O6_pl71-218 2/5/04 6132 PM Page 17L Statistical Quality Control Before studying this chapter you should know or, if necessary, review 1. Quality asa competitive priority, Chapter 2, page 36 2 Total quality management (TQM) concepts, Chapter 5, pages 147~159. fina After studying this chapter you should be able to Describe categories of statistical quality control (SQC). Explain the use of descriptive statistics in measuring quality characteristics. Identify and describe causes of vacation, Describe the use of control chats, Identify the differences between x-bar,R-, p> and echarts Explain the meaning of process capability and the process capability index. Exphin the term Six Sigma Explain the process of acceptance sampling and describe the use of operating characteristic (OC) curves Describe the challenges inherent in measuring quality inservice organizations. Grams ‘What Is Statistical Quality Conteol? 172 Links to Practice: Intel Corporation 173, ‘Sources of Variation: Common and Assignable Causes 174 Descriptive Statistics 174 Statistical Process Control Methods 176 Control Charts for Variables 178 ‘Control Charts for Attributes 184 Process Capability 190 Links to Practice: Motorola, Ine. 196 Acceptance Sampling 196 Implications for Managers 203 Statistical Quality Control in Services 204 Links to Practice: The Rite-Carlton Hotel Company, LLCs Nordstrom, ne. 205 Links to Practice: Marriott International, Inc. 205 (OM Across the Organization 206 InsideOM 206 Case: Scharadin Hotels 216 Case: Delta Plastics, Inc.(B) 217172 * CHAPTER 6 STATISTICAL QUALITY CONTROL wi all had the experience of purchasing a prod- uct only to discover that it is defective in some way or does not function the way it was designed to. This could be a new backpack with a broken zipper or an “out of the box” malfunctioning computer printer. Many of us have struggled to assemble a product the manufacturer has indicated would need only “minor” assembly, only to find that a piece of the product is missing or defective. As consumers, we expect the products we purchase to func~ tion as intended. However, producers of products know that itis not always possible to inspect every product and) every aspect of the production process at al times. The challenge is to design ways to ‘maximize the ability to monitor the quality of products being produced and eliminate defects. (One way to ensure a quality product is to build quality into the process. Consider Steinway & Sons, the premier maker of pianos used in concert halls all over the world. Steinveay has been making pianos since the 1880s. Since that time the company’s ‘manufacturing process has not changed significantly. It takes the company nine ‘months to a year to produce a piano by fashioning some 12,000 hand-crafted parts, carefully measuring and monitoring every part of the process. While many of Stein- \way's competitors have moved to mass production, where pianos can be assembled in 20 days, Steinway has maintained a strategy of quality defined by skill and craftsman- ship. Steinway’s production process is focused on meticulous process precision and extremely high product consistency. This has contributed to making its name synony- ‘mous with top quality. In Chapter 5 we learned that total quality management (TQM) addresses organi tional quality from managerial and philosophical viewpoints. TQM focuses on customer-driven quality standards, managerial leadership, continuous improvement, quality built into product and process design, quality identified problems at the Marketing, Management, source, and quality made everyone’ responsibilty. However, talking about solving Engineering quality problems is not enough. We need specific tools that can help us make the right quality decisions. These tools come from the area of statistics and are used to help quality broad categories: cee 1. Descriptive statistics are used to deseribe quality characteristics and relation- thalty characterises and ships. Included are statistics such as the mean, standard deviation, the range, Felationships. anda measure ofthe distribution of data, —b—WHAT IS STATISTICAL QUALITY CONTROL? * 173 Statistical process control (SPC) involves inspecting a random sample of the > Suis process output from a process and deciding whether the process is producing products contol Sc) With characteristics that fall within a predetermined range. SPC answers the stata tol that involves «question of whether the process is nctioning properly of not. inspecting andom ale 3. Acceptance sampling is the process of randomly inspecting a sample of goods and deciding whether the and deciding whether to accept the entie lot based on the results, Acceptance process producing products sampling determines whether a batch of goods should be accepted or rejected Yih tracers tat ‘The tools in each of these categories provide diferent types of information for use in PS analyzing quality. Descriptive statistics are used to describe certain quality charactris- > ascptance sampling tics such asthe central tendency and variability of observed data Athowgh descriptions Thepracss o randomly of certain characteristics are help they are not enough to help us evaluate whethor ispectnga sample of goods there is a problem with quality. Acceptance sampling can help us do this. Acceptance INIdeSNne hehe a sampling helps us decide whether desirable quality has been achieved for a batch of jhPuhs products, and whether to acept or reject the items produced. Although this iforma- tion isheipfl in making the quality aceptance decision after the product as been pro ‘doce it does not help us identify and catch a quality problem during the production procs. For this we need tools in the statistical process control (SPC) category. All three ofthese statistical quality control categories ae helpful in measuring and evaluating the quality of products or services. However, statistical process control (SPO) tools are used most ffequently because they identify quality problems during the proxiucton process. For this reason, we will devote most ofthe chapter to this tegory of tools. The quality control tools we will be learning about do not only measure the value of a quality characteristic. They also help us identify a change or Variation in some quality characteristic of the product or process. We will fist see ‘what types of variation we can observe when measuring quality. Then we will be able to identify specific tools used for measuring this variation Variation in the production process leads to quality defects and lack of product consistency. The Intel Cor- poration, the world’s largest and most profitable manufacturer of microprocessors, understands this, ‘Therefore, Intel has implemented a ‘program it alls“copy-exactly” at all its manufacturing facilities. ‘The idea is that regardless of whether the chips are made in Arizona, New ‘Mexico, Leland, or any of its other plants, they are made in exactly the “ ‘same way. This means using the same equipment, the same exact materials, and workers performing the same tasks in the exact same order. The level of detail to which the “copy-exactly” concept goes is meticulous. For example, when a chipmaking machine was found to be a few feet longer at one facility than another, Intel made them match, When water quality was found to be different at one facility, Inte instituted a puritica tion system to eliminate any differences. Even when a worker was found polishing ‘equipment in one direction, he was asked to doit in the approved circular pattern. Why such attention to exactness of detail? The reason is to minimize all variation, Now let’ look atthe different types of variation that exist. Intel Corporation ‘www.ntel.com174 * CHAPTER 6 STATISTICAL QUALITY CONTROL MMH SOURCES OF VARIATION: COMMON AND ASSIGNABLE CAUSES If you Took at botles ofa soft drink in a grocery store, you will notice that no two bottles are filled to exactly the same level Some are filled slightly higher and some slightly lower. Similarly, i you look at blueberry mutfins ina bakery, you wil notice that some are slightly larger than others and some have more blueberries than others. ‘These types of differences are completely normal. No two products are exactly alike bpocause of slight differences in materials, workers, machines, tools, and other factors. ‘These are called common, or random, causes of variation. Common causes of varia tion are based on random causes that we cannot identify. These types of variation are Random ausesthatcannot — ynayoidable and are due to slight dtferencesin procesing, Monies ‘An important task in quality contol is to find out the range of natural random io in a process. For example, if the average bottle ofa soft drink called Cocoa Fizz contains 16 oances of liquid, we may determine thatthe amount of natural va ation is botween 15.8 and 16.2 ounces. If this were the case, we Would monitor the production process to make sure thatthe amount stays within this range. If produc- tion goes out of this range—bottles are found to contain on average 15.6 ounces— this would lead us to believe that there is a problem with the process because the va ation i greater than the natural random variation. ‘The second type of variation that can be observed involves variations where the > Awigaablecausesof causes can be precisely identitied and eliminated. These are called assignable causes variation of varlation, Examples of this type of variation are poor quality in raw materials, an Causa tht bene employee who needs more taining or a machine in need of repair In each ofthese atin examples the problem can be identified and corrected. Aso ifthe problem is allowed to persist, it wll continue to create a problem in the quality ofthe product. In the ex- ample of the soft drink bottling operation, botles filled with 15.6 ounces of liquid ‘would signal a problem. The machine may need to be readjusted. This would be an assignable cause of variation. We can assign the variation to 2 particular cause (ma- chine needs tobe readjusted) and we can correct the problem (readjust the machine). Np esc River Stas Descriptive statistics can be helpful in describing certain characteristics of a product, and a process, The most important descriptive statistics are measures of central ten- dency such as the mean, measures of variability such as the standard deviation and range, and measures of the distribution of data, We first review these descriptive sta- istics and then see how we can measure their changes. The Mean In the soft drink bottling example, we stated that the average bottle is filled with Mean average) 16 ounces of liquid. The arithmetic average, or the mean, isa statistic that measures Asiatic that mesures the the central tendency ofa set of data. Knowing the central point of ase of data is highly central tendency of tof important, just think how important that number when you receive tet scores! he. To compute the mean we simply sum all the observations and divide by the total ‘number of observations. The equation for computing the mean is x,44159_06_p171-218 2/6/04 10106 AM Page 175 STATISTICAL PROCESS CONTROL METHODS * 175 where = = the mean servation j,i = 1,5 umber of observations The Range and Standard Deviation In the bottling example ve also stated that the amount of natural variation in the bottling process is between 15.8 and 16.2 ounces. This information provides us with the amount of variability of the data. It tells us how spread out the data is around the ‘mean, There are txt measures that can be used to determine the amount of variation in the data. The first measure isthe range, which is the difference between the largest and smallest observations. In our example, the range for natural variation is 04 ‘Another measure of variation is the standard deviation. The equation for comput ing the standard deviation is Sue where o = standard deviation ofa sample = the mean 5 = observation = et ihe number of observations in the sample ‘Small values of the range and standard deviation mean that the observations are closely clustered around the mean, Large Values of the range and standard deviation ‘mean that the observations are spread out around the mean. Figure 6-1 illustrates the differences between a small and a large standard deviation for our bottling operation. You can see that the figure shows two distributions, both with a mean of 16 ounces. However, in the first distribution the standard deviation is large and the data are spread out far around the mean. In the second distribution the standard deviation is ‘small and the data are clustered close to the mean, Distribution of Data A third descriptive statistic used to measure quality characteristics is the shape of the distribution of the observed data. When a distribution is symmetric, there are the same number of observations below and above the mean. This is what we commonly find when only normal variation is present in the data, When a disproportionate number of observations are either above or below the mean, we say that the data hasa skewed distribution, Figure 6-2 shows symmetric and skewed distributions for the bot- ting operat > Range “Thedifferencebotwoon the largest and smallest obervations in ct of dat, > Standard deviation A statistic that measores the ‘mount of data dispersion roan the mean, STATISTICAL PROCESS CONTROL METHODS qu Statistical process control methods extend the use of descriptive statistics to monitor the quality of the product and process. As we have learned so far, there are common and assignable causes of variation in the production of every product. Using statistical process control we want to determine the amount of variation that is common or nor: ‘mal. Then we monitor the production process to make sure production stays within —b—44159_06_p171-218 2/5/04 6132 PM Page 176 so 176 * CHAPTER 6 STATISTICAL QUALITY CONTROL > contro chart graph that shows whether a sample of data al within the common or ermal ange of > Outofcontrol “The station in which a plot of data falls ots pret contol it FIGURE 6-3 Quality conte char for Cocoa Fizz FIGURE 6-1 Normal distributions with varying standard deviations FIGURE 6-2) Difcrences hetwoon symmetric and skewed distributions this normal range. That is, we want to make sue the process is in a state of control. The ‘most commonly used too! for monitoring the production process is a control chart. Different types of control charts are used to monitor different aspects of the produc tion process. In this section we will earn how to develop and use control charts. Developing Control Charts A control chart (also called process chart or quality control chart) is a graph that shows whether a sample of data falls within the common or normal range of varia- tion. A control chart has upper and lower control limits that separate common from assignable causes of variation, The common range of variation is defined by the use of Control chart limits. We ay that a process is out of control when a plot of data reveals that one or more samples fall outside the control limits. Figuee 6-3 shows a control chart for the Cocoa Fizz bottling operation. ‘The x axis represents samples (#1, #2, #3, ec.) taken from the process overtime. The y axis rep- resents the quality characteristic that is being monitored (ounces of liquid). The cen- ter line (CL) of the control chart is the mean, or average, of the quality character that is being measured, In Figure 6-3 the mean is 16 ounces. The upper control limit (UCL) is the maximum acceptable variation from the mean for @ process that isin a state of control. Similarly, the lower contol limit (LCL) isthe minimum acceptable variation from the mean for a process that is ina state of control In our example, theSTATISTICAL PROCESS CONTROL METHODS * 177 ‘upper and lower control limits are 16.2 and 15.8 ounces, respectively. You can see that if a sample of observations falls outside the control limits we need to look for assigna- ble causes. "The upper and lower control limits on a control chart are usually set at #3 stan- dard deviations from the mean. If we assume that the data exhibit a normal distribu tion, these control limits will capture 99.74 percent of the normal variation, Control limits can be set at +2 standard deviations from the mean. In that case, control limits ‘would capture 95.44 percent ofthe values. Figure 6-4 shows the percentage of values that fall within a particular range of standard deviation, Looking at Figure 6-4, we can conclude that observations that fall outside the set range represent assignable causes of variation, However, there is a small probability that a value that falls outside the limits is stil due to normal variation. ‘This is called Type | error, with the error being the chance of concluding that there are assignable causes of variation ‘when only normal variation exists. Another name for this is alpha risk (a), where alpha refers to the sum of the probabilities in both tails of the distribution that falls outside the confidence limits. The chance of this happening is given by the percentage or probability represented by the shaded areas of Figure 6-5. For limits of +3 standard deviations from the mean, the probability ofa ‘Type I eror is 264% (100% — 99.74%), whereas for limits ‘of £2 standard deviations it is 4.56% (100% — 95.44%) Types of Control Charts ‘Control charts ae one of the most commonly used tools in statistical proces contro “They can be used to measure any characteristic of a product, such asthe weight of a cereal box, the number of chocolates in a box, or the volume of bottled water. The diferent characteristics that can be measured by control charts can be divide into ‘two groups: variables and attributes. A control chart for variables is used to monitor > Variable characteristics that can be measured and have a continuum of values, such as height, A product characeristicthat ‘weight, or volume. A Soft drink bottling operation is an example of a variable mea-__ canbe mesuraiand has sure, since the amount of lguid in the bottles is measured and can take on a number jaye ees Of different values. Other examples are the weight of a bag of sugar, the temperature ofa aking ovens or the diameter of plastic tbing FA ath eect ve adc becounted. FIGURE 6.4) Percentage of values captured by der Chance of Type evr for 30° anges of standard deviation (Gigma-standard deviations)44159_06_p171-218 2/5/04 6132 PM Page 178 so 178 * CHAPTER 6 STATISTICAL QUALITY CONTROL > xcarchart A contra chart usd to ‘monitor changes in the mean value of a process. A control chart for attributes, on the other hand, is used to monitor characteristics that have discrete values and can be counted. Often they can be evaluated with a sim= ple yes or no decision. Examples include color, taste, or smell. The monitoring of attributes usually takes less time than that of variables because a variable needs to be measured (eg. the bottle of soft drink contains 15.9 ounces of liquid). An attribute requires only a single decision, such as yes or no, good or bad, acceptable or unaccept- able (eg. the apple is good or rotten, the meat is good or stale, the shoes have a defect, for do not have a defect, the lightbulb works or it does not work) or counting the number of defects (eg, the number of broken cookies in the box, the number of dents in the car, the number of barnacles on the bottom of a boat). Statistical process control is used to monitor many different types of variables and attributes. In the next two sections we look at how to develop control charts for vai- ables and control charts for attributes. Control charts for variables monitor characteristics that can be measured and have a continuous scale, such as height, weight, volume, or width. When an item is inspected, the variable being monitored is measured and recorded, For example if we were produc- ing candles, height might be an important variable, We could take samples of candles and _measure their heights. Two of the most commonly used control charts for variables mon- itor both the central tendency of the data (the mean) and the variability ofthe data ( ther the standard deviation or the range). Note that each chart monitors a diferent type of information, When observed values go outside the control limits, the process is as sumed not to be in control Production is stopped, and employees attempt to identily the cause of the problem and correct it. Next we look at how these charts are developed, Mean (x-Bar) Charts ‘A. mean control chart is often referred to as an acbar chart. It is used to monitor changes in the mean of a proces. To construct a mean chart We frst need to construct the center line of the chart, To do this we take multiple samples and compute their means, Usully these samples are small, with about four or five observations. Each sample as is own mean, x. The enter line ofthe charts then computed as the mean of all & sample means, where k is the number of samples: Rte tek k ‘To construct the upper and lower control limits of the chart, we use the following formulas: Upper control limit (UCL) = + 20, Lower control limit (LCL) the average ofthe sample means standard normal variable (2 for 95.4496 confidence, 3 for 99.74% confidence) standard deviation of the distribution of sample means, computed as on population (process) standard deviation ‘n= sample size (number of observations per sample) Example 6.1 shows the construction of a mean (x-bar) chart. where —b—‘CONTROL CHARTS FOR VARIABLES * 179 ‘A quality control inspector atthe Cocoa Fiz soft drink company has taken twenty-five samples with {four observations each ofthe volume of bots filed, The dsta end the comptad mane af shown inthe table If the standard deviation ofthe botlng operation is 0.18 ounces, se this information Constructing a ta develop contro limits of thre standard deviations for the battling operation, Mean (x-Bar) Chart Obsersations Sample (bottle volume in ounces) Average 72 3 6 Number TEAS (et? ISAS 1503 1897 1612 1600 1585 1601 1599 1600 1591 1596 1583 1592 1620 1585 1574 1593 1503 1574 1586 1621 1610 1598 1594 1601 1614 1603 1603 1575 1621 1601 1586 1596 IS82 1554 1602 1594 1593 604 1508 1583 1598 1596 Wet 1586 1594 1589 1583 1611 1600 1601 1582 1599 1572 1585 162 1615 1596 85 15:76 1578 1598 1583 1573 1584 1596 1610 1591 1620 1601 1610 1589 1605 1612 1608 1583 1594 1599 1601 1593 1581 1568 15.86 1578 1604 1611 1612 1601 1584 1592 1605 1612 1598 592 16.09 1612 1593 1602 1602 1600 1588 1600 1508 1582 1589 1589 1500 1573 1573 15931586 TeO1 1589 1586 1594 1578 1592 1598 1504 BRIS * Solution “The center lin ofthe control data isthe average ofthe samples s9a7s Fo = 15.95 ce ved Fan 198-+3( Hf) - 10s te. eee eet¥06_p171-218 2/5/04 6132 PM Page 180 so 180 * CHAPTER 6 STATISTICAL QUALITY CONTROL “The reaing contol chart ke ok ——— Sarge Mea “This can also be computed using a spreadsheet as shown. 2 oe | Sample mum | —Oos] o0e2] 0123] aa zt Tees | Tee | Tees Tso BI) a] | tee | Yeo | toa 1600027, eT 1508—[—bar, il 6 [1608 | 1601 | 16.4 1603030 2) te [tee | tear | toe 1500029. a 1602 —| 030, ae ete aa urea ef Sapa] 7 srs | awe | Naber Gisele per saree] — 35 (eT 38 TCONTROL CHARTS FOR VARIABLES * 181 as] 7 3 | Computations for Bar Cher cH ‘Qveral Moan (Keer bay = | 7555 a1 T Sigma for Process =| — 0-14 az ‘Sandard €or ofthe Mean =| — 0.07 a 3 a4 rs ro a6 15:14 bApar-voerve | ar 6.16 s Another way to construct the control limits is to use the sample range as an estimate of the variability of the process, Remember that the range is simply the dif. ference between the largest and smallest values in the sample. The spread of the range can tell us about the variability of the data. In this case control limits would be constructed as follows: Upper control limit (UCL) = ¥ + A2R -AR Lower control limit (LCL) where 2 R A average of the sample means ab erage range ofthe samples € factor obsained from Table 6-1 Notice that A; isa factor that includes three standard deviations of ranges and is de- pendent on the sample size being considered. A quality conta inspector at Cocoa Fz using the data fom Fsample 6.11 deep contol aries limits. f he average range (R) fr the twonty-fve samples is_29 ounces (computed as) andthe average mean () of the observations i 1595 ounces, develop threesigma contri Constructing Dotling operation. a Mean (x-Bar) Chart from the * Solution ‘Sample Range 15.95 ounces 29 “The value of Az is obtained from Table 6.1. For n = 4, A; = 73, This lads to the following limits GL = 1595 ounces UCL =x +A, R= 1595 + (7329) = 166 a, R= 1595 ~ (73)(29)44159_06_p171-218 2/5/04 6132 PM Page 102 —p— 182 © CHAPTER 6 STATISTICAL QUALITY CONTROL, Factors for thresigma cnt lint of and Rehare Sours: Factors adapted fa the ASTM Manat on Quality Cont of tre > Range ) chart ‘Acontrol chat that monitors éhanges in the dispersion oF ‘rarabilty of procs. Range (R) Charts Range (R) charts are another type of control chart for variables. Whereas x-bar charts measure shift in the central tendency of the process, range charts monitor the dispersion or variability of the process. The method for developing and using Recharts is the same as that for x-bar charts. The centerline ofthe control chart is the average range, and the upper and lower control limits are computed as fol- lows: where values for D, and D, are obtained from Table 6-1. a44159_06_p171-218 2/5/04 6132 PM Page 193 CONTROL CHARTS FOR VARIABLES * 183 “The quailty contol ngpectrat Cocoa Fiz would ike to develop 2 range (R) char inorder to mon itor volume dispersion in the bottling precss. Use the data from Example 6.1 to develop contre limits fr the sample range * Solution From the data in Example 6. you can sce thatthe average sample range: =n 3 029 naa From Table 61 for 2.28 (02) = 0612 Let =D, =0(029) ‘Theresuing contol chart is: Using Mean and Range Charts Together You can sce that mean and range charts are used to monitor different variables ‘The mean or x-bar chart measures the central tendency of the process, whereas the range chart measures the dispersion or variance of the process. Since both vari- ables are important, it makes sense to monitor a process using both mean and —b— Erne) Constructing a Range (R) Chart44159_06_p171-218 2/5/04 6132 PM Page 104 so 184 * CHAPTER 6 STATISTICAL QUALITY CONTROL Process sis captured by X-charts sand Rehan Te 89 160 161 162 Men uc. Mean range charts. It is possible to have a shift in the mean of the product but not a change in the dispersion. For example, at the Cocoa Fizz bottling plant the ma- chine setting can shift so that the average bottle filled contains not 16.0 ounces, but 15,9 ounces of liquid. The dispersion could be the same, and this shift would be detected by an x-bar chart but not by a range chart. This is shown in part (a) of Figure 6-6. On the other hand, there could be a shift in the dispersion of the prod- uct without a change in the mean. Cocoa Fizz may still be producing bottles with an average fll of 16.0 ounces. However, the dispersion of the product may have in- creased, as shown in part (b) of Figure 6-6. This condition would be detected by a range chart but not by an x-bar chart, Because a shift in either the mean or the range means that the process is out of control, itis important to use both charts to monitor the process Control charts for attributes are used to measure quality characteristics that are counted rather than measured. Attributes are discrete in nature and entail simple yes-or-no decisions. For example, this could be the number of nonfunctioning lightbulbs, the proportion of broken eggs in a carton, the number of rotten ap- ples, the number of scratches on a tile, or the number of complaints issued. Two —b—44159_06_p171-218 2/5/04 6132 PM Page 185 so CONTROL CHARTS FOR ATTRIBUTES * 185 of the most common types of control charts for attributes are p-charts and c-charts. P-charts are used to measure the proportion of items in a sample that are detective. Examples are the proportion of broken cookies in a batch and the pro- portion of cars produced with a misaligned fender. P-charts are appropriate when, both the number of defectives measured and the size of the total sample can be ‘counted. A proportion can then be computed and used as the statistic of mea~ surement. C-charts count the actual number of defects. For example, we can count the num- ber of complaints from customers in a month, the number of bacteria on a petri dish, ‘or the number of barnacles on the bottom ofa boat. However, we carmot compute the proportion of complaints from customers, the proportion of bacteria on a petri dish, ‘or the proportion of barnacies on the bottom of a boat. Problem-Solving Tips The primary difeence between using »p-chart anda chat is 8 fllows ‘A pchart is used when both the total sample sze and the nuviber of defects can be computed ‘A e-chartie weed when we can compte ony the umber of defects but snot compute the roper- tion that is defect P-Charts Pcharts are used to measure the proportion that is defective in a sample. The com- > p-chart ptation of the center fine a well as the upper and lower control imits similar to A cont! car that monitors ‘the computation for th other kinds of control charts. The centerline i computed asthe Pporon of éeectsina the average proportion defective in the population, p. This is obtained by taking a "™™"* ‘numberof samples of observations at random and compting the average value of p across all samples. "To construct the upper and lower control limits for ap-chart, we use the following formulas: he standard deviation of the average proportion def AAs with the other charts, zs selected to be either 2 oF 3 standard deviations, depend- 1g.0n the amount of data we wish to capture in our control limits, Usually, however, they are set at 3, “The sample standard deviation is computed as follows: where186 * CHAPTER 6 STATISTICAL QUALITY CONTROL ‘A production manage at 3 ce manufacturing plant as ingpecte the numberof dlc te in tony andor samples with twenty observations each Flowing re the umber of sci ice Constructing a [| fou incich simple: p-Chart z Number of Number of Sample Defective Obsensationt Number Ties Sampled 2 20 20 2» 2 20 2» Ld 2 20 2» 2 20 2» 2 20 » 2» 20 » 2 7 Construct throe-sgma contro chat (2 = 3) with this information * Solution The centerline ofthe chart is total numberof defoctve ies ‘otal number oF observations D _ [aos _ VN — 67 = P+ =(o}) = 10+ 36067) = 301 =F ~ (a5) ~ 40 — 36.067) = —.101 — {In this example the lower conto imi s negative, which somtimes occurs because the computa tion isan approximation ofthe binomial distribution. When this occ, the ICL is rounded 4p to zero because we cannot have a negative contro it44159_06_p171-218 2/6/04 10106 AM Page 187 @ CONTROL CHARTS FOR ATTRIBUTES * 187 “The resulting contol chart a fllows: “This can also be computed using aspreadshet as shown below. 2 To cata -| 0700 Loner Col Um -| 0000 0G: Upper caretur =] 0201 ~—[—s [6 o 2 [Constructing a p-Chart A I | Sat ah S| — a 5 Tinie Sarpes| —2 oatetve | sampiee |" “Tree a] x “a7 6] 2 ‘ef 1 22 o ase [Capua Tor EC = bar =| 0100 3 ‘Sama p= | 00a 7 a nl ar mH 3k =44159_06_p171-218 2/7/04 5 AM Page 108 so 188 © CHAPTER 6 STATISTICAL QUALITY CONTROL > chart contol chart ws to tmanitor the number of dsfcts per unit. Computing a C-Chart x -Charts C-charts are used to monitor the number of defects per unit. Examples are the ‘number of returned meals in a restaurant, the number of trucks that exceed their ‘weight limit ina month, the number of discolorations on a square foot of carpet, and the number of bacteria in a milliliter of water. Note that the types of units of ‘measurement we are considering are a period of time, a surface area, or a volume of liguid, The average number of defects, 2, isthe center line of the control chart. The upper and lower control limits are computed as follows: ucL =2+2\e LcL ‘The numberof week customer complaints are monitored ata large hotel using a <-char. Com. plaints have been recorded ove the past twenty weeks Develop thre-sgma contro limits using the following data: ‘Tota Wek TITS CTT OTR ee No.of Complains 323133213 13 421113223 4 Solution ‘The average number of complains per weeks f = 22. Therefore 2 ucL=2+ @=22 + 3/22 = 665 uci =2~ 2¥e= 22 - N22= 2250 As in the previous cumple, the LCL is negative and should be rounded up to zero. Fllowing is the sontol chart for this example:CONTROL CHARTS FOR ATTRIBUTES * 189 ‘This an alo be computed using spreadsheet as shown below. x z 2 [Computing a C-Chart amber of Week | _compaints a a Ge 2 | Computations for aC-Chart =] 2 I ‘ebar=| 22 25 |__Zavalus tor contolchars=|__8 | oar =aanvico7) = oe 20 [Sema e= Tanacaar| [ost -co8] 31 a CECE ODT z ‘Ch Geriortine =| 220 [cw -cravvcwar ose] 3| UCL Loner Conte umit-=| 0.00 34[ UCL Unper Contatti =| 6.65 Before You Go On ‘We have discussed several types of statistical quality control (SQC) techniques. One category of SQC techniques consists of descriptive statistics such as the mean, range, and standard deviation, These tools are used to de- scribe quality characteristics and relationships. Another category of SQC techniques consists of statistical process control (SPC) methods that are used to monitor changes in the production process, To understand SPC methods you must understand the differences between common and assignable causes of variation. Common, —b—44159_06_p171-218 2/5/04 6132 PM Page 190 so 100 * CHAPTER 6 STATISTICAL QUALITY CONTROL > Process capability ‘Thesbility of production proces to meet or exceed preset specications, > Product specications Preset ranges of acceptable quality characterises. So far we have discussed ways of monitoring the production process to ensure that ina state of control and that there are no assignable causes of variation. A critical aspect, of statistical quality control is evaluating the ability of a production process to meet or exceed preset specifications. This is called process capability. To understand exactly ‘what this means, e's look mote closely at the term specification. Product specifica in this preset range. Otherwise, the product is not acceptable, Prod- uct specifications, of tolerance limits, are usually established by design engineers or product design specialists. For example, the specifications for the width of a machine part may be specified as 15 inches +3. This means that the width of the part should be 15 inches, though it is, acceptable if it falls within the limits of 14.7 inches and 15.3 inches. Similarly, for Cocoa Fizz, the average bottle fll may be 16 ounces with tolerances of +2 ounces. Although the bottles should be filled with 16 ounces of liquid, the amount can be as low as 15.8 or as high as 16. ounces. ‘Specifications for a product are preset on the basis of how the product is going to be used or what customer expectations are. As we have learned, any production process has a certain amount of natural variation associated with it. To be capable of producing an acceptable product, the process variation cannot exceed the preset spec- itications. Process capability thus involves evaluating process variability relative to preset product specifications in order to determine whether the process is capable of producing an acceptable product. In this section we will larn how to measure process capability Measuring Process Capability Simply setting up control charts to monitor whether a process is in control does not guarantee process capability. To produce an acceptable product, the process must be capable and in control before production begins. Let's look at three examples ff process variation relative to design specifications for the Cocoa Fizz soft drink company. Lets sy that the specification for the acceptable volume of liquid is preset at 16 ounces *.2 ounces, which is 15.8 and 16.2 ounces. In part (a) of Figure 6-7 the process produces 99.74 percent (three sigma) of the product with volumes between 15,8 and 16.2 ounces. You can see that the process variability closely matches the pre- set specifications. Almost al the output fills within the preset specification range. —b—44159_06_p171-218 2/5/04 6132 PM Page 191 so PROCESS CAPABILITY * 191 In part (b) of Figure 6-7, however, the process produces 99.74 percent (three sigma) of the product with volumes between 15.7 and 16.3 ounces. The process vari- ability is outside the preset specifications. A large percentage of the product will fall ‘outside the specified limits. This means that the process is not capable of producing the product within the preset specifications. Part (c) of Figure 6-7 shows that the production process produces 99.74 percent (three sigma) of the product with volumes between 15.9 and 16.1 ounces. In this case ‘the provess variability is within specifications and the process exceeds the minimum. capability Process capability is measured by the process capability index, C,, which is com- ted as the ratio ofthe specification width tothe width ofthe proces variability: An ade sl tome proces capability. __ specification width __USL ~ LL process width a ‘where the specification width is the difference between the upper specification limit (USL) and the lower specification limit (LSL) of the process. The process width is y ae 788 169 16 ‘ea 169 160 1 Process "a) Process variably moots speatesion wih (by Process vatobity cusie specfeaton wy Relationship between process variability and specification width (@) Process variaitywitinspocteation wd) —b—44159_06_p171-218 2/5/04 6132 PM Page 192 —p— 102 * CHAPTER 6 STATISTICAL QUALITY CONTROL Computing the C, Value at Cocoa Fizz computed as 6 standard deviations (60) of the process being monitored. The reason Wwe use Geis that most of the process measurement (99.74 percent) falls within 3 standard deviations, which isa total of 6 standard deviations. ‘There are three possible ranges of values for C, that also help us interpret its value: G A value of G, equal to means thatthe process variability just meets speci- " fications, asin Figure 6-7(a). We would then say that the process is minimally capable. G, = 1:A value of G, below 1 means thatthe process variability is outside the range of specification as in Figure 6-7(b). This means thatthe process is not ca- pable of producing within specification and the process must be improved. G21: A value of G, above 1 means that the process variability is tighter than specifications and the process exceeds minimal capability, as in Figuee 6-716) ‘AG, value of 1 means that 99.74 percent of the products produced wil fall within the specification limits. This also means that 26 percent (100% — 99.74%) of the products will not be aeeptable. Although this percentage sounds very small, when we think oft in terms of parts per million (ppm) we can see tat it can stil result in a ot of defects. The number 26 percent corresponds to 2600 parts per milion (ppm) de- fective (0.0026 X 1,000,000). That number can seem very high if we think of it in terms of 2600 wrong prescriptions out ofa million, or 2600 incorrect medical proce- dures ont ofa millon, or even 2600 malfunctioning aircraft out ofa millon, You can see that this numberof defects is still high. The way to reduce the ppm defective isto Increase process capability,44159_06_p171-218 2/5/04 6132 PM Page 193 so PROCESS CAPABILITY © 193 is valuable in measuring process capability. However, it has one shortcoming: it assumes that process variability is centered on the specification range. Unfortunately, this is not always the case. Figure 6-8 shows data from the Cocos Fiza example. In the ‘igure the specification limits are set betvicen 15.8 and 16.2 ounces, with a mean of 16.0 ounces. However, the process variation is not centered: it has a mean of 159 ounces. Because of this, a certain proportion of products will fall outside the specification range. ‘The problem illustrated in Figure 6-8 is not uncommon, but it can lead to mistakes in the computation of the C, measure. Because of this, another measure for process capability is used more frequently: USL— pe _p—Ist. Goon SAS) the mean of the process the standard deviation of the process where ‘This measure of process capability helps us address a possible lack of centering of the [process over the specification range. To use this measure, the process capability of cach half of the normal distribution is computed and the minimam of the two is used. [Looking at Figure 6-8, we can see thatthe computed G, ist: Process mean w= 159 Process standard deviation IsL=158 Ust = 162 oa © S067 ‘The G, value of 1.00 leads ws to conclude that the process capable, However, from the graph you can se that the proces i mor centred on the speciation range FIGURE 6-8 Proces variably not centered across specification width44159_06_p171-218 2/5/04 6132 PM Page 194 104 * CHAPTER 6 STATISTICAL QUALITY CONTROL and is producing out-of-spec products. Using only the C, measure would Iead to an incorrect conctusion in this case, Computing Cy gives us & different answer and leads tus toa different conclusion: aoe 16.2 59 = 158 30) 30) min (1.00, 0.33) Gata The computed C,, value is less than 1, revealing thatthe process is not capable. Camp th Gq meas of proces capably forthe following machine and interpret the indings ‘What value wold you have obtained wth the C mens Computing the Gu Value Machine Dats: USL = 110 ts Procsss = 70 * Solution ‘To compute the Cy measure of process capability: ee (eee ee baer oa ae) min" 300) * 3410) = min (167,033) =033 ‘This means thatthe proces is not capable. The Cy measure af process capability gives us the following measure, o tio) leading us to believe that the process capable. The reason for the diferencein the measures that the process is not centered onthe specification rangeas shown in Figure 69.44159_06_p171-218 2/5/04 6132 PM Page 195 ie PROCESS CAPABILITY * 195 FIGURE 6-9 Process variability not centered across specification width for Example 67 Process capability af machines isa crial eement of statistical proces contol. Six Sigma Quality L ‘The term Six Sigma® was coined by the Motorola Corporation in the 1980s to oe describe the high level of quality the company was striving to achieve. Sigma (cr) stands for the number of standard deviations ofthe process. Recall that 3 sigma (@) ‘means that 2600 ppm are defective. The level of defects associated with Six Sigma is approximately 3.4 ppm. Figure 6-10 shows a process distribution with quality levels of| =3 sigma (a) and =6 sigma (o). You can see the difference in the number of defects produced. FIGURE 6-10 > Six Sigma quality ‘Abigh level of qualty € sessed with, Spproximately 3a defective pants per milion, PPM defestiv for = vers ar ‘quality (not scale) eek44159_06_p171-218 2/5/04 6132 PM Page 196 so 106 * CHAPTER 6 STATISTICAL QUALITY CONTROL Motorola, Inc. wwwmotorola.com, ene ceth e “There are two aspects to implementing the Six Sigma concept. The first is the use of technical tools to identify and eliminate causes of quality problems. These technical tools include the statistical quality control tools discussed in this chapter. They also include the problem-solving tools discussed in Chapter 5, such as cause-and-effect di- grams, flow charts, and Pareto analysis. In Six Sigma programs the use of these tech- nical tools is integrated throughout the entire organizational system, The second aspect of Six Sigma implementation is people involvement. In Six Sigma all employees have the training to use technical tools and are responsible for rooting out quality problems. Employees are given martial ars tiles that reflect their skills in the Six Sigma process. Black belis and master black bels are individuals who have extensive training in the use of technical tools and are responsible for carrying ‘out the implementation of Six Sigma. They are experienced individuals who oversee the measuring, analyzing, process controlling, and improving. They achieve this by acting 2s coaches, team leaders, and facilitators of the process of continuous improve ‘ment. Greer belts are individuals who have sufficient training in technical tools to serve on teams or on small individual projects. Suceessful Six Sigma implementation requires commitment from top company Teaders. These individuals must promote the process eliminate barriers to implemen- {ation, and ensure that proper resources are available. A key individual is a champion of Six Sigma, This isa person who comes from the top ranks of the organization and is responsible for providing direction and overseeing all aspects of the process. Acceptance sampling, the third branch of statistical quality control, refers to the process of randomly inspecting a certain number of items from a lot or batch in or- dor to decide whether to accept ot reject the entire batch, What makes acceptance —b—9_06_p171-218 2/5/04 6132 PM Page 197 ie ACCEPTANCE SAMPLING * 197 sampling different from statistical process control is that acceptance sampling is per- formed either before or affor the process, rather than during the process. Acceptance sampling before the process involves sampling materials received from a supplies, such as randomly inspecting crates of fruit that will be used in a restaurant, boxes of ¢glass dishes that will be sold in a department store, or metal castings that will be ‘used in a machine shop. Sampling afier the process involves sampling finished items that are to be shipped either to a customer or to a distribution center. Examples in- clude randomly testing a certain number of computers from a batch to make sure they mect operational requirements, and randomly inspecting snowboards to make sure that they are not defective. ‘You may be wondering why we would only inspect some items in the lot and not the entire lot. Acceptance sampling is used when inspecting every item is not physi- cally possible or would be overly expensive, or when inspecting a large number of items would lead to errors due to worker fatigue. This last concern is especially im- portant when a large number of iems are processed in a short period of time. An- ‘ther example of when acceptance sampling would be used is in destructive testing, such as testing eggs for salmonella or vehicles for crash testing. Obviously, in these cases it would not be helpful to test every item! However, 100 percent inspection does ‘make sense if the cost of inspecting an item is less than the cost of passing on a defec- tive item. {As you will see in this section, the goal of acceptance sampling is to determine the criteria for acceptance or rejection based on the size of the lot, the size of the sample, and the level of confidence we wish to attain. Acceptance sampling can be used for both attribute and variable measures, though it is most commonly used for attributes. In this section we will look at the different types of sampling plans and at ways to evaluate how well sampling plans discriminate between good and bad lots Sampling Plans A sampling plan isa plan for acceptance sampling that precsaly specifies the parame- ters of the sampling process and the acceptance/rejection criteria. The variables to be specified include the sizeof the lot (), the size of the sample inspected from the lot (1), the number of defects above which a lot is rejected (c), and the number of sam- ples that willbe taken, here are different types of sampling plans. Some call for single sampling, in Which a random sample is drawn from every lot. Each item in the sample is exam- ined and is labeled as either “good” or “bad.” Depending on the number of defects or “bad” items found, the entire lot is either accepted or rejected. For example, a lot size (0f 50 cookies i evaluated for acceptance by randomly inspecting 10 cookies from the lot. The cookies may be inspected to make sure they are not broken or burned. If 4 ‘or more of the 10 cookies inspected are bad, the entire otis rejected. In this exam- ple, the lot size N = 50, the sample size n= 10, and the maximum number of defects at which a lot is accepted is c = 4, These parameters define the acceptance sampling plan, ‘Another type of acceptance sampling is called double sampling. This provides an op- portunity to sample the lot a second time if the results of the first sample are inconclusive. In double sampling we first sample alot of goods according to preset crite- ria for definite acceptance or rejection, However, ifthe results fll in the middle range, —b— ‘Sampling involves andomly inspecting items from alot, > Sampling plan Aplan for aceptanee sampling that precisely Specifies the parameters of the sampling process and the acceptanelejection.108 * CHAPTER 6 STATISTICAL QUALITY CONTROL > Operating characteristic (oCheurve A graph that shows the probability or chance af Acepting2 lot given various proportions of defects nthe fo. > Acceptable quality level (aol) The small percentage of dest that consumers re wiling to scp. Lot tolerance percent defective (LTPD) “The upper limi ofthe percentage of defective items nates ate willing tolerate they are considered inconclusive and a second sample is taken. For example, a water treatment plant may sample the quality of the water ten times in random intervals throughout the day. Criteria may be set for acceptable or unacceptable water quality, such 38 05 percent chlorine and .1 percent chlorine. However, a sample of water con- taining between .05 percent and .1 percent chlorine is inconclusive and calls for a sec- cond sample of water. In addition to single and double-sampling plans, there are multiple sampling plans. ‘Multiple sampling plans are similar to double sampling plans except that criteria are set for more than two samples. The decision as to which sampling plan to select has a sgreat deal to do with the cost involved in sampling, the time consumed by sampling, and the cost of passing on a defective item. In general, ifthe cost of collecting a sam- ple is relatively high, single sampling is preferred. An extreme example is collecting a biopsy from a hospital patient. Because the actual cost of getting the sample is high, we want to get a large sample and sample only once. ‘The opposite is tue when the cost of collecting the sample is low but the actual cost of testing is high. This may be the case with a water treatment plant, where collecting the water is inexpensive but the chemical analysis is costly. In this section we focus primarily on single sampling plans. Operating Characteristic (OC) Curves {As we have seen, diffrent sampling plans have different capabilities for disriminat- ing between good and bad lots. At one extreme is 100 percent inspection, which has perfect discriminating power. However, asthe sizeof the sample inspected decrease, so does the chance of accepting 2 defective lot. We can show the discriminating power of a sampling plan on a graph by means of an operating characteristic (OC) curve. ‘This curve shows the probability or chance of accepting a lt given various propor- ions of defects in the lot. Figure 6-11 shows atypical OC curve. The x axis shows the percentage of items that are defective in a Tot This is cle “Tot quality” The y axis shows the probability or cance of accepting a lot. You can sce that if we use 100 percent inspection we ace certain of accepting only lots with zero defects. However, asthe proportion of defects in the lot increases, our chance of accepting the lot decreases. For example, we have a 90 percent probability of accepting a lat with 5 percent defects and an 80 percent probability of accepting alot with 8 percent defects. Regardless of which sampling plan we have selected, the plan is not perfect. That is, thote is sill a chance of accepting lots that are “bad” and rejecting "good ots. ‘The steeper the OC curve, the better our sampling plan is for discriminating be- tween “good” and “bad” Figure 6-12 shows three different OC curves, A,B, and C. Curve A is the most discriminating and curve C the least. You can see that the steeper the slope ofthe curve, the more dseriminating is the sampling plan. When 100 percent inspection is not possible, there is a certain amount of rsk for con- sumers in accepting defective lots and a certain amount of risk for producers in 1e- jecting good lots. There isa small percentage of defects that consumers are willing to accept. This is called the acceptable quality level AQL) and is generally inthe order of 1-2 percent. However, sometimes the percentage of defects that pases through is higher than the AQL- Consumers will usually tolerate a few more defects, but at some point the num- ber of dafcts reaches a threshold level beyond which consumers will not tolerate them, This threshold level is called the lot tolerance percent defective (LTPD). The —b—44159_06_p171-218 2/5/04 6132 PM Page 199 so ACCEPTANCE SAMPLING * 199 Example of an operating characteristic (OO) curve (0C curves with itlrentstepness levels and diferent levels of siscrimination ETPD is the upper limit of the percentage of defective items consumers are willing to tolerate. ‘Consumer's risk isthe chance or probability that a lot will be accepted that con-» Consumer's risk tains a greater number of defects than the LTPD limit. Ths is the probability of mak- ‘The chance of scceptinga lot ing @ Type Il error—that is, accepting a lot that is truly “bad.” Consumer's risk or ‘hs! contains a greater ‘Type Il error is generally denoted by beta (8). The relationships among AQL, ETPD, mumbo dfs than the and flare shown in Figure 6-13. Producer's risk isthe chance or probability that alot PIP containing an acceptable quality level will be rejected. This isthe probability of mak- 7 Prwdusers isk ing a Type | error— that is, rejecting a lot that is “good,” It is generally denoted by _camatsing an aceptale alpha (a). Producers risk is also shown in Figure 6-1 ‘ality eel willbe rested. ‘We can determine from an OC curve what the consumer's and producer's risks are, However, these values should not be leit to chance. Rather, sampling plans are uusually designed to meet specific levels of consumer's and producer's risk. For ‘example, one common combination is to have a consumer's risk (B) of 10 percent and a producer’s risk (a) of 5 percent, though many other combinations are possible. Developing OC Curves ‘An OC curve graphically depicts the discriminating power of a sampling plan. To draw an OC curve, we typically use a cumulative binomial distribution to obtain —b—44159_06_p171-218 2/5/04 6132 PM Page 200 so 200 * CHAPTER 6 STATISTICAL QUALITY CONTROL, {An OC curve showing producer’ risk (a) and consumer'srisk (B) Partial Cumlative Binomil Probability Table probabilities of accepting a lot given varying levels of lot defects" The cumulative binomial table is found in Appendix C. A small part of this table is reproduced in ‘Table 6-2. The top of the table shows Values of p, which represents the proportion of defective items in a lot (5 percent, 10 percent, 20 percent, etc.). ‘The left-hand column shows values of », which represent the sample size being considered, and x represents the cumulative number of defects found, Le’s use an example to illus- trate how to develop an OC curve for a specific sampling plan using the informa- tion from Table 6-2. \Wor n> 2pandp = 05 olson ditbuion general ued. —b—40159_06_p171-218 2/5/04 6132 PM Page 201 ACCEPTANCE SAMPLING * 201 Let sy that we want to develop an OC core for samplingplan in whchasampleofn = Sims @UPOTUTTY is drawn from los of N~ 1000 tems, The accept eritra ae setup in such a way that we cep alot fn mor than one dle = 1) found Constructing an 0C Curve * Solution Ls look tthe partial binomil distribution in Table 6-2. Since our criteria requires o sample ‘+= 5, we wil goto the rw where a inthe left-hand column. The" column tll us the Cumulative nrber of defects found at which we ret theft. Since we are not allowing more than fone det we ok for an we that coresponds to. The vowcorzesponing ton — Sand tellus our chance or probability of accepting ts with varios proportions of defects using this Sampling pln For example, with ths sampling plan we have 498.7496 cance of acting aft with 86 dfs. foe move dove the ro we can se hat we have a 9.85% chan of meting Tot with 10% det 0 3.52% chance of accepting aot wth 15% defects anda 73.73% chance of accepting lt with 20% defect Using these alts and those remain inthe ow, we an ea Strat an OC chart for = Sand e= I. This is shown in igre 6-14 FIGURE 6-14 OC cure with n= Sande= 0 0 10 15 0 2s Proportion of Detestve Lot Qual Average Outgoing Quality As we observed with the OC curves, the higher the quality of the lot, the higher isthe ® Average outgoing chance tat it will be accepted, Conversely, the lowe the quality ofthe lot, the greater (SOQ) is the chance that it will be rejected. Given that some Tots are acepted anc some Messe proportion rejected itis useful to compute the average outgoing quality (AO) of lots fo get a sesctvothe eaten wader sense of the overall outgoing quality of the product, Assuming that all Tots ave the the smping pln —b—44159_06_p171-218 2/5/04 6: 202 * CHAPTER 6 STATISTICAL QUALITY CONTROL, Constructing an A0Q Curve same proportion of defective items, the average outgoing quality can be computed as, N-n\ s00= ra *) See ‘1 = the sample size chosen for inspection ‘Usually we assume the fraction in the previous equation to equal 1 and simplify the ‘equation to the following form: A0Q = (Pap ‘We can then use the information from Figure 6-14 to construct an AOQ curve for dif- ferent levels of probabilities of acceptance and different proportions of defects in a Jot As we will see, an AOQ curve is similar to an OC curve. Let’ go back to our inital example, in which we sampled 5 items (n = 5) fom alt of 1000 (NY 1000) with an aceptance range of no more than 1 1) defect. Here we will construct an AOQ ‘urve for this sampling plan and interpret its meaning. Solution Tor the parameters N = 1000, = 5, and ¢ = 1, we cam read the probabilities of Py fram Figure 6-14. Then we cn compute the value of AOQ 3s AQ = (Pe) . Ss 0 6 0 S 0 © 4 P, 907 918s 38527373 “sss S282 “nse “33705621875, AOQ 0499 00191253 1475_1582_1585 1499168 11S 0938 igure 6-15 shows graphical representation of the AOQ values The ADO varies depending on the proportion of defective items inthe lot. The largest value of AOQ, called the average outgoing qual- fy limit (ROQL), is around 15.859. You can ee from Figure 6-15 that the average outgoing quality FIGURE 6-15 TheAOO forn = Sande=1IMPLICATIONS FOR MANAGERS * 203 willbe high for los that ae ether very good or very bad, Fo lots tha have close to 30% of defective items, the AOQ isthe highest. Managers can use this information to compute the worst possible value oftheir average outgoing quality given the proportion of defective items (p. Then this infor- ‘mation can be usa to develop a sampling plan with appropriate levels of discrimination. In this chapter we have learned about a varioty of diferent statistical quality control (SQC) tools that help managers make decisions about product and process quality. However, to use these tools properly managers must make a number of decisions. In this section we discuss some of the most important decisions that must be made when implementing SPC. How Much and How Often to Inspect Consider Product Cost and Product Volume As you know, 100 percent inspection is raraly possible, The question then becomes one of how offen to inspect in order to ‘minimize the chances of passing on defects and stil keep inspection costs manage- able. This decision should be related to the product cost and product volume of what is beeing produced. At one extreme are high-volume, low-cost items, such as paper, pen- cils, nuts and bolts, for which 100 percent inspection would not be cost justified. Also, with such a large volume 100 percent inspection would not be possible because worker fatigue sets in and defects are offen passed on. At the other extreme ae low volume, high-cost items, such as parts that will go into a space shuttle or be used in a ‘medical procedure that requite 100 percent inspection. Most items fall somewhere between the two extremes just described. For these items, frequency of inspection should be designed to consider the trade-off between the cost of inspection and the cost of passing on a defective item. Historically, inspec- tions were set up to minimize these two costs. Today, i is believed that defects of any type should not be tolerated and that eliminating them helps reduce organizational costs. Still, the inspection process should be set up to consider issues of product cost and volume. For example, one company will probably have different frequencies of inspection for different products Consider Process Stability Another issue to consider when deciding how much to inspect is the stability of the process. Stable processes that do not change frequently do not need to be inspected often, On the other hand, processes that are unstable and change often should be inspected frequently. For example, if it has been observed that 2 particular type of drilling machine in a machine shop often goes out of tolerance, ‘that machine should be inspected frequentiy. Obviously, such decisions cannot be ‘made without historical data on process stability. Consider Lot Size ‘The size of the lot or batch being produced is another factor to consider in determining the amount of inspection. A company that produces a small ‘number of large lots will have @ smaller number of inspections than & company that produces a large number of small lots. The reason is that every lot should have some inspection, and when lots are large, there ae fewer lots to inspect. —b—44159_06_p171-218 2/5/04 6133 PM Page 200 so 204 * CHAPTER 6 STATISTICAL QUALITY CONTROL, Where to Inspect Since we cannot inspect every aspect of a process all the time, another important decision is to decide where to inspect. Some areas are less critical than others. Follow- ing are some points that are typically considered most important for inspection, Inbound Materials Materials that are coming into a facility from a supplier or dist bution center should be inspected before they enter the production process. Itisimpor- tant to check the quality of materials before labor is added to it. For example, it would bbe wasteful fora seafood restaurant not fo inspect the quality of incoming lobsters only to later discover that its lobster bisque is bad. Another reason for checking inbound ma terials isto check the quality of sources of supply. Consistently poor quality in materials from a particular supplier indicates a problem that needs to be addressed. Finished Products Products that have been completed and are ready for shipment to customers should also be inspected. This isthe last point at which the product isin the production facility, The quality of the product represents the company’s overall 4uality. The final quality evel is what will be experienced by the customer, and an in- spection at this point is necessary to ensure high quality in such aspects as fitness for use, packaging, and presentation, Prior to Costly Processing During the prosiuction process it makes sense to check Quality before performing a costly process on the product. If quality is poor at that point and the product will ultimately be discarded, adding a costly process will simply lead to waste. For example, in the production of leather armchairs in a furniture fac- tory chair frames should be inspected for cracks before the leather covering is added. Otherwise, if the frame is defective the cost of the leather upholstery and workman- ship may be wasted. Which Tools to Use In addition to where and how much to inspect, managers must decide which tools to use in the process of inspection. As we have seen, tools such as control charts are best, used at various points inthe production process. Acceptance sampling is best used for inbound and outbound materials It is also the easiest method to use for attribute ‘measures, whereas control charts are easier to use for variable measures. Surveys of industry practices show that most companies use conteol charts, especially x-bar and [Recharts because they requite less data collection than p-charts, Statistical quality control (SQC) tools have been widely used in_ manufacturing organizations for quite some time. Manufacturers such 2s Motorola, General Electric, ‘Toyota, and others have shown leadership in SQC for many years. Unfortunately, ser~ vice organizations have lagged behind manuficturing firms in their use of SQC. The primary reason is that statistical quality control requires measurement, and itis difi- cult to measure the quality of a service. Remember that services often provide an in- tangible product and that perceptions of quality are often highly subjective, For example, the quality of a service is often judged by such factors as friendliness and courtesy of the staf and promptness in resolving complaints —b—STATISTICAL QUALITY CONTROL IN SERVICES * 205 {A way to measure the quality of services is to devise quantifiable measurements of the important dimensions of a particular service. For example, the number of com- plaints received per month, the number of telephone rings after which a response is received, oF customer waiting time can be quantified. These types of measurements are not subjective or subject to interpretation. Rather, they can be measured and recorded, As in manufacturing, acceptable control limits should be developed and the variable in question should be measured periodically Another issue that complicates quality control in service organizations is that the service is often consumed during the production process. The customer is often present during service delivery, and there is little time to improve quality. The work= force that interfaces with customers is part of the service delivery. The way to manage this issue is to provide a high level of workforce training and to empower workers to make decisions that will satisfy customers. ‘One service organization that has demonstrated quality leadership is The Ritz-Carlton Hotel Company. ‘This luxury hotel chain caters to trav- clers who seek high levels of customer service. The goal ofthe chain is to be recognized for outstanding service ‘quality. To this end, computer records are kept of regular clients preferences. ‘To keep customers happy, employees are empowered to spend! up to $2,000 an ‘on the spot to correct any customer complaint. Consequently The Ritz-Carlton has re- € ceived a number of quality awards including winning the Malcolm Baldrige National ‘Quality Award twice. Is the only company in the service category to do so Another leader in service quality that uses the strategy of high levels of employee tuaining and empowerment is Nordstrom Department Stores. Outstanding customer service is the goal ofthis department store chain. Its organizational chart places the ‘customer at the head of the organization. Records are kept of regular clients’ prefer- fences, and employees are empowered to make decisions on the spot to satisty cus- tomer wants. The customer is considered to always be right, Serve organizations most aso use satis = zy Gl tools to measure their processes and OPPs rence Intemations monitor perfomance. For example, the " Marriot Is known for regulary collecting tn attoticom data inthe form of gues surveys The com pany randomly surveys as many sa milion ues each yer. The collected data is stored ina lage database and continally exam ined for patterns, such as trends and changes in customer preferences. Statistical techniques are used to analyze the data and provide important information, suchas identiying areas that have the highest impact The Ritz-Cartton Hotel Company, LLC. wwwsritzearton com Nordstrom, Inc. www.nordstrom.com ‘on performance, and those areas that need improvement. This information allows Marriott to provide a superior level of customer service, anticipate customer de- ‘mands, and put resources in service features most important to customers. —b—44159_06_p171-218 2/5/04 6133 PM Page 206 206 * CHAPTER 6 STATISTICAL QUALITY CONTROL, It is easy to see how operations managers can use the tools of SQC to monitor product and process quality. However, you may not readily see how these statistical ‘techniques affect other functions of the organization. In fact, SQC tools require input from other functions, nfla- ‘ence their success, and are actualy used by other organi- ational functions in designing and evaluating teie task, ‘Marketing plays a critical role in setting up prod- uct and service quality standards. It is up to marketing to provide information on current and future quality standards required by customers and those being of- fered by competitors. Operations managers can incor- porate this information into product and process de- sign. Consultation with marketing managers. is essential to ensure that quality standards are being met. At the same time, meeting quality standards is essential to the marketing department, since sales of products are dependent on the standards being met. Finance isan integeal part of the statistical quality control process, because it is responsible for placing f- nancial values on SQC efforts. For example, the finance department evaluates the dollar costs of defects, mea- sures financial improvements that result from tighten- ing of quality standards, and is actively involved in ap- proving investments in quality improvement efforts. Human resources becomes even mote important ‘with the implementation of TQM and SQC methods, as, the role of workers changes. To understand and utilize SQC tools, workers need ongoing training and the ability to work in teams, take pride in their work, and assume higher levels of responsibility. The human resources de- partment is responsible for hiting workers with the right ‘skills and setting proper compensation levels. INSIDE OM Information systems is a function that_makes much ofthe information needed for SOC accesible to all who need it. Information systems managers need to work closely with other functions during the imple- ‘mentation of SQC so that they understand exactly what types of information are needed and in what form. As ‘we have seen, SQC tools are dependent on information, and itis up (0 information systems managers to make ‘that information available. As a company develops ways of using TQM and SQC tools, information systems managers mast be par of this ongoing evolution to en- sure that the company’s information needs are being met. All functions need to work closely together in the implementation of statistical process control. Everyone benefits trom this collaborative relationship: opera tions is able to produce the right product eff. ciently; marketing has the exact product cus- tomers are looking for; and finance can boast of an improved financial picture forthe organization. SQC ako affects various organizational functions through its direct application in evaluating quality p= formance in all areas ofthe organization, SQC tools are rot used only to monitor the production process and censure thatthe product being produced is within speci- fications, As we have seen in the Motorola Six Sigma ex- ample, these tools can be used to monitor both quality levels and defects in accounting procedures, financial record keeping, sales and marketing, office administra. tion, and other functions. Having high quality stan- dards in operations does not guarantee high quality in the organization as a whole. The same stringent stan- dards and quality evaluation procedures should be used in seting standards and evaluating the performance of all organizational functions. ‘The decision to increase the level of quality standard and reduce the number of product defects requires support from every function within operations management, TWo areas of operations management that are particularly affected are product and process design. Process clesign needs to be modified to incorporate customer-defined quality and simpli- fication of design. Processes need to be continuously monitored and changed to build {quality into the process and reduce variation, Other areas that are affected are job design, —b—KEY TERMS * 207 ‘as we expand the role of employees to become responsible for monitoring quality levels ‘and to use statistical quality control tools. Supply chain management and inventory con- ‘rol are also affected as we increase quality standard requirements from our suppliers and ‘change the materials we use. All areas of operations management are involved when in- ‘creasing the quality standard ofa firm. Chapter Highlights EB Statistical quality control (SQC) refers to statistieal tools that can be used by quality professional. Statistical quality control canbe divided into three Bl broad categories descriptive statistics, acceptance sampling, and statistical process control (SPC), Descriptive statistics are use to describe quality ‘characteristics, suchas the mean, range, and vari- ance, Acceptance sumpling isthe process of randomly inspecting a sample of goods and deciding whether to acceptor reject the entire lot. Statistical process control (SPC) involves inspecting a random ‘sample of output from a processand deciding o ‘whether the proces is producing products with ‘characteristics that fll within preset specifications “There are two causes of variation inthe quality of a product or process common causes and assignable ‘causes. Common causes of variation are random causes) that we cannot identify. Asignabl causes of variation are those that canbe identified and eliminate. EX A control chart isa graph used in statistical process Ed control that shows whether a sample of data falls Within the normal range of variation. A control chart has upper and lower contro imits that separate ‘common from assignable causes of variation. Con- ‘rol charts for variables monitor characteristics that) can be measused and have continuum of values, such as height, weight, oF volume. Control chats for Key Terms statistical quality contol SC) 172 out contol 176 Ascrptivestatinice 172 sarisble 177 Setinical prow contel (SPC) 173 tebe 177 ‘xeeplance sampling 173 bar chart 178 omimon cis of rition 174 rang (R) chart 182 sgnabe cases of variation 174 echt 185 mean (average) 174 chart 188 range 175 process capability 190 andar dviton 175 Product specifications 190 conta chart 176 Proce capabiiy inde 191 —b— attributes are used to monitor characteristics that have discrete values and can be counted Control charts for variables include x-bar charts and chars. X-bar charts monitor the mean or average value ofa product characteristic. R-charts monitor the range or dispersion of the values of a product characteristic. Control charts fr attributes include p-charts and ¢-charts,P-chaeis are used 10 monitor the proportion of defects ina sample. C-charts are used to! monitor the actual number of detects in a sample, Process capability i the ability of the production process to meet or exceed preset specifications It is measured by the process capability index, C,, which is computed asthe ratio of the specification with to the width of the process variability. “The term Six Sigma indicates a level of quality in ‘which the number of defects is no more than 3.4 parts per million, “The goal of acceptance sampling is to determine criteria for acceptance or rejection based on lot size, sample size, and the desired level of confidence ‘Operating characteristic (OC) curves are graphs that show the discriminating power ofa sampling plan, It is more dificult to measure quality in services than in manufacturing. The key isto devise quantifiable measurements for important service dimensions. Six Sigma quality 195 sampling lan 197 operating characteristic (OC) curve 198 acceptable quality evel (QL) 198 lot tolerance percent defective (ETPD) 198 consume’ risk 199 producers risk 199) average outgoing quality (409) 20144159_06_p171-218 2/5/04 6133 PM Page 208 so 208 * CHAPTER 6 STATISTICAL QUALITY CONTROL, Formula Review 5. Conteol Limits for Bhar UCL =D, Le. =, 6 Conteol Limits fo p-Chants UCL = B + 2) 2, Standard Deviation a ic. =p— at) 5 Contra Limits forx-Bar Charts Upper sontra limit 7. Control Limits for -Charts_ UCL = @+ 2 (UCL) = 24+ 29, LoL - 24 NE Lame saarbstipbily © ‘c= 2Psfation width, USL LSL ant prosswidh "Go Usp pis 44 Control Limits for x-Bar Charts Using Sample Range as an a= i SES AIS) Ena of Vary ‘Upper control limit 9. Average Outgoing Quality AOQ = (Pp (UCL) =3+ ADR Lower contol init (Wey -F-AR EEC Gu & |) ¢ Probiem 1 ‘A quality contol inspector atthe Crunchy Potato Chip Com- Ifthe standard deviation of the bagging operation i 0:2 ‘any has taken 10 samples with 4 obserations each of the vol- ounces, use the information inthe table ta develop conte in ‘ume of bags filled. The data and the computed means aro its of 3 sandard deviations forthe bagging operation. shown in the following table: Sample of oat Chip on Volumen Ounces hon dhs te ng ote mle Spt Gheaton ombe pe TMH S454 6 ee Mie : Dobe ba he bs SD SHS Bk theca ‘ Be us ws $ oie Be n i , By ous tes : : us fs ts by _us bs 12s 23 12s44159_06_p171-218 2/5/04 6133 PM Page 209 so SOLVED PROBLEMS * 209 Following is the assaciated contol char: “The problem can alsa be solved using a spreadsheet. x Boe oe |Crunchy Potato Chips Company (ameem) Bag Volum ia ‘Qos 3 Obs Number of Saas "Number of bsawations per samo value for contol chars (CL: Center Lina LCL: Lower Control Lint LUCL: Upper Contol Lint eel) S2 ps [elsylelzls[=Jeles[els|=ele[-[5 [fo] [5] ]-|44159_06_p171-218 2/5/04 6133 PM Page 210 so 210 © CHAPTER 6 STATISTICAL QUALITY CONTROL, * Problem 2 Use ofthe sample range to estimate variability an also be ap- The value of A i obtained from Table 6-1. For a= 5, Ay = pled 1o the Crunchy Potato Chip operation. A quality coatrol_58,Thisleads to thefllwing limits: Inspector has taken 4 samples with 5 observations each, mex- ‘ivi the vole of chips per bag Ithe average range forthe THecemterof the contol charts CL = 12.5 ounces, ‘samples i 2 ounces and the average mean of the abeervi= UCL = $4 AsR = 125 + (58)(2) ~ 12.62 tions is 12.5 ounces, develop throesigma control limits forthe - bottling operation, Leh =F A, R= 125 — (58)(2) = 1238, * Solution 12S ounces = Problem 3. "Ten samples with 5 observations each have boea taken from the From Table 6-1 for» = 5: (Crunchy Potato Chip Company plant inorder to test for va ‘ume dispersion in the bagging process The average sample ‘ange was found tobe 3 ounces, Develop contro its forthe sample ang. ‘Therefore, * Solution UcL = D, R= 2.:11(3) = 638 tet = DF = 003) + Problem 4 * Solution eee ee eet eam ed ee elated eae Shurvaionsenh Followingaethe names of dafcivelght cy. =p=——Subberdectve __17._ yg, rensre SSS — «= GP = [ET - o Number Observations Sample Defective __in Sample UCL =p + gy) =.057 + 3(082) = 183 T T 2 ~ doy) = 057 ~ 3.02) = —069 > Bs 5 Ba LCL = p ~ Ag,) = 057 ~ (082) = —069—+0 3 3 Fy 4 1 30 5 ° 0 6 5 0 1 1 Fy 8 1 0 ° 1 0 10 1 30 Toul 7 300) GGonstruct a three-sigma contro chart (= = 3) with this infor mation.906_p171-218 2/5/04 6133 PM ‘This sab solved using a spreadshect x hart for Light Bulb Quali i Sz ‘Number Sampee Sample # [4 Detectives ar =| 00560667 0.042108 Sigma p= iva for conte chars CL: Genter Line -| 005656567] ToLsLower Goniraltimtcl 0 SOLVED PROBLEMS © 211 (cia -suMBSBTTTEr CS) (co. sonTICIP-G. COC {cox Man CSTE CE CRO) (cos. es ascezT C820] UCL: Upper Control init = 016390283, * Problem 5 Kinder Land Child Care uses a cchart to monitr the number ‘of customer complaints per weck. Complaints have been recorded over the past 20 weeks. Develop a control chart with three-game contral its using the falling data Number of Number of Complaints Week Complaints T 0 TT 7 2 3 2 3 3 4 1B 1 4 1 4 1 5 o 15 1 6 o 6 ° 7 3 7 2 8 1 18 1 9 1 9 2 10 o 2» 2 Toul 30 * Solution ee eee Ee “Therefore, vcL= 2+ a= 15 +515 = ale= 15 - NS “The resulting control charts shown on the next page 7 Le. 7044159_06_p171-218 2/5/04 6133 PM Page 212 212 © CHAPTER 6 STATISTICAL QUALITY CONTROL, * Problem 6 “Thrse bagging machines at the Crunchy Potato Chip Company are being evaluated for their capability. The fllowing data are recorded Bagging Machine __ Standard Deviation y z B 3 @ bs specifications are set between 12.35 and 12.65 ounces, detr~ ‘mine which ofthe machines ae capable of producing within speciation * Solution ‘To determine the capability of each machine we need to divide the specification width (USL ~ LSL = 1245 ~ 12.35 = 3) by Ge foreach machine: Bagging st — 1st Maching a __USL~LSL_ 60 a zz BS 3 18 cw 3 3 ‘Looking atthe G vals, only machine Cis capable of bagsing the potato chips within specifications, because it isthe only ‘machine that his 4G vale ato abo 1 * Problem 7 (Compute the Gy measure of process capability forthe fallow ing machine and interpret the findings. What value would you have obtained withthe Gp measure? * Solution ‘To compute the Cy measure of process capability: us an =n smin( 13,067) = 087 38) This means tha the proce not capble-The G mesure of ross caput ges us the following mesure: x0 oa which lade ue to believe that the proce is capable. 1044159_06_p171-218 2/5/04 6133 PM Page 213 Discussion Questions 1. Explain the three categories of statistical quality contro ($QC). How are they elferent, what diferent information do ‘thoy provide and how can they be wed topes? 2. Describe these recent stations in which you wore diretly affected by poor producto service quali. 5. Discuss the key difleences heen common and asia be cits of variation, Give examples, 4 Describe a quality contol chart and how it can be usd ‘What are upper and lower contro mits? What does it mean if an observation fille tide the contol iis? 5. Explain the diferences bexween x-bar and Re- a oem | i 10 ole eo ‘Bveryone looked a the data that had been presented. Then Tim caclaimed: "Notice that the numberof errors increase in the last third of the month. The computer system had been in place forthe cotire month so that cant be the problem. Scot, it probably the new employees you have on staff that are not en= tering the data propery” Scott quckly retaliated: “The employ- ss are trained properly! Everyone knows the problem is the computer system!” ‘The argument between Tim and Scott become heated, and. Larraine decided to stp in. She sai, "Sctt, I think itis best you perform some statistical analysis ofthat data and send us your findings. You know that we want a high-quality stan- dard, We cat be Motorola wth Six Sigma quality, but tty for three sigma, Would you develop some contol charts ‘withthe data and lot ue know if you think the process in control” Case Questions i Sa cy tee toed es wa Liat rseatn cenit Wht Seed oe Prep id he ptt te ee ae BRS ee eh ae hfe sear(Fy Delta Plastics, Inc. (B) Tose De Costa, Diector of Manufacturing at Delta Plastic, at at his desk looking at the latest prodaction quality epor, show ing the number and type of product defects per wesk (ee the

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