Statistical Process Control

Attribute : Binary property, Painted or not painted.

Variable : Measurable characteristic – Size, weight
Variables control charts plot continuous measurement process data, such as length or pressure,
in a time-ordered sequence.
In contrast,
attribute control charts plot count data, such as the number of defects or defective units.

Vibration in machine increases, Sharpness of cutting tool, Viscosity of lubricant, Voltage, Service
received in a restaurant, etc..
Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 Tomorrow

Attributes and Variables

Assume a hotel and the time required to check-in.

We want to know how against a specification of LESS THAN 15 minutes, how is the
performance of front-office staff?

Sample data: Time in Minutes : 12,14,11,9,10,16,20,9,15, 8 GO, NO_GO Gauge

Attribute test
1. Attribute data : Time for check-in :
Pass the Quality Test – (Less than 15 minutes): 7
Fail in the Quality test : ( Not within 15 minutes) : 3

2. Variable data: Time in Minutes : 12,14,11,9,10,16,20,9,15, 8

We can calculate mean, range, std.dev.

Vibration in machine increases, Sharpness of cutting tool, Viscosity of lubricant, Voltage, Service
received in a restaurant, etc..
Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 Quality Assurance using SPC

Designed Standard to meet Customers Status of process – due to

needs performance of
machines/material/employees
• Centre of specification limits
(desired mean, Target) • Centre of the process (desired
• Upper Specification Limit (USL) Process Average)
• Lower Specification Limit (LSL) • Upper Control Limit (UCL)
• (USL – LSL): Desired Tolerance for • Lower Control Limit (LCL)
the specs. • (UCL – LCL): Spread of the process
Ex: Length = 5 cm +/- 0.5 cm This represents the voice of the
This represents the voice of the process
customer Ex: Weight : 10 kgs +/- 0.2 kgs

USL/LSL are desired. UCL/LCL are

Mahadevan actual
(2015), as produced
“Operations from
Management: Theory the machine
& Practice”, rd
3 Edition © Pearson Education
 Control Chart

Upper Control Limit (UCL = 3.0)

3
Plot of
sample data
L
e
Process Average
n 0
g
t
h

Lower Control Limit (LCL = - 3.0)

-3
Samples 1.2.3.4…….n

Actual observation from samples- Length varies between -2.8 to +2.8

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rd
 Measurement Methods
• Attribute Based
– simple clustering of the characteristic into a few categories (such as
good or bad, accept or reject, yes/no)
– Two frequently used attribute measures are:
• Proportion of defects (denoted as p)
• Number of defects (denoted as c)
– measurements are easy to make, quick & less expensive, but reveal
very little information about the process
• Variable Based
– Detailed observation of the characteristic (such as length, diameter,
weight, pressure)
– measurement will be expensive and more time consuming but will
provide a wealth of information about the process

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 p chart

Organization conduct quality check to see whether products meet quality

specifications (ACCPETED) or do not meet quality specifications (REJECTED) .
EX: Out of 100 pieces checked, 7 are rejected for some defects.
So, proportion of defects is calculated = 7/100, p= 7%.

Computations for p chart

Process average or center line: p 

 p
m

p (1  p )
Upper Control Limit : UCL p  p  3 n

p (1  p )
Lower Control Limit: LCL p  p  3
n

Also called PERCENT DEFETCT CHART

Mahadevan (2015), “Operations Management: Theory & Practice”, 3
rd Edition © Pearson Education
 p chart

EX: Out of 100 pieces checked, 7 are rejected for some defects.
So, proportion of defects is calculated = 7/100, p= 7% in one sample.
We take m number of samples for analysis. Such m lots will be taken.

Computations for p chart

Process average or center line: p

p Steps:
m 1. Calculate p mean
2. Calculate UCL and LCL
p (1  p ) 3. 3. Draw the p-chart showing UCL,
Upper Control Limit : UCL p  p  3 n
LCL and the points given.
4. Write implications: Process needs
improvement or process is stable
p (1  p )
Lower Control Limit: LCL p  p  3
n

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 p chart – Example 19.2
Sample No Number of Defects
1 10
2 9
3 8
A manufacturer of Electronic ……. A lot of
100 units is tested periodically and 4 11
Number of defects is tabulated below 5 7
from 12 lots.
Draw p chart for the analysis of 6 12
defects. 7 7
8 10
9 13
n= sample size (100) 10 12
m= Number of sample lots 11 13
P= number of defects/sample
size(100) 12 14

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 p chart – Example 19.2
Sample No Number of Defects P (proportion)
1 10 0.10
2 9 0.09
3 8 0.08
4 11 0.11
5 7 0.07
6 12 0.12
7 7 0.07
8 10 0.1
9 13 0.13
10 12 0.12
11 13 0.13

n= 100 12 14 0.14
m=12 TOTAL 1.26

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 p chart – Example 19.2
Sample No Number of Defects P (proportion)
1 10 0.10
2 9 0.09
3 8 0.08
4 11 0.11
5 7 0.07
p (mean)= Total (p)/12 = 0.105 6 12 0.12
7 7 0.07
UCL = 0.105+3*0.031 = 0.198
8 10 0.1
LCL = 0.105-3*0.031= 0.012 9 13 0.13
10 12 0.12
11 13 0.13
12 14 0.14

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 P Chart
DRAW THE p- CHART using UCL, LCL and the points given

p Chart
p Centre Line UCL LCL

0.21
UCL = 0.198
0.18
Proportion of defects

0.15

0.12

0.09

0.06

0.03
LCL = 0.012
0.00
1 2 3 4 5 6 7 8 9 10 11 12
Sample No.

UCL = 0.105+3*0.031 = 0.198, LCL = 0.105-3*0.031= 0.012

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rd
 C Chart

Organizations when checking a product quality can also count the number of defects
and use this information for process control. Ex: Out of 10 samples checked, 8
number of defects are identified. c=8

Computations for c chart

Process average or center line: c 

 c
m

Upper Control Limit : UCLc  c  3 c

Lower Control Limit: LCLc  c  3 c

Number of non-conformities Mahadevan

in a sample. Generally Sample size remains constant.
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rd
 C Chart - Problem
Example 19.3 :
Television sets are inspected and defects are found as per the table below, in
10 Sample sets: Sample No Number of Defects
1 11
2 9
3 12
4 9
5 12
6 22
7 7
8 10
9 13
10 6

C chart can also be used to analyze the number of events. Ex: Injuries in a steel plant in a week.
Mahadevan (2015), “Operations Management: Theory & Practice”, 3 Edition © Pearson Education
rd
 C Chart - Problem
Sample No N0umber of Defects (c )
1 11
2 9
Calculations for c bar, LCL and UCL
3 12
4 9 STEPS:
5 12
1. Calculate mean c
6 22 2. Calculate UCL and LCL
7 7 3. Draw the c-chart.
4. Implications: Comment whether
8 10
process needs correction.
9 13
10 6
Total 111

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
C Chart - Problem

Sample No Number of Defects

1 11
2 9
3 12
4 9
5 12
6 22
7 7
8 10
9 13
10 6

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 C Chart - Problem
Sample No N0umber of Defects (c )
1 11
2 9
3 12
4 9 Mean c = Total c/Number of samples
5 12
= 111/10 = 11.10

6 22 UCL = 21.095
7 7
LCL = 1.105
8 10
9 13
10 6
Total 111

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 C Chart
Draw the chart using UCL, LCL and the given points

c Chart
c Centre Line UCL LCL
24

21 UCL

18
Number of defects

15

12

3
LCL
0
1 2 3 4 5 6 7 8 9 10
Sample No.

. UCLMahadevan
= 21.095, LCL = 1.105, Outlier
(2015), “Operations Management: Theory & Practice”, 3
rd Edition © Pearson Education
 C Chart
Revised chart after dropping
OUTLIER
c Chart
c Centre Line UCL LCL
24

21

18
Number of defects

15

12

0
1 2 3 4 5 7 8 9 10
Sample No.

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
c chart – Practice Example 01

Draw the c chart

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
c chart – Practice Example 01

UCL = 6.64
LCL = -2.25

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 p chart – Practice Example 02
p: Number of defects for 12 samples.
Sample No. Number of Defects
1 10
A manufacturer of an electronic control
2 9
system (ECS) for musical appliances
3 10
uses a non destructive testing
mechanism to access the quality of 4 14
ECS. 5 8
A lot of 100 ECSes is drawn periodically 6 7
for testing. After testing, the ECSes will 7 11
be classified as either defective or good 8 8
depending on the outcome of the test. 9 13
Table P below gives the number of
10 14
defects for 12 such samples.
11 12
Establish a p chart for the process.
12 8

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 Quality Management Tools
Quality management tools can be classified into FIVE groups:

1. For highlighting Quality problems: To identify when the quality is going out of control –
Process Control Charts

2. For identifying specific improvement opportunities: Once we know the process is not
behaving as planned, we have to pin point the cause for deviation of the process.
Tools- Histogram, Pareto charts

3. For analyzing problems and their root causes (RCA): After knowing the cause, we
have to analyze the problem/cause and go to the root od the problem. Tool- Cause &
Effect diagram, Fishbone diagram or Ishikawa diagram.

Planning Tools:

1. For Operational planning: Methods to plan activities to build quality. And to check it.

1. For Strategic Quality planning: provides overall direction for quality management.
Tools- Quality function Deployment (QFD) and Quality Costing.

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 WEL COME TO 2021

Wish you all a happy new year

and
wish that all your dreams come
true in 2021

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 Statistical Process Control
• Collective set of tools & techniques used to develop a
quality assurance system when business processes exhibit
variations is known as Statistical Process Control (SPC)
• Key issues addressed in SPC based quality assurance system:
– How does one ensure that the random events are indeed
rare events?
– How do we know whether the observed changes are due
to random variations or assignable causes?

Attribute : Binary property, Painted or not painted, yes/no.

Variable : Measurable characteristic – Size, weight
Variables control charts plot continuous measurement process data, such as length or pressure,
in a time-ordered sequence.
In contrast,
attribute control charts plot count data, such as the number of defects or defective units.
Mahadevan (2015), “Operations Management: Theory & Practice”, 3 Edition © Pearson Education
rd
 X bar and R Chart
Setting control limits
Used for quality control based on observed sample values for a variable.

Variable values = X
Range of Values of X = R

We compute Mean X( X-bar) Mean of Mean X ( X- Double bar), and R-bar

and calculate UCL and LCL for both X and R and plot the observed average
readings of X and R.

Interpretation:

If the observed sample values of X bar and R bar lie within the control limits,
we conclude that the process is under statistical control.

If not, process needs to be adjusted/fine tuned.

We calculate X by finding average of Averages of X

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 X bar and R Chart
Setting control limits
Computations for the X chart

Process average or center line: X 

 X
m

Upper Control Limit : UCL X  X  A2 R n= number of sample

Lower Control Limit: UCL X  X  A2 R m= Number of sample lots

Computations for the R chart

R
R
Process average or center line: m

Upper Control Limit : UCL R  D4 R

Lower Control Limit: UCL R  D3 R

* The values A2, D3 and D4 can be read directly from tables (see table 6.3)

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 Coefficients for computing LCL and
UCL in X-bar and R charts*
Sample size (n) A2 D3 D4
2 1.880 0 3.268
3 1.023 0 2.574
4 0.729 0 2.282
5 0.577 0 2.114
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

Source: Juran, J.M. and F.M. Gryna, (1995), “Quality Planning and Analysis”, Tata McGraw-Hill, 3rd Edition, New Delhi, pp 385.
Use sample size (n) to get the constants – A2, D3 and D4
Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 Example 19.1

n= 5, m= 15
Calculate UCL and LCL by
following steps:
1. Find x-average for every
sample lot
2. Find X-double bar (Avg of
Avgs of X)
3. Find Range for every sample
lot
4. Find R Bar (Range mean)

Source: Juran, J.M. and F.M. Gryna, (1995), “Quality Planning and Analysis”, Tata McGraw-Hill, 3rd Edition, New Delhi, pp 385.

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 Example 19.1

n= 5, m= 15
Calculate UCL and LCL by
following steps:
1. Find x-average for every
sample lot
2. Find X-double bar (Avg of
Avgs of X) = 12.417
3. Find Range for every sample
lot
4. Find R Bar (Range mean) =
0.119

UCLx= 12.486 cm
LCLx= 12.348 cm

UCLr= 0.252 cm
LCL= 0 cm

Source: Juran, J.M. and F.M. Gryna, (1995), “Quality Planning and Analysis”, Tata McGraw-Hill, 3rd Edition, New Delhi, pp 385.
Calculate UCL and LCL for X-bar and R-bar. Plot on the graph.
Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 X bar and R Chart
Setting control limits
Computations for the X chart

Process average or center line: X 

 X
m

Upper Control Limit : UCL X  X  A2 R n= number of sample

Lower Control Limit: UCL X  X  A2 R m= Number of sample lots

Computations for the R chart

R
R
Process average or center line: m

Upper Control Limit : UCL R  D4 R

Lower Control Limit: UCL R  D3 R

* The values A2, D3 and D4 can be read directly from tables (see table 6.3)

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 X bar Chart
An example
X-bar Chart
Sample Means Centre Line UCL LCL
12.50 12.486
12.49
12.48
12.47
12.46
Mean Diameter (cms)

12.45
12.44
12.43
12.42
12.417
12.41
12.40
12.39
12.38
12.37
12.36 12.348
12.35
12.34
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Sample Number

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 R Chart
An example
R Chart
Sample Range Centre Line UCL LCL
0.28
0.26 0.252
0.24
0.22
0.20
Mean Range (cms)

0.18
0.16
0.14 0.119
0.12
0.10
0.08
0.06
0.04
0.02 0
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Sample Number

Interpretation: Process under statistical control

Mahadevan (2015), “Operations Management: Theory & Practice”, 3
rd Edition © Pearson Education
Cost of Quality

Quality Function Deployment (QFD)

Elements of Quality Assurance System

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
Six Sigma Approach to Quality

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 Six Sigma Approach to Quality
• Main aim of business is to meet customer expectations.
• Companies have to reduce variations in the specification of products or
services they deliver to customer
• Ex: Products, Services
• Quality becomes important factor to remain as a preferred company when
competition heats up
• Reduction in variation is the main objective of 6-Sigma
• Aims to eliminate defects and treats defect as an “Extraordinarily a rare
event”.
• Improve quality to NEAR-ZERO defects.
• A new measure is devised to monitor this - 6- Sigma means 3.4
defects/million opportunities (3.4 DPMO)

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 Six Sigma Approach to Quality
The course on Six Sigma will focus on detailed strategic and operational issues
of process improvement and variation reduction called Six Sigma, a measure of
quality that strives for near perfection. It is a disciplined, data-driven approach
for eliminating defects (driving towards six standard deviations between the
mean and the nearest specification limit) in any process-from manufacturing
to transactional and from product to service.

A Six Sigma defect is anything outside of customer specifications. To be tagged

Six Sigma, a process must not produce more than 3.4 defects per million
opportunities.

Ref: NPTEL Video

Defect : is an unacceptable state of the product/service

Mahadevan (2015), “Operations arising out
Management: of &aPractice”,
Theory process that©produced
rd
3 Edition it.
Pearson Education
Six Sigma Approach to Quality

6 Sigma Quality level“Operations

Mahadevan (2015), means Management:
= 3.4 DPMO
Theory & Practice”, 3
rd Edition © Pearson Education
 Six Sigma Approach to Quality

Close to the target Highly Repetitive

Six-Sigma aims to reduce the variation. It moves the process towards precision. By making
adjustments in the process, we can move the mean of the observations close to the target.
Therefore, organizations aim to achieve PRECISE process.
Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 Six Sigma Approach to Quality

• Six sigma is a new approach to process control first practiced by companies

such as General Electric and Motorola to achieve near zero defects in
processes
• Elements of six-sigma
– Understanding customer needs well
– Appropriate and disciplined use of data and statistical tools
– Statistical analysis and a closer attention to managing and improving
business processes using a set of tools

Motorola - 1980’s, GE- 1990’s

Motorola’s market share had gone down to 10%. By Six Sigma, they could gain major
share in the market. Then Jack Welch of GE also followed Six Sigma.
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rd
 How is it different from traditional approach?

• A new metric, Defects Per Million Opportunities, to predict/assess the

quality of a business process

• A new methodology, DMAIC (Define-Measure-Analyze-Improve-Control),

to ensure that very high levels of quality could be assured in the chosen
business processes thereby generating favorable outcomes to both the
business and the customers

• An organizational framework for ensuring the above outcomes are

generated on a sustained basis

Traditional- % . Here we measure

Mahadevan (2015),–“Operations
defectsManagement:
per million
Theoryopportunities
& Practice”, 3 Edition © Pearson Education
rd
 Defects Per Million Opportunities (DPMO)
• It indicates how many defects a process generates in a million
opportunities
– While service industries find it convenient to use DPMO, manufacturing
organizations use Parts Per Million (PPM). Both are conceptually same.

• If in a process
– “k” Denotes the number of opportunities for making a defect per unit of
execution of that process
– “n” Number of units of observation of the process
– “d” Number of defects that occurred in that process during the observation
– The defects per million opportunity (DPMO) =  d  * 1,000,000
 k *n 

Ex: In Hotel reception, during Guest registration process, there are SIX opportunities for making
ERROR/DEFECT (k).
So, if 1000 guests register in a day (n),
And assuming Actual defects observed in a day is 10 (d),
DPMO = Mahadevan
10/(6*1000)*1000000 = 1666.7
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rd
 Process Capability
Which process is better?

Spread of a +2 +3

process is -3 -2 -1 +1
indicative of its
capability.
If the spread of MEAN
observations is
within 6
limits, then 99.73
percent of the
goods produced
will be within the
SPECIFICATION
LIMITS

6 Sigma limits of the spread.Mahadevan

Control limits
(2015), are Management:
“Operations closer than Specification
Theory limits
& Practice”, 3 Edition
rd © Pearson Education
Predictive capability of processes Offset
Which process is better?
Process
Mean

A process that is
aligned closer to Process B
the desired target is
likely to be more
capable


Process A

LSL Target USL

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 Process Improvements in long run
• When process is under statistical control, organization can try to further
improve the process.

• Process Capability: If a process can produce parts with minimum

variation, then it is said to be more capable than the other process where
variations are wider. The variation is studied wrt design specifications –
Center line, USL and LSL. Ex : process A and Process B.
• Processes with narrow spread have better process capability.

Mahadevan (2015), “Operations Management: Theory & Practice”, 3rd Edition © Pearson Education
 Process Improvements in long run
Process Capability: Cp

It is the ratio of the specified tolerance (ie the difference of Upper and Lower
specification limits) to the natural process variation
Fixed as per Customers
Requirements

• Cp= Voice of customer/Voice of the process

Capacity of
process/Machines actually
produced

• = Tolerance limit/Natural variation of the process

• = (USL-LSL)/6 

• Standard Deviation of a process is calculated by the formula:

Cp= Voice Mahadevan

of customer/Voice
(2015), “Operations of the process
Management: Theory & Practice”, 3
rd Edition © Pearson Education
 Process Capability
• Process Capability is defined by the spread of the
process

• Potential capability (Cp) is defined as the ratio of the

difference in specification limits to the process spread
Cp = Specification Range  (USL  LSL)
Pr ocess Capability 6

• Cp=>1, indicates Technically capable process

• Cp=2 indicates Six Sigma performance

Cp= Voice of customer/Voice

Mahadevan of theTheory
(2015), “Operations Management: process
& Practice”, 3
rd Edition © Pearson Education
 Process Improvements in long run
Process Capability: Cp

It is the ratio of the specified tolerance (ie the difference of Upper and Lower
specification limits) to the natural process variation
• Cp= Voice of customer/Voice of the process
• = Tolerance limit/Natural variation of the process
• = (USL-LSL)/6 
• Cp=>1, indicates Technically capable process
• Cp=2 indicates Six Sigma performance
• Standard Deviation of a process is calculated by the formula:

Cp= Voice Mahadevan

of customer/Voice
(2015), “Operations of the process
Management: Theory & Practice”, 3
rd Edition © Pearson Education
 Six sigma quality
A graphical representation

(USL  LSL)
Cp   2  (USL  LSL)  12  A spread of  6
6
Organizations follow two step process to achieve 6Sigma process:
1. Product designer has to design a product with maximum possible Tolerance
2. Process designer has to develop a process with narrowest possible process variation
3. This guarantees higher Process Capability.
4. Organizations use this measure while selecting Vendors
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