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Chapter 4 - Managing Quality
Chapter 4 - Managing Quality
Chapter 4 - Managing Quality
Quality can be defined in two ways: the value prespective and conformance
prespective
1. Value prespective: the charectaristics of a product/service that bears
on its ability to satisfy stated or implied needs
2. Conformance prespective: A product or service free of deficies
Quality can vary in many situations, there are 8 dimensions in genereal which users
evaluate the quality of a product/service
Using these two perspectives on quality, in order for a firm to product high-quality
products/services they then must:
There are four quality-related costs to take in account: internal failure costs, external
failure costs, appraisal costs, and prevention costs
Total cost of quality curve: a curve that suggests there is some optimal quality level
Q*. this curve is caluclated by adding costs of internal and external failures,
prevention costs, and appraisal costs
- for defect levels higher than this level, exponentially increasing
failure costs cause quality costs to raise
- for defect levels below Q*, increases in prevention costs outstrip
decreases in failure costs
Again… the in order to address both the value and the conformance perspective
quality a firm must:
To accomplish this all individuals withing an organization must adress quality within
all of an organization’s business processes… from design purchasing,
manufacturing, and distribution
TQM and Six sigma are quite similar methods, however they have some major
differences:
Regarding back to the start of the chapter, Statistical quality control (SQC) aims at
“Verifying that the business processes are indeed meeting the specifications” of the
four point and organization must do to adress quality and costs issues.
Process Capability
A way a business can know wheter or not its business processes are capable of
meeting certain quality standards is through the process capability ratio (Cp).
Cp = UTL – LTL/ 6*
Upper tolerance (UTL): this is the highest acceptable value for some measure of
interest (e.x weight, temperature, or time)
Lower tolerance limit (LTL): This is the lowest acceptable value for some measure
of interest
How to calculate *
*=
√ ∑ x mean− xi 2
n−1
A wider tolerance limits or/ smaller values of * = Higher Cp values (more capable
process)
A narrower tolerance limits or/ larger values of * = Lower Cp values
In order to graphically state it, use knowledge of both QM1 And QM2 from normal
distribution section
Six Sigma Quality
Six Sigma Quality: this term indicates that a process is well controlled. e.x usgin the
tolerance limits. The main point is to reduce the variability of a process so that 12
standard deviations can be narrowd in between tolerance limits. This can be expressed
in the following way:
UTL −LTL
Six Sigma Cp =
12 ×deviation >= 1
A perfectly cnetered proces (=1) makes up fro 2 defects per billion. However in realty
this is not possible, which results in a higher number of observations falling outside
tolerance limits. By shifting the process mean of +- 1.5 standard deviations, this
increases the defect level to 3.4 defects per million (working definition of Six Sigma)
Control Charts
Control charts: These are specialized run charts that helps an organization track
changes in key measure. Using control charts an organization is able to quickly
determine wheter a process is “in control” and take action if its not.
Using a control chart requires the concepts of sampling and variable types (Review):
Sampling: This is all about taking selected samples in order to determine an overal
view of how a process is doing
Variable types: Most measures fall into two types: continous variables or attributes
Proportion: a measure of the percent of the sample that does or does not have a
particular charectaristic. (P)
P=
∑ ai
n
Control limits: this are the upper and lower limits of the control chart. They are
calculated in a way that if a sample result falls inside the control limits the process is
considered under control and vice versa
/!\ two points which should not be emphasized about control charts:
… in general control charts are used to catch problems early, or before they get out of
hand!
X mean chart: this is used to track average value for future samples
(equation above)
R chart: this is used to track how much the individual observations within
each sample vary (equation above)
The p chart:
P chart: this type of control chart for attributes is used to track sample
proportions . . . . finish
Acceptance Sampling
Acceptence sampling allows for a less time consuming and cheaper process to
determine the quality of the goods. Organizations will accept or reject the production
of goods if a prefixed ratio of goods is faulty or non-faulty.
Failure costs are indicated as Loss; Taguchi's Quality loss function reflects
the idea that any deviation from the target value results in additional costs
as displayed by the parabloic shape, losses grow exponentially in respect
to deviation from target value
Note: As long as there is variability in the process, there is room for improvement
An ISO 9000 certificate is either required to run a specific business or indicates high
quality standards for potential supply chain partners
ISO 9000
(since 1987)