Chapter One

Introduction to Statistical Process Control

Daniel Ab.

Bahir Dar Institute of Technology (BiT)

Faculty of Mechanical and Industrial Engineering

1
1. Introduction
In today’s increasingly competitive markets, quality has
assumed a much larger role than its traditional meaning.

The reasons for quality becoming a cardinal priority for most

organizations are:
• Competition: high quality products/services at low cost
• Changing customer: Demanding “quality system
/consistency/, not volume”
• Changing product mix: Demanding mix flexibility (need to
reduce the internal cost of poor quality)
• Product complexity: The reliability requirements for
suppliers of components
• Higher levels of customer satisfaction: Higher customers
expectations
 Traditional Concept on Quality

Improvement of
Quality

Control procedures
on yield only

Rejection of defective Replace with good units

products

Reduced Productivity, Increased costs

also poor quality

Reduction in Reduced profits and

sales market share
 Modern View on Quality

Improvement of Quality

Examination of raw materials and rejection of defects

Preventive measures during the production processes

The exclusion of waste, loss and poor quality

Productivity increase High quality products

Increased market Reduced cost of manufacturing

Improved competitiveness
 …..cont’d
Main concerns of manufacturers and customers in any
industry are:
Manufacturer Customer
•Quality •Quality
•Cost •Price
•Productivity •Availability
Concerns of manufacturer and customer are generally not the
same. Customer usually has no concern for company
productivity and cost.

Quality is the only common concern and it is the most

significant factor in determining the long range success or
failure of an organization is quality.
 …..cont’d

In general, good quality of product and service can

provide:
 Competitive edge
 Reduce cost due to returns, reworks, and scrap
 Productivity and profits
 Generates satisfied customers
Quality Definitions
The term ‘Quality’ has different meanings to different people:

 The degree of excellence of a thing or the standard of something

as measured against others things of the same kind (Dictionary)

 A predictable degree of uniformity and dependability at low cost

and suited to market. Quality should be aimed at the needs of the
consumer, present and future (Deming)

 As fitness for use in terms of design, conformance, availability,

safety and field use/ How well product or service does what it is
supposed to (Juran)

 As conformance to requirements/Specifications not “goodness”:

Does product/service meet targets and tolerances defined by
designers? (Crosby)
 As value (or what the customer says it is): Evaluation of
usefulness vs. price paid (Feigenbaum)

 The degree to which a set of inherent characteristics fulfills

requirements (ISO 9000:2000)

 Garvin (1984) divides the definition of quality in to five

categories
• Transcendent Definition – Superior in quality or achievement
(Excellence)
• Product-based Definition – Quantities of product attributes
• User-based Definition– Fitness for intended use
• Manufacturing-based Definition – Conformance to
specifications
• Value-based Definition – Quality vs. Price
 Meaning of Quality

Producer’s Perspective Consumer’s Perspective

Quality of Conformance Quality of Design

• Conformance to
Production
specifications • Quality characteristics Marketing
• Price
• Cost

Fitness for
Consumer Use
Evolution of Quality Era
 Manufacturing Quality vs. Service Quality

 Manufacturing quality focuses on tangible product

features:
 Conformance, performance, reliability, features

 Service organizations produce intangible products that

must be experienced
 Quality often defined by perceptional factors like courtesy,
friendliness, promptness, waiting time, consistency
Eight Dimensions of Product Quality (Garvin, 1987)
1. Performance (will the product do the intended job?)
2. Reliability (how often does the product fail?)
3. Durability (effective service life; how long does the product
last?)
4. Serviceability (how easy is it to repair the product?)
5. Aesthetics (what does the product look like?)
6. Features (what does the product do?)
7. Perceived Quality (what is the reputation of the company
or its product?)
8. Conformance to standards (Is the product made exactly as
the designer intended?)
It is the degree to which the product’s appearance and
function conform to pre-established standards
Service Quality (SERVQUAL) Dimensions

1. Time (how long must a customer wait?)

2. Timeliness (will a service be performed when promised?)
3. Completeness (are all items in the order included?)
4. Courtesy (do front-line employees greet each customer
cheerfully?)
5. Consistency (are services delivered in the same fashion for
every customer, and every time for the same customer?)
6. Accessibility and convenience (is the service easy to obtain?)
7. Accuracy (is the service performed right the first time and
every time?)
8. Responsiveness (can service personnel react quickly and
resolve unexpected problems?)
 Management Quality Problems
 Quality become a question only at the final assembly, rather
than at the early design stage.
 The employees in the organization lack understanding of
customer requirements.
 Quality issues fail to gain much attention until problems
developed.
 Management seemed willing to sacrifice quality when it
conflicts with cost and schedule.
 Operators lacked sufficient training in their work and in quality
issues.
 Suppliers contribute to the quality problem of the producer.
 High quality costs are common (cost of poor quality).
 Employee-employer and producer-supplier are always blaming
each other.
 Cost of Quality
The cost of carrying out the company’s quality functions
(meeting the quality needs of the customers) is known as costs of
quality.

It is the cost of ensuring that the job is done right + the cost of not
doing the job right.
Cost of Conformance + cost of Non-Conformance
(Prevention & Appraisal) (Internal & External defects)
Prevention cost: Cost of planning and executing a project so it is
error-free or within an acceptance error range.
Appraisal cost: Cost of evaluation processes and their outputs to
ensure quality.
Internal failure cost: cost of incurred to correct an identified
defect before the customer receives the product.
External failure cost: Cost that relates to all errors after delivery
of shipment of product.
 1.2 Total Quality Management and Statistical Process Control

What is Total Quality Management (TQM)?

Total: Made up of the whole or complete.

 All areas and functions
 All activities
 All employees: everyone
 All time: always
Quality: Products that totally satisfy our customer needs and
expectations in every respect on a continuous basis. Quality
then is to satisfy customer needs....it is in fact to delight
customers.
Management: A systematic approach of planning, controlling,
and directing activities involving everyone.
 …..cont’d
Generally, TQM defines as:
TQM is the art of managing the whole to achieve excellence. It is
also a way of thinking about goals, organizations, processes and
people to ensure that the right things are done right first time.

TQM is a management philosophy that seeks to integrate all

organizational functions (marketing, finance, design, engineering,
and production, customer service, etc.) to focus on continually
meeting customer needs and organizational objectives.

It is a management approach for an organization, centered on

quality, based on the participation of all its members and aiming at
long-term success through customer satisfaction, and benefits to
all members of the organization and to society. It is a management
strategy aimed at embedding awareness of quality in all
organizational processes.
 …..cont’d

The principle of the TQM shows us that the quality is possible by

incorporating the following:
• People inside the organization,
• Suppliers involvement
• Customer involvement
• Technology used,
• Communication in the organization
 …..cont’d
Elements of TQM
• Top Management Commitment
• Delight the Customer
• People Based Management
• Management by Fact
• Continuous Improvement (PDCA, Kaizen, 5S, etc)
• Appropriate Technology
• Statistical Process Control
• Problem Solving Tools/Techniques
• Benchmarking
• Quality Function Deployment
• Institute all Pervasive System (e.g. ISO 9001)
• Supplier Partnership and Control
• Reduce Cost of Quality
• Developing a Quality Culture (Change in mindset, Proactive)
…..cont’d