate assignable causes
of variation
15

Natural Variations
Also called common causes
Affect virtually all production processes
Expected amount of variation
Output measures follow a probability
distribution
For any distribution there is a measure
of central tendency and dispersion
If the distribution of outputs falls within
acceptable limits, the process is said to
be in control

16

Assignable Variations
Also called special causes of variation
Generally this is some change in the process

Variations that can be traced to a specific

reason
The objective is to discover when
assignable causes are present
Eliminate the bad causes
Incorporate the good causes

17

Types of Data
Variables
Characteristics that
can take any real
value
May be in whole or
in fractional
numbers
Continuous random
variables

Attributes
Defect-related
characteristics
Classify products
as either good or
bad or count
defects
Categorical or
discrete random
variables
18

Control Charts for Variables

For variables that have
continuous dimensions
Weight, speed, length,
strength, etc.

x-charts are to control

the central tendency of the process
R-charts are to control the dispersion of
the process
These two charts must be used together
19

Setting Chart Limits

For x-Charts when we know
Upper control limit (UCL) = x + z x
Lower control limit (LCL) = x - z x
where

x = mean of the sample means or a

target value set for the process
z = number of normal standard
deviations
x = standard deviation of the sample
means
= / n
= population standard deviation
20
n = sample size

Setting Control Limits

Hour 1
Sample
Weight of
Number
Oat Flakes
1
17
2
13
3
16
4
18
5
17
n=9
6
16
7
15
8
17
9
16
Mean 16.1
=
1

Hour
1
2
3
4
5
6

Mean
16.1
16.8
15.5
16.5
16.5
16.4

Hour
7
8
9
10
11
12

Mean
15.2
16.4
16.3
14.8
14.2
17.3

For 99.73% control limits, z = 3

UCLx = x + z x = 16 + 3(1/3) = 17 ozs
LCLx = x - z x = 16 - 3(1/3) = 15 ozs
21

Setting Control Limits

Control Chart
for sample of
9 boxes

Variation due
to assignable
causes

Out of
control

17 = UCL
Variation due to
natural causes

16 = Mean
15 = LCL
| | | | | | | | | | | |
1 2 3 4 5 6 7 8 9 10 11 12

Sample number

Out of
control

Variation due
to assignable
causes

22

Setting Chart Limits

For x-Charts when we dont know
Upper control limit (UCL) = x + A2R
Lower control limit (LCL) = x - A2R
where

R = average range of the samples

A2 = control chart factor found in
Table S6.1
x = mean of the sample means
23

Control Chart Factors

Sample Size
n

Mean Factor
A2

Upper Range
D4

Lower Range
D3

2
3
4
5
6
7
8
9
10
12

1.880
1.023
.729
.577
.483
.419
.373
.337
.308
.266

3.268
2.574
2.282
2.115
2.004
1.924
1.864
1.816
1.777
1.716

0
0
0
0
0
0.076
0.136
0.184
0.223
0.284
Table S6.1
24

Setting Control Limits

Process average x = 12 ounces
Average range R = .25
Sample size n = 5

25

Setting Control Limits

Process average x = 12 ounces
Average range R = .25
Sample size n = 5
UCLx

= x + A2R
= 12 + (.577)(.25)
= 12 + .144
= 12.144 ounces
From
Table S6.1

26

Setting Control Limits

Process average x = 12 ounces
Average range R = .25
Sample size n = 5
UCLx

LCLx

= x + A2R
= 12 + (.577)(.25)
= 12 + .144
= 12.144 ounces
= x - A2R
= 12 - .144
= 11.857 ounces

UCL = 12.144

Mean = 12

LCL = 11.857

27

Restaurant Control Limits

For salmon filets at Darden Restaurants
Sample Mean

11.5
11.0

x 10.959

10.5

LCL 10.394
|

11

13

15

17

0.8
Sample Range

UCL = 11.524

x Bar Chart

Range Chart

UCL = 0.6943

0.4

R = 0.2125
LCL = 0

0.0
|

11

13

15

17
28

R Chart
Type of variables control chart
Shows sample ranges over time
Difference between smallest and
largest values in sample

Monitors process variability

Independent from process mean

29

Setting Chart Limits

For R-Charts
Upper control limit (UCLR) = D4R
Lower control limit (LCLR) = D3R
where
R = average range of the samples
D3 and D4 = control chart factors from
Table S6.1

30

Setting Control Limits

Average range R = 5.3 pounds
Sample size n = 5
From Table S6.1 D4 = 2.115, D3 = 0
UCLR = D4R
= (2.115)(5.3)
= 11.2 pounds
LCLR

= D3 R
= (0)(5.3)
= 0 pounds

UCL = 11.2

Mean = 5.3

LCL = 0

31

Mean and Range Charts

(a)
These
sampling
distributions
result in the
charts below

(Sampling mean is
shifting upward but
range is consistent)

UCL

x-chart
LCL

(x-chart detects
shift in central
tendency)

UCL

R-chart
LCL

(R-chart does not

detect change in
mean)

Figure S6.5
32

Mean and Range Charts

(b)
These
sampling
distributions
result in the
charts below

(Sampling mean
is constant but
dispersion is
increasing)
UCL

x-chart
LCL

(x-chart does not

detect the increase
in dispersion)

UCL

R-chart
LCL

(R-chart detects
increase in
dispersion)

Figure S6.5
33

Control Charts for Attributes

For variables that are categorical
Good/bad, yes/no,
acceptable/unacceptable

Measurement is typically counting

defectives
Charts may measure
Percent defective (p-chart)
Number of defects (c-chart)
34

Control Limits for p-Charts

Population will be a binomial distribution,
but applying the Central Limit Theorem
allows us to assume a normal distribution
for the sample statistics
UCLp = p + z p^

p =
^

LCLp = p - z p^
p
z
p
n

=
=
=
=

p(1 - p)
n

mean fraction defective in the sample

number of standard deviations
^
standard
deviation of the sampling distribution
sample size
35

p-Chart for Data Entry

Sample
Number

1
2
3
4
5
6
7
8
9
10

p=

Number
of Errors

Fraction
Defective

6
5
0
1
4
2
5
3
3
2

.06
.05
.00
.01
.04
.02
.05
.03
.03
.02

80
(100)(20)

= .04

Sample
Number

Number
of Errors

Fraction
Defective

11
6
12
1
13
8
14
7
15
5
16
4
17
11
18
3
19
0
20
4
Total = 80

p^ =

(.04)(1 - .04)
100

.06
.01
.08
.07
.05
.04
.11
.03
.00
.04

= .02
36

p-Chart for Data Entry

UCLp = p + z p^ = .04 + 3(.02) = .10

Fraction defective

LCLp = p - z p^ = .04 - 3(.02) = 0

.11
.10
.09
.08
.07
.06
.05
.04
.03
.02
.01
.00

UCLp = 0.10

p = 0.04

10

12

14

16

18

20

LCLp = 0.00

Sample number
37

p-Chart for Data Entry

UCLp = p + z p^ = .04 + 3(.02) = .10

Fraction defective

Possible
LCLp = p - z p^ = .04 - 3(.02) =
0
assignable
causes present

.11
.10
.09
.08
.07
.06
.05
.04
.03
.02
.01
.00

UCLp = 0.10

p = 0.04

10

12

14

16

18

20

LCLp = 0.00

Sample number
38

Which Control Chart to Use

Variables Data
Using an x-Chart and R-Chart
1. Observations are variables
2. Collect 20 - 25 samples of n = 4, or n = 5, or
more, each from a stable process and compute
the mean for the x-chart and range for the Rchart
3. Track samples of n observations each.

Table S6.3
39

Which Control Chart to Use

Attribute Data
Using the p-Chart
1. Observations are attributes that can be
categorized as good or bad (or passfail, or
functionalbroken), that is, in two states.
2. We deal with fraction, proportion, or percent
defectives.
3. There are several samples, with many
observations in each. For example, 20 samples
of n = 100 observations in each.
Table S6.3
40

Patterns in Control Charts

UCL

Target

UCL
Target
LCL

LCL
Normal behavior. Process
is in control.

UCL

Target
LCL
Two plots very near
lower (or upper) control.

One plot out above (or

below). Process is out of
control.

UCL

Target
LCL
Run of 5 above (or below)
central line.

UCL

Target
LCL
Trends in either direction, 5
plots. Progressive change.

UCL

Target
LCL
Erratic behavior.

41

Process Capability
The natural variation of a process
should be small enough to produce
products that meet the standards
required
A process in statistical control does not
necessarily meet the design
specifications
Process capability is a measure of the
relationship between the natural
variation of the process and the design
specifications
42

Process Capability Ratio

Upper Specification - Lower Specification
Cp =
6
A capable process must have a Cp of at
least 1.0
Does not look at how well the process
is centered in the specification range
Often a target value of Cp = 1.33 is used
to allow for off-center processes
Six Sigma quality requires a Cp = 2.0
43

Process Capability Ratio

Insurance claims process
Process mean x = 210.0 minutes
Process standard deviation = .516 minutes
Design specification = 210 3 minutes
Upper Specification - Lower Specification
Cp =
6

44

Process Capability Ratio

Insurance claims process
Process mean x = 210.0 minutes
Process standard deviation = .516 minutes
Design specification = 210 3 minutes
Upper Specification - Lower Specification
Cp =
6
213 - 207
=
= 1.938
6(.516)

45

Process Capability Ratio

Insurance claims process
Process mean x = 210.0 minutes
Process standard deviation = .516 minutes
Design specification = 210 3 minutes
Upper Specification - Lower Specification
Cp =
6
213 - 207
=
= 1.938
6(.516)

Process is
capable
46

Process Capability Index

Upper
Lower
Cpk = minimum of Specification - x , x - Specification
Limit
Limit

A capable process must have a Cpk of at

least 1.0
A capable process is not necessarily in the
center of the specification, but it falls within
the specification limit at both extremes
47

Process Capability Index

New Cutting Machine
New process mean x = .250 inches
Process standard deviation = .0005 inches
Upper Specification Limit = .251 inches
Lower Specification Limit = .249 inches

48

Process Capability Index

New Cutting Machine
New process mean x = .250 inches
Process standard deviation = .0005 inches
Upper Specification Limit = .251 inches
Lower Specification Limit = .249 inches
Cpk = minimum of

(.251) - .250
,
(3).0005

49

Process Capability Index

New Cutting Machine
New process mean x = .250 inches
Process standard deviation = .0005 inches
Upper Specification Limit = .251 inches
Lower Specification Limit = .249 inches
Cpk = minimum of

(.251) - .250
.250 - (.249)
,
(3).0005
(3).0005

Both calculations result in

.001
Cpk =
= 0.67
.0015

New machine is
NOT capable
50

Interpreting Cpk
Cpk = negative number
Cpk = zero
Cpk = between 0 and 1
Cpk = 1
Cpk > 1
Figure S6.8
51

SPC and Process Variability

Lower
specification
limit

Upper
specification
limit

(a) Acceptance
sampling (Some
bad units accepted)
(b) Statistical process
control (Keep the
process in control)
(c) Cpk >1 (Design
a process that
is in control)

Process mean,
Figure S6.10
52

In-Class Problems from the

Lecture Guide Practice Problems
Problem 1:
Twenty-fiveenginemountsaresampledeachdayandfoundtohave
anaveragewidthof2inches,withastandarddeviationof0.1inches.
Whatarethecontrollimitsthatinclude99.73%ofthesamplemeans.

53

In-Class Problems from the

Lecture Guide Practice Problems
Problem 2:
Severalsamplesofsizehavebeentakenfromtodaysproductionof
fenceposts.Theaveragepostwas3yardsinlengthandtheaverage
samplerangewas0.015yard.Findthe99.73%upperandlower
controllimits.

54

In-Class Problems from the

Lecture Guide Practice Problems
Problem 3:
Theaveragerangeofaprocessis10lbs.Thesamplesizeis10.Use
TableS6.1todevelopupperandlowercontrollimitsontherange.

55

In-Class Problems from the

Lecture Guide Practice Problems
Problem 4:
Basedonsamplesof20IRSauditors,eachhandling100files,we
findthatthetotalnumberofmistakesinhandlingfilesis220.Findthe
95.45%upperandlowercontrollimits.

56