Control Charts

for Attributes
p-chart: A chart used for controlling
the proportion of defective services or
products generated by the process.

p =

p(1 p)/n

Where
n = sample size
p = central line on the chart, which can be either the historical
average population proportion defective or a target value.

Control limits are: UCLp = p+zp and LCLp = pzp

z = normal deviate (number of standard deviations from the average)

Hometown Bank
Example
The operations manager of the booking services department of Hometown Bank
is concerned about the number of wrong customer account numbers recorded by
Hometown personnel.
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 three-sigma control limits.

Hometown Bank
Using a p-Chart to monitor a process
n = 2500

p=
p =
p =

147
= 0.0049
12(2500)

p(1 p)/n
0.0049(1 0.0049)/2500

p = 0.0014
UCLp = 0.0049 + 3(0.0014)
= 0.0091
LCLp =
0.0049 3(0.0014)
= 0.0007

Sample
Number

Wrong
Account #

Proportion
Defective

1
2
3
4
5
6
7
8
9
10
11
12

15
12
19
2
19
4
24
7
10
17
15
3

0.006
0.0048
0.0076
0.0008
0.0076
0.0016
0.0096
0.0028
0.004
0.0068
0.006
0.0012

Total

147

Hometown Bank
Using a p-Chart to monitor a process
Example

In class Problem

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

Process Capability
Process capability is the ability
of the process to meet the design
specifications for a service or
product.
Nominal value is a target for
design specifications.
Tolerance is an allowance above
or below the nominal value.

Process Capability
Nominal
value
Process distribution
Lower
specification

20

Upper
specification

25
Process is capable

30

Process Capability
Nominal
value
Process distribution
Lower
specification

20

Upper
specification

25
Process is not capable

30

Process Capability Ratio, Cp

Process capability ratio, Cp, is the tolerance width divided by 6
standard deviations (process variability).

Cp =

Upper specification - Lower specification

6

Process Capability Index, Cpk

Process Capability Index, Cpk, is an index that measures
the potential for a process to generate defective
outputs relative to either upper or lower specifications.

Cpk = Minimum of

x= Lower specification
3

Upper specification = x
3

We take the minimum of the two ratios because it gives

the worst-case situation.

Intensive Care Lab

Example
The intensive care unit lab process has an average
turnaround time of 26.2 minutes and a standard
deviation of 1.35 minutes.
The nominal value for this service is 25 minutes with an
upper specification limit of 30 minutes and a lower
specification limit of 20 minutes.
The administrator of the lab wants to have three-sigma
performance for her lab. Is the lab process capable of
this level of performance?
Upper specification = 30 minutes
Lower specification = 20 minutes
Average service = 26.2 minutes
= 1.35 minutes

Intensive Care Lab

Assessing Process Capability
Example

Cpk = Minimum of

Cpk =
Cpk =

Upper specification = 30
minutes
Lower specification = 20
minutes
Average service = 26.2
minutes
Upper specification = x
x =Lower specification
,

=
1.35
minutes
3
3
26.2 20.0

Minimum of

Minimum of

3(1.35)

1.53, 0.94

= 0.94

30.0 26.2
3(1.35)

Process
Capabilit
y Index

Intensive Care Lab

Assessing Process Capability
Example
Cp =
Cp =

Upper specification - Lower specification

30 - 20
6(1.35)

= 1.23 Process Capability Ratio

Does not meet 3 (1.00 Cpk) target due to a shift in mean

(Note variability is ok since Cp is over 1.0)
Before Process Modification
Upper specification = 30.0 minutes Lower specification = 20.0 minutes
Average service = 26.2 minutes
= 1.35 minutes Cpk = 0.94 Cp = 1.23

In Class Problem

In Class Problem

Effects of Reducing
Variability on Process Capability
Nominal value
Six sigma

Four sigma
Two sigma

Lower
specification

Upper
specification

Mean

What it means to operate at 6sigma

Range

Population in range

Expected frequency
outside range

Approx. frequency for

daily event

0.682689492137

1 in 3

Twice a week

0.954499736104

1 in 22

Every three weeks

0.997300203937

1 in 370

Yearly

0.999936657516

1 in 15,787

Every 43 years (twice

in a lifetime)

0.999999426697

1 in 1,744,278

Every 5,000 years

(once in history)

0.999999998027

1 in 506,842,372

Every 1.5 million years

Six Sigma
3.4 defects per million
Cpk = 2
Impact of number of parts or
production steps on yield:
6 sigma

1
5
10
100

100%
100%
100%
99.97%

4 sigma
99%
97%
94%
54%

99%
71%
50%
0%

3 sigma

Designing in 6-sigma
Reduce the number of parts in a product
Reduce the number of steps in a process

Six Sigma
Six Sigma is a comprehensive and flexible
system for achieving, sustaining, and
maximizing business success by minimizing
defects and variability in processes.
It relies heavily on the principles and tools of
TQM.
It is driven by a close understanding of
customer needs; the disciplined use of facts,
data, and statistical analysis; and diligent
attention to managing, improving, and
reinventing business processes.

Six Sigma
Improvement Model
1. Define Determine the current process
characteristics critical to customer
satisfaction and identify any gaps.
2. Measure Quantify the work the
process does that affects the gap.
3. Analyze Use data on measures to
perform process analysis.
4. Improve Modify or redesign existing
methods to meet the new
performance objectives.
5. Control Monitor the process to make
sure high performance levels are
maintained.

Six Sigma
Implementation
Top Down Commitment from corporate
leaders.
Measurement Systems to Track
Progress
Tough Goal Setting through
benchmarking best-in-class companies.
Education: Employees must be trained
in the whys and how-tos of quality.
Communication: Successes are as
important to understanding as failures.
Customer Priorities: Never lose sight of
the customers priorities.

Six Sigma Education

Green Belt: An employee who achieved the
first level of training in a Six Sigma program and
spends part of his or her time teaching and
helping teams with their projects.
Black Belt: An employee who reached the
highest level of training in a Six Sigma program
and spends all of his or her time teaching and
leading teams involved in Six Sigma projects.
Master Black Belt: Full-time teachers and
mentors to several black belts.

International Quality
Documentation Standards

ISO
9000
ISO
14000

A set of standards governing

documentation of a quality program.

Documentation standards that require

participating companies to keep track of
their raw materials use and their
generation, treatment, and disposal of
hazardous wastes.

Malcolm Baldrige National

Quality Award
Named after the late secretary of commerce, a strong
proponent of enhancing quality as a means of
reducing the trade deficit. The award promotes,
recognizes, and publicizes quality strategies and
achievements.
1. Category
1 Leadership
120 points
2. Category 2 Strategic Planning
85 points
3. Category 3 Customer and Market Focus
85 points
4.

Category 4 Measurement, Analysis, and

Knowledge Management
5. Category 5 Human Resource Focus
6. Category 6 Process Management
7. Category 7 Business Results

90
85
85
450

points
points
points
points