Quality Management

&
Total Quality Management
 Does Quality Matter?
Williams Johnston owner of the Ritz-Carlton Hotels has a wonderful
saying: "Quality is a race with no finish line"!
Natalie Nabal writes: "If 99.9% is good enough, then every year the
following things would occur (in the US):
2 million documents would be lost by the IRS:
12 babies would be given to the wrong parents;
291 pace-maker operations would be performed incorrectly;
20,000 drug prescriptions would be wrongly written;
114,500 mismatched pairs of shoes would be shipped. “
Now that may not mean much - unless it was your baby, your
prescription, your pacemaker, your taxes, or your shoes!
 What is Quality
 The total composite product and service characteristics of
marketing, engineering, manufacturing, and maintenance
through which the product and service in use will meet the
expectations of the customer - A. V. Feigenbaum
 Quality is conformance to requirements - P. Crosby
 What is quality? What would someone mean by the quality of a
shoe? Let us suppose that it is a man’s shoe that he is asking
about. Does he mean by good quality that it wears a long time?
Or that it takes a shine well? That is feels comfortable? That it is
waterproof? That the price is right in consideration of whatever
he considers quality? Put another way, what quality-
characteristics are important to the customer? – Edward Deming

3
 Voices who shape ideas…
 If a company follows the principle of “quality first,” its profits will
increase in the long-run. If a company pursues the goal of attaining a
short-term profits, it will lose competitiveness in the international
market, and will lose profit in the long run. - Ishikawa
 The secret of Japan’s success is an unrelenting, some might say
fanatical adherence to what amounts to a de facto national policy.
That policy is quality first. - Dana M. Cound
 For you to sleep well at night, the aesthetic, the quality, has to be
carried all the way through. - Steve Jobs
 “Quality is not act. It is a habit.” ~Aristotle
 “Quality is never an accident; it is always the result of high intention,
sincere effort, intelligent direction and skillful execution; it represents
the wise choice of many alternatives.” ~William A. Foster

3
 Meaning of Quality

Meaning of Quality

Producer’s Perspective Consumer’s Perspective

Quality of Conformance Quality of Design

Production • Conformance to • Quality characteristics Marketing

specifications • Price
• Cost

Fitness for
Consumer Use

3-5
 Dimensions of Product Quality (Garvin)1
1. Performance - primary/basic operating characteristics
2. Features - secondary characteristics that supplement it’s basic
functioning
3. Reliability - product’s probability of failure-free performance over a
period of time
4. Conformance – degree to which product’s physical and performance
characteristics meet designed specifications
5. Durability - life span before replacement
6. Serviceability - ease of getting repairs, speed & competence of repairs
7. Aesthetics - look, feel, sound, smell or taste – measure of personal
preferences
8. Perceived – quality based on image, brand name or advertising, rather
than product attribute
 Dimension of Service Quality1
1. TANGIBLES - Appearance of physical facilities, equipment,
personnel, and communication materials
2. RELIABILITY - Ability to perform the promised service
dependably and accurately
3. RESPONSIVENESS - Willingness to help customers and
provide prompt service
4. ASSURANCE - Knowledge and courtesy of employees and
their ability to convey trust and confidence
5. EMPATHY - Caring, individualized attention the firm
provides its customers
Seven Service Quality Gaps
Customer needs and CUSTOMER
expectations

1. Knowledge Gap
MANAGEMENT
Management definition of
these needs

2. Standards Gap

Translation into
design/delivery specs
4. Internal
3. Delivery Gap Communications Gap

Execution of 4. Advertising and sales

design/delivery specs promises

5. Perceptions Gap 6. Interpretation Gap

Customer perceptions of Customer interpretation
service execution of communications
7. Service Gap
Customer experience
relative to expectations
 Total Quality Management (TQM)
Management system for a customer-focused organisation
that involves all employees in continual improvement.
Uses strategy, data, and effective communications to
integrate the quality discipline into the culture and
activities of the organisation.
 Some Underlying Principles of TQM
1. Strategic & Systematic Approach – Top management should act as the main
driver for TQM and create an environment that ensures its success.
2. Training – Employees should receive regular training on the methods and
concepts of quality.
3. Customer Focus – Improvements in quality should improve customer satisfaction.
4. Fact-based Decision Making – Quality decisions should be made based on
measurements.
5. Process-centered: A fundamental part of TQM is a focus on process thinking. A
process is a series of steps that take inputs from suppliers (internal or external)
and transforms them into outputs that are delivered to customers (internal or
external).
6. Continuous Improvement – Companies should continuously work towards
improving manufacturing and quality procedures.
7. Company Culture – The culture of the company should aim at developing
employees ability to work together to improve quality.
8. Total Employee Involvement – Employees should be encouraged to be pro-active
in identifying and addressing quality related problems.
 Three Fundamental Principles
 Continuous Improvement – Kaizen Mindset
– performance level of the firm as something to be
"continuously challenged and incrementally upgraded."
 Employee Involvement – Empowerment
– employee involvement and team efforts are the key to
improvement…quality circles, process improvement teams,
self-managed improvement teams
 Customer Satisfaction – The aim of TQM
– involves both internal & external customers
– “starts” and “ends” with the customer in mind
 PDCA Cycle (Deming Wheel)

1. Plan what is needed.

4. Act to correct any problems
or to improve performance

1. Plan
4. Act

3. Check 2. Do

3. Check that it works 2. Do it.

19
 Joseph M Juran’s Quality Trilogy

Quality Holding the Gains Quality

Control Planning

Break through Pareto Analysis

Quality
Improvement
project-by-project
 Basic Tools used to track Quality
 Pareto analysis - which are the big problems?
 Cause and effect diagrams - what causes the
problems?
 Check sheets - how often does it occurs or it is
done?
 Process control charts which variations to
control and how?
 Cause-and-Effect Diagram -
Flight Departure Delays

Facilities, Frontstage
Front-Stage
Procedures
Procedures
Equipment Personnel
Personnel

Aircraft late to Gate agents Delayed check-in

Arrive late gate cannot process procedure
Oversized bags Mechanical fast enough Acceptance of late
Customers Failures
Customers Late/unavailable passengers
Late pushback airline crew
Delayed
Departures
Late food Late cabin
service cleaners
Other Causes Poor announcement of
Weather Late baggage departures
Air traffic
Late fuel Weight and balance sheet
late

Materials,
Materials, Backstage Information
Supplies
Supplies Personnel
 Quality Circle
Organisation
8-10 members
Same area
Supervisor/moderator
Training
Presentation
Group processes
Implementation
Data collection
Monitoring
Problem analysis

Problem
Solution Identification
Problem results List alternatives
Consensus
Problem Analysis Brainstorming
Cause and effect
Data collection
and analysis
3-16
 Quality Indices

 Labour index
– quality cost/labour hours
 Cost index
– quality cost/manufacturing cost
 Sales index
– quality cost/sales
 Production index
– quality cost/units produced
 Quality & Productivity
 Productivity = output/input

 Fewer defects  increased output

 Quality improvement  reduced inputs

 COST OF QUALITY
 Quality costs -- costs associated with non-achievement
of product/service quality -- the cost of poor
products/services.
 The cost of poor quality can add to other costs such as
design, production, maintenance, inspection, sales, etc.
Quality costs cross department boundaries by involving
all activities of the organization – marketing, purchasing,
design, manufacturing, service, etc.
 The price of nonconformance (Philip Crosby) or the cost
of poor quality (Joseph Juran), the term 'Cost of Quality',
refers to the costs associated with providing poor quality
product or service.
Cost of Quality
 Cost of Quality
Internal Failure costs: Costs Failure costs: costs incurred after
incurred prior to delivery delivery or shipment of the product
— and during or after furnishing of
 Rework a service — to the customer.
 Delays  Complaints
 Re-designing  Repairing goods and redoing
 Shortages services
 Failure analysis  Warranties
 Re-testing
 Customers’ bad will
 Downgrading
 Losses due to sales reductions
 Downtime
 Environmental costs
 Lack of flexibility and
adaptability
 Cost of Quality
Cost of Prevention: The costs of
all activities specifically designed to
prevent poor quality in products or
services
 Quality planning
 Supplier evaluation
 New product review
 Error proofing
 Capability evaluations
 Quality improvement team
meetings
 Quality improvement projects
 Quality education and training
Appraisal costs: costs associated
with measuring, evaluating or
auditing products or services to
assure conformance to quality
standards and performance
requirements
 Checking and testing purchased
goods and services
 In-process and final inspection/test
 Field testing
 Product, process or service audits
 Calibration of measuring and test
equipment
The Three Basic Costs of Quality
 ISO System
A group of processes, policies and procedures -- needed to plan
& execute the core business operations of a company – to
improve the company’s capacity to meet the needs of its
customers
Series of standards agreed upon by the International
Organization for Standardization (ISO)
 Adopted in 1987
 More than 100 countries
 Adherence to the relevant standards has become one of the
prerequisites for global competition
 ISO directs you to "document what you do and then do as
you documented."
24
 ISO Standards
Thousands of ISO Standards focusing on different
categories …
 Medical Services
 Food Safety
 Risk management …
Three most common …
 ISO 9001-Quality Management
 ISO 14001-Environmental Management
 ISO 27001-Information Security Management
Statistical Quality Control
&
Process Capability
 Statistical Process Control (SPC)
A methodology for monitoring a process to
identify special causes of variation and signal
the need to take corrective action when
appropriate
 application of statistical techniques to
determine whether a process is delivering
what the customer wants.
 SPC relies on control charts
 Control Chart Applications

 Establish state of statistical control

 Monitor a process and signal when it goes out
of control
 Determine process capability
 Capability versus Control

Control
Capability In Control Out of Control

Capable IDEAL

Not Capable
 Quality Control
 Quality control (QC) is a process through which
a business seeks to ensure that product quality
is maintained or improved with either reduced
or zero errors.
 Quality control involves testing of units and
determining if they are within the
specifications for the final product/service.
 The quality control used in a business is highly
dependent on the product/service
 Concepts …
 Acceptance sampling is the application of statistical techniques to
determine whether a quantity of material should be accepted or
rejected based on the inspection or test of a sample.
 Variables: Product/Service characteristics that can be measured -- that
can take any real value, maybe integer or fraction – continuous random
variables – eg. weight, length, volume, time...
 Attributes: Product/Service characteristics that can be counted --
defect-related characteristics -- classify products/services as either good
or bad -- categorical or discrete random variables - eg. number of
grammatical errors in an essay, number of incorrectly assigned account
numbers
 Sampling plan: A plan that specifies a sample size, the time between
successive samples, and decision rules that determine when action
should be taken.
 Process Distributions
A process distribution can be characterized by its location,
spread, and shape.
Location is measured by the mean of the distribution
Spread is measured by the range or standard
deviation.
Shape can be characterized as either symmetric or
skewed.
 A symmetric distribution has the same number of
observations above and below the mean.
 A skewed distribution has a greater number of
observations either above or below the mean.
 Statistical Process Control (SPC)
Variability is inherent in every process
 Natural or common causes
 Affect virtually all production processes
 Expected amount of variation
 Output measures follow a probability distribution
 For any distribution there is a measure of central tendency and dispersion
 If the distribution of outputs falls within acceptable limits, the process is said to
be “in control”
 Special or assignable causes
 Variations that can be traced to a specific reason
 The objective is to discover when assignable causes are present
 Eliminate the bad causes & Incorporate the good causes
 Provides a statistical signal when assignable causes are present
 Detect and eliminate assignable causes of variation
 Process Control

(a) In statistical control

and capable of producing
Sample Data within control limits

Lower control limit Upper control limit

(b) In statistical control

but not capable of
producing within control
limits

(c) Out of control

 Central Limit Theorem

Regardless of the distribution of the population, the

distribution of sample means drawn from the population
will tend to follow a normal curve

1. The mean of the sampling distribution

(x) will be the same as the population x=m
mean
2.The standard deviation of the sampling
distribution (sx) will equal the population
standard deviation (s) divided by the s
sx =
square root of the sample size, n n
Population and Sampling Distributions

Three population Distribution of

distributions sample means
Mean of sample means = x
Beta
Standard
deviation of s
the sample = sx =
Normal n
means

Uniform

| | | | | | |

-3sx -2sx -sx x +sx +2sx +3sx

95.45% fall within ± 2sx
99.73% of all x
fall within ± 3sx
Sampling Distribution

Sampling
distribution of
means

Process
distribution of
means

x=m
(mean)
Control Chart Examples
 Type I and II Errors
Control charts are not perfect tools for detecting shifts
in the process distribution because they are based on
sampling distributions. Two types of error are possible
with the use of control charts.
Type I error occurs when one concludes that the
process is out of control based on a sample result that
falls outside the control limits, when in fact it was due
to pure randomness.
Type II error occurs when one concludes that the
process is in control and only randomness is present,
when actually the process is out of statistical control.
 Commonly Used Control Charts

 Variables data
– x-bar and R-charts
– x-bar and s-charts
– Charts for individuals (x-charts)
 Attribute data
– For “defectives” (p-chart, np-chart)
– For “defects” (c-chart, u-chart)
 Control Charts for Variables
 Control Charts for variables are used to monitor the mean
and variability of the process distribution.
 R-chart (Range Chart) is used to monitor process variability.
 x-chart is used to see whether the process is generating
output, on average, consistent with a target value set by
management for the process or whether its current
performance, with respect to the average of the
performance measure, is consistent with past performance.
– If s is known, we use: If s is known, we use
Upper control limit (UCL) = x + zsx Upper control limit (UCL) = x + A2R

Lower control limit (LCL) = x - zsx Lower control limit (LCL) = x - A2R
 Control Charts for Attributes
p-chart: A chart used for controlling the
proportion of defective services or products
generated by the process.
sp = p(1 – p)/n
Where
n = sample size
p = central line on the chart, which can be either the historical average
population proportion defective or a target value.

–
Control limits are: UCLp = p+zs and LCL = –
p−zs
p p p

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

 c-Charts
 c-chart: A chart used for controlling the number of defects when
more than one defect can be present in a service or product.
 The underlying sampling distribution for a c-chart is the Poisson
distribution.
 The mean of the distribution is 𝑐
 The standard deviation is 𝑐
 A useful tactic is to use the normal approximation to the Poisson
so that the central line of the chart is c and the control limits are
UCLc = 𝑐 + 𝑧 𝑐
LCLc = 𝑐 − 𝑧 𝑐
 X-Bar Chart & R-Chart
when s is not known
The control limits for the x-chart are:
x + A2R and LCLx = =x - A2R
UCLx = =
Where
=
X = central line of the chart, which can be either the average of past sample
means or a target value set for the process.
A2 = constant to provide three-sigma limits for the sample mean.

The control limits for the R-chart are UCLR = D4R and LCLR = D3R
where
R = average of several past R values and the central line of the chart.
D3,D4 = constants that provide 3 standard deviations (three-sigma) limits for a
given sample size.
Calculating 3-Sigma Limits
 Example
West Allis is concerned about the company’s production of a special metal
screw used by their largest customers. The diameter of the screw is critical.
Data from five samples is shown in the table below. Examine and state if
the process is in statistical control?
 Control Chart Factors
Factor for UCL Factor for Factor
R = 0.0021
D4 = 2.282 Size of and LCL for LCL for UCL for
Sample x-Charts R-Charts R-Charts
D3 = 0
(n) (A2) (D3) (D4)
x = 0.5027
A2 = 0.729 2 1.880 0 3.267
3 1.023 0 2.575
4 0.729 0 2.282
5 0.577 0 2.115
6 0.483 0 2.004
7 0.419 0.076 1.924
8 0.373 0.136 1.864
9 0.337 0.184 1.816
10 0.308 0.223 1.777

UCLR =
Range Chart:
LCLR =

UCLx =
LCLx =
 Control Chart Factors
Factor for UCL Factor for Factor
R = 0.0021
D4 = 2.282 Size of and LCL for LCL for UCL for
Sample x-Charts R-Charts R-Charts
D3 = 0
(n) (A2) (D3) (D4)
x = 0.5027
A2 = 0.729 2 1.880 0 3.267
3 1.023 0 2.575
4 0.729 0 2.282
5 0.577 0 2.115
6 0.483 0 2.004
7 0.419 0.076 1.924
8 0.373 0.136 1.864
9 0.337 0.184 1.816
10 0.308 0.223 1.777

UCLR = D4R = 2.282 (0.0021) = 0.00479 in.

LCLR = D3R 0 (0.0021) = 0 in.

UCLx = =
x + A2R = 0.5027 + 0.729 (0.0021) = 0.5042 in.
LCLx = =
x - A2R = 0.5027 – 0.729 (0.0021) = 0.5012 in.
West Allis Industries Range Chart
 x-Chart
Sample the process Find the assignable cause
Eliminate the problem Repeat the cycle
 Sunny Dale Bank
Sunny Dale Bank management determined the mean time to process a
customer is 5 minutes, with a standard deviation of 1.5 minutes.
Management wants to monitor mean time to process a customer by
periodically using a sample size of six customers.
Design an x-chart that has a Type I error of 5 percent.

UCLx =

LCLx =

After several weeks of sampling, two successive samples came in at 3.70 and
3.68 minutes, respectively. Is the customer service process in statistical control?
 Sunny Dale Bank
Sunny Dale Bank management determined the mean time to process a customer is 5 minutes,
with a standard deviation of 1.5 minutes. Management wants to monitor mean time to process
a customer by periodically using a sample size of six customers.

Design an x-chart that has a type I error of 5 percent.

= Control Limits
UCLx = x + zsx
UCLx = 5.0 + 1.96(1.5)/ 6 = 6.20 min
LCL = =
xx – zs x

sx = s/ n LCLx = 5.0 – 1.96(1.5)/ 6 = 3.80 min

After several weeks of sampling, two successive samples came in at 3.70 and 3.68
minutes, respectively. Is the customer service process in statistical control?
 p-Chart Example
The operations manager of the booking services department of Hometown Bank
is concerned about the number of wrong customer account numbers recorded by
Hometown personnel.

Each week a random sample of 2,500 deposits is taken, and the number of
incorrect account numbers is recorded. The results for the past 12 weeks are
shown in the following table.

Is the booking process out of statistical control? Use three-sigma control limits.
Using a p-Chart to monitor a process

Sample Wrong Proportion

Number Account # Defective
1 15 0.0060
2 12 0.0048
3 19 0.0076
4 2 0.0008
5 19 0.0076
6 4 0.0016
7 24 0.0096
8 7 0.0028
9 10 0.0040
10 17 0.0068
11 15 0.0060
12 3 0.0012
Total 147
 Using a p-Chart to monitor a process

n = 2500 Sample Wrong Proportion

147 Number Account # Defective
p= = 0.0049
12(2500) 1 15 0.0060
2 12 0.0048
sp = p(1 – p)/n 3 19 0.0076
4 2 0.0008
sp = 0.0049(1 – 0.0049)/2500 5 19 0.0076
6 4 0.0016
7 24 0.0096
sp = 0.0014
8 7 0.0028
UCLp = 0.0049 + 3(0.0014) 9 10 0.0040
= 0.0091 10 17 0.0068
11 15 0.0060
LCLp = 0.0049 – 3(0.0014) 12 3 0.0012
= 0.0007
Total 147
 c-Chart Example
In the Woodland Paper Company’s final step in their paper production process, the
paper passes through a machine that measures various product quality
characteristics. When the paper production process is in control, it averages 20
defects per roll.

a) Set up a control chart for the number of defects per roll. Use two-sigma
control limits.
b) Five rolls had the following number of defects: 16, 21, 17, 22, and 24,
respectively. The sixth roll, using pulp from a different supplier, had 5
defects. Is the paper production process in control?

c= UCLc =
z=
LCLc
 Example
In the Woodland Paper Company’s final step in their paper production process, the
paper passes through a machine that measures various product quality
characteristics. When the paper production process is in control, it averages 20
defects per roll.

a) Set up a control chart for the number of defects per roll. Use two-sigma
control limits.
b) Five rolls had the following number of defects: 16, 21, 17, 22, and 24,
respectively. The sixth roll, using pulp from a different supplier, had 5
defects. Is the paper production process in control?

c = 20 UCLc = c+z c = 20 + 2 20 = 28.94

z=2
LCLc = c−z c = 20 - 2 20 = 11.06
 Example

Solver - c-Charts
Number of Defects

Sample Number
 Managerial Issues &
Control Charts
Three major management decisions:
 Select points in the processes that need SPC
 Determine the appropriate charting technique
 Set clear policies and procedures
Process Capability
 Process Capability
 The natural variation of a process should be small
enough to produce products/services that meet the
standards required
 A process in statistical control does not necessarily
meet the design specifications
 Process capability is a measure of the relationship
between the natural variation of the process and the
design specifications
 Process Capability
 A measure of how well the process can produce output that meets
desired standards or specifications
 Compares process specifications (set by the customer or
management) to control limits (the natural or common variability
in the process)
 Process limits (The "voice of the process" or The "voice of the
data") - based on natural (common cause) variation.
 Tolerance limits (The "voice of the customer") - customer
requirements
 A measure of how "capable" the process is to meet the customer's
requirement, compares process limits to tolerance limits.
 Process Capability
 Process capability is the ability of the process to meet the design
specifications for a service or product.
 Nominal value is a target for design specifications.
 Tolerance is an allowance above or below the nominal value.
Nominal
value
Process distribution
Lower Upper
specification specification

20 25 30 Minutes

Process is capable
 Process Capability

Nominal
value
Process distribution
Lower Upper
specification specification

20 25 30 Minutes

Process is not capable

 Process Capability Ratio, Cp
Process capability ratio, Cp, is the tolerance width divided by 6
standard deviations (process variability).
USL - LSL Voice of Customer
Cp = =
6s Voice of Process

Process Capability Index, Cpk

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

=x – Lower specification Upper specification – =

x
Cpk = Minimum of ,
3s 3s

We take the minimum of the two ratios because it gives the worst-case situation.
(Measuring how many SD is the LS or US is from the mean (centre)).
 Process Capability
Cp and Cpk
USL  LSL
Cp  and is estimated by
6s
ˆ USL  LSL
Cp 
6s
 x  LSL USL  x 
C pk  min  or  and is estimated by
 3s 3s 
ˆ  x  LSL USL  x 
C pk  min  or 
 3s 3 s 
 Process Capability Ratio

Upper Specification - Lower Specification

Cp =
6s

 A capable process must have a Cp of at least 1.0

 Does not look at how well the process is centred in
the specification range
 Often a target value of Cp = 1.33 is used to allow for
off-centre processes
 Six Sigma quality requires a Cp = 2.0
 Using Continuous Improvement to
Determine Process Capability
 Step 1: Collect data on the process output; calculate mean and
standard deviation of the distribution.
 Step 2: Use data from the process distribution to compute process
control charts.
 Step 3: Take a series of random samples from the process and plot
results on the control charts.
 Step 4: Calculate the process capability index, Cpk, and the
process capability ratio, Cp, if necessary. If results are acceptable,
document any changes made to the process and continue to
monitor output. If the results are unacceptable, further explore
assignable causes.
 Example
The intensive care unit lab process at UZY Hospital has an average
turnaround time of 26.2 minutes and a standard deviation of 1.35
minutes.
The nominal value for this service is 25 minutes with an upper
specification limit of 30 minutes and a lower specification limit of
20 minutes.
The administrator of the lab wants to have four-sigma performance
for her lab.
Required
a) Determine if the lab process is capable of this level of
performance
b) Would your answer in (a) be different if the process were
modified to have an average service time = 26.1 minutes and s
= 1.2 minutes
 Assessing Process Capability
Before Process Modification
Upper specification = 30.0 minutes Lower specification = 20.0
minutes
Average service = 26.2 minutes
s = 1.35 minutes

US - LS 30 - 20
Cp = = 6(1.35)
6s

x= – LS US – =x 26.2 – 20 30 – 26.2
Cpk = Minimum , = Minimum ,
3s 3s 3(1.35) 3(1.35)
 Assessing Process Capability

After Process Modification

Upper specification = 30.0 minutes Lower specification = 20.0
minutes
Average service = 26.1 minutes
s = 1.2 minutes

US - LS 30 - 20
Cp = = 6(1.2)
6s

x= – LS US – =x 26.1 – 20 30 – 26.1
Cpk = Minimum , = Minimum ,
3s 3s 3(1.2) 3(1.2)
 When talking about PC, there are 2 important factors ---
process should operate within the SL + we should check
the proximity of the process mean with the mean of the
specification given
 Cp = might not tell the full story, since it does not speak
to centeredness of the process
 Cpk = takes into account the position of the process
mean w.r.t to the specification limits
Student Reading
 Six Sigma
 Philosophy
 Eliminate defects through prevention and process
improvement
 Methodology
 Team-based approach to process improvement using the
DMAIC cycle
 Set of tools
 Quantitative and qualitative statistically based tools
 Goal
 3.4 defects per million opportunities (DPMO)
 Six Sigma
 Six Sigma is a comprehensive and flexible system for
achieving, sustaining, and maximizing business success
by minimizing defects and variability in processes.
 It relies heavily on the principles and tools of TQM.
 It is driven by a close understanding of customer
needs; the disciplined use of facts, data, and statistical
analysis; and diligent attention to managing, improving,
and reinventing business processes.
 Successful Six Sigma
 Top-management support
 Extensive training
 DMAIC approach
 Use of quantitative measures
 Team-based projects
 Impact on organization’s financials
 DMAIC & TQM Processes
 Define
Control Define
 Measure
 Analyze Act Plan
 Improve
 Control
Improve Measure

Check Do
Analyze
 Six Sigma Improvement Model

1. Define: Determine the current process characteristics

critical to customer satisfaction and identify any gaps.
2. Measure: Quantify the work the process does that affects
the gap.
3. Analyze: Use data on measures to perform process
analysis.
4. Improve: Modify or redesign existing methods to meet the
new performance objectives.
5. Control: Monitor the process to make sure high
performance levels are maintained.
 Six Sigma Implementation
 Top Down Commitment from corporate leaders.
 Measurement Systems to Track Progress
 Tough Goal Setting through benchmarking best-in-class
companies.
 Education: Employees must be trained in the “whys” and
“how-tos” of quality.
 Communication: Successes are as important to understanding
as failures.
 Customer Priorities: Never lose sight of the customer’s
priorities.
 Six Sigma Culture/Training
 Green Belt: An employee who achieved the first level
of training in a Six Sigma program and spends part of
his or her time teaching and helping teams with their
projects.
 Black Belt: An employee who reached the highest level
of training in a Six Sigma program and spends all of his
or her time teaching and leading teams involved in Six
Sigma projects.
 Master Black Belt: Full-time teachers and mentors to
several black belts.
Student Practice Example
 Try the following:
A professor records the number of students who complain each
week throughout the semester. If the class size is forty students,
what are 3-sigma control limits for this class? Construct a control
chart and interpret the data.
Week number Complaints
1 5
2 2
3 7
4 1
5 3
6 2
7 8
8 1
9 3
10 5
11 4
12 6
13 3
14 1
15 4
 Try the following:
MKS Inc., produces meter sticks that have a target length of 100 centimeters with
upper and lower specification limits of 100.05 and 99.95 centimeters respectively.
Their existing process produces meter sticks with an average length of 99.97
centimeters and a standard deviation of 0.015 centimeters. They are considering the
purchase of a new machine that can hold a process output average exactly to target
with a standard deviation of 0.02. Would you recommend the purchase of the new
machine? Explain.