Agenda

Agenda Week 7

 Review homework  Week 8 assignment

• Chapter 3 -  11, 36(c) • Homework
• Case Study: “How We • Problems chapter 4
Slashed Response Time” – 2, 3
 Lecture/discussion
• Chapter 4: Statistics
• Metrics
• Measurement
• Statistics

Quality Metrics
Quality Metrics
Chapter Four

“We best manage what we can

measure”

Quality Metrics
Metric
 A metric is a verifiable measure stated in
either quantitative or qualitative terms.
• “95 percent inventory accuracy”
• “as evaluated by our customers, we are
providing above-average service”

Quality Metrics
Metric
 A metric is a verifiable measure
 that
• captures performance in terms of how
something is being done relative to a
standard,
• allows and encourages comparison,
• supports business strategy.

Quality Metrics
Customer quality measures
 Customers typically relate quality to:

• Feature based measures; “have” or “have

not” - determined by design

• Performance measures - “range of values” -

conformance to design or ideal value

Quality Metrics
True versus substitute
performance measures
 Customers - use “true” performance measures.
• example: a true measure of a car door may be “easy to close”.
• true performance measures typically vary by each individual
customer.
• Unfortunately, producers cannot measure performance as each
individual customer does.
 Producers - use “substitute” performance measures
• these measures are quantifiable (measurable units).
• Substitute measure for a car door: door closing effort (foot-
pounds).

 Other example: light bulb

• true performance measure -- brightens the room
• substitute performance measure – wattage or lumens

Quality Metrics
Educating Consumers
 Sometimes, producers educate consumers on
their substitute performance measures.
 What are substitute performance measures for
the following customer desires:
• Good Gas Mileage
• Powerful Computer
 What is the effect of educating consumers on
performance measures?

Quality Metrics
What is a “metric”?
 Another term for a substitute performance
measure is a metric.
• Metric is a standard of measurement.
• In quality management, we use metrics to translate
customer needs into producer performance
measures.
 Internal quality metrics
• scrap and rework
• process capability (Cp or Cpk)
• first time through quality (FTTQ)
Quality Metrics
Identifying effective metrics
 Effective metrics satisfy the following
conditions:
• performance is clearly defined in a measurable
entity (quantifiable).
• a capable system exists to measure the entity
(e.g., a gage).
 Effective metrics allow for actionable
responses if the performance is unacceptable.
• There is little value in a metric which identifies
nonperformance if nothing can or will be done to
remedy it.
• Example: Is net sales a good metric to measure the
performance of a manufacturing department?
Quality Metrics
Use of quality metrics
 Quality metric data may be used to:
• spot trends in performance.
• compare alternatives.
• predict performance.
 However, organizations should consider the
costs and benefits of collecting information for
a particular quality metric.
• collecting data will not necessarily result in higher
performance levels.
• higher quality companies often use fewer metrics
than their competitors.
Quality Metrics
Acceptable ranges
 In practice, identifying effective metrics is often
difficult.
• Main reason: non-performance of a metric does not always lead
to customer dissatisfaction.
• Consider the car door example again, if door closing
effort is the metric, will a customer be dissatisfied if
the actual effort is 50 foot-pounds versus 55 foot-
pounds.
 Producers typically identify ranges of acceptable
performance for a metric.
• (a) For services, ranges often referred to as break points.
• (b) In manufacturing, these ranges are known as targets,
tolerances, or specifications.

Quality Metrics
Break points
 Break points are levels where improved performance
will likely change customer behavior.
 Example: waiting in line
• Suppose the average customer will only wait for 5 minutes
• Wait longer than 5 minutes -- customer is
dissatisfied.
• 1-5 minutes -- customer is satisfied.
• less than 1 minute -- customer is extremely satisfied
 Should a company try to reduce average wait time
from 4 to 2 minutes.?

Quality Metrics
Targets, tolerances and
specifications
 Target (nominal) - desired value of a
characteristic.
 A tolerance specifies an allowable deviation
from a target value where a characteristic is
still acceptable.
Lower specification Upper specification
limit (LSL) TARGET limit (USL)

-1 +1

Quality Metrics