ALL SLIDES Chapter 1-4 - Quality Management

2017-05-14
Module 1: Introduction
to Quality
BUSD 2027: Quality Management
PowerPoint Disclaimer
All yellow slides in this PowerPoint are unaltered versions of the Managing
Quality: Integrating the Supply Chain slides created by Pearson Education, Inc.
These slides are under the following copyright:
All blue slides have been inserted as supplements as created by subject matter
experts of NorQuest College. They are a part of NorQuest copyright.
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2017-05-14
What is Quality?
To understand quality, we need to understand two other terms first:
• Products and Services
• Requirements
We should consider the following questions:
• What are products and services? What are requirements?
• Why do we need to communicate requirements effectively?
• With an understanding of requirements, products, and services ‐ what is the
definition of "Quality"?
• What is “Quality as it relates to perception?
• What is “Quality" as it relates to business success?
Products and Services
ISO 9001:2008
• Those intended for or required by the customer
• Any intended output from product realization processes
ISO 9001:2015
• Only applying to those intended for or required by the customer
• Those activities that take place at the customer interface, and
therefore cannot be evaluated (verified to meet customer
requirements) until they are delivered.
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Requirements
Customers have requirements:
• Stated ‐ what the customer says they want
• Implied ‐ what the customer thinks they want
Our society establishes legal requirements
• Statutory
• Regulatory
“Interested Parties” have requirements:
• Associations have codes of conduct
• Registering bodies, like ISO, have requirements
• Intellectual Property owners have licensing requirements
Requirements – ISO 9001:2015
Your organization “shall” determine
• The interested parties that are relevant
• The requirements of each interested party
Your organization “shall”
• Monitor and review information about those interested parties
and their requirements
• Ensure that your organization understands, or considers, the effect or
potential effect of these requirements on your organization’s ability
to provide products and services that meet those requirements
consistently.
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The Definition of “Quality”
Simple:
• “Meeting or exceeding your customers' expectations.”
Analytical:
• “The totality of features and characteristics of a product or service
that bears on its ability to satisfy given needs”
Statistical:
• "Reducing the variation around the target“
Salesman:
• “The customer’s definition of Quality is the only one that counts.”
(Quality Digest, 2001)
Poetic:
• "WOW": Suppose you were with your *soul mate*, *significant other*
*spouse* etc. and after (an intimate moment,) that person looked
longingly into your eyes and said
• "That met the requirements!" or
• "There were no defects there!" or
• "That had all the value I wanted!" or
• "The degree of excellence was acceptable!”.
• Wouldn't you rather have that person look into your eyes and
say "WOW!"?
(Quality Digest, 2001)
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By process of elimination:
• “Customers compare the service they 'experience' with what they
'expect' and when it does not match the expectation, a gap arises.”
Gap Model of Quality (1985)
• Gap 1: Knowledge ‐ consumer expectation v. management perception
• Gap 2: Standards ‐ management perception v. service quality
specification
• Gap 3: Delivery ‐ service quality specification v. service delivery
• Gap 4: Communication ‐ service delivery v. external communication
• Gap 5: Service ‐ expected service v. experienced service
(Boundless, 2016)
Gap Model of Quality (1985):
Service
EC PM PC
ESBU
Knowledge
Communication
Standards Delivery
Image: Boundless. (2016). The gap model [Digital Graphic]. Retrieved from https://www.boundless.com/marketing/textbooks/boundless‐marketing‐textbook/services‐marketing‐6/service‐quality‐51/the‐gap‐model‐254‐4140/. Used under CC BY‐SA 4.0.
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Gap Model of Quality (1985):
• Gap 1: Knowledge PM < EC
• Gap 2: Standards Requirements < PM
• Gap 3: Delivery Performance < Requirements
• Gap 4: Communication PC < Performance; PC < ESBU*
• Gap 5: Service PC < EC
• *SBU = Sales Build‐Up
(Boundless, 2016)
ISO 9000:2015
• Clause 3.6.2: Quality is the degree to which a set of inherent
characteristics of (products and services) fulfill requirements
• Clause 2.2.1: Quality is determined by:
• The ability to satisfy (the needs and expectations of) customers, and
• The intended and unintended impact on relevant interested parties,
not only in their intended function and performance, but also on
their perceived value and benefit to the customer
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Quality in Relation to Business Success
• How to build a sustainable business:
• Get agreement on customer requirements early
• Manage customer expectations throughout
• Deliver products and services that meet those requirements and exceed
those expectations
• Follow up
• Finally
• Quality is not a department; it’s a frame of mind
• Quality is the assumption in a business objective
• Plan for it
Product Quality Dimensions
• Performance – Efficiency with which a product achieves its
intended purpose
• Features – Attributes of a product that supplement the product’s
basic performance
• Reliability – The propensity for a product to perform consistently
over its useful design life
• Conformance – Adherence to certain numeric dimensions for the
product’s performance
Garvin, D., “What Does ‘Product Quality’ Really Mean?” Sloan Management Review (Fall 1984): 25‐43.
Copyright © 2017 Pearson Education, Inc. 1‐14
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Product Quality Dimensions
• Durability – The degree to which a product tolerates stress or
trauma without failing
• Serviceability – The ease of repair for a product
• Aesthetics – The degree to which product attributes are
matched to consumer preferences
• Perceived quality – A customer’s understanding of the goodness
of a product
Garvin, D., “What Does ‘Product Quality’ Really Mean?” Sloan Management Review (Fall 1984): 25‐43.
Service Quality Dimensions
• Tangibles – The physical appearance of the service facility, the
equipment, the personnel, and the communication materials
• Service reliability – The ability of the service provider to perform
the promised service dependably and accurately
• Responsiveness – The willingness of the service provider to be
helpful and prompt in providing service
• Assurance – The knowledge and courtesy of employees and their
ability to inspire trust and confidence
• Empathy – Caring, individualized attention from the service firm
Adapted from Parasuraman, A., Zeithamel, V., and Berry, L., “A Conceptual Model of Service Quality”
(Report No. 84‐106). Copyright © 1984 by Marketing Science Institute. Reprinted by permission.
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Functional Perspective on Quality
Organic view of the organization:
• Sees the whole as the sum of different parts, uniting to achieve an
end
• Communication between these parts is critical to ensure the
customer’s requirements are understood across the organization
• Quality is 80% communication; the other 20% is planning
A Supply Chain Perspective
Global supply chain model:
• Upstream processes (supply management) – All activities
involving interaction with suppliers
• Core processes (operations management) – Traditional process
improvement
• Downstream processes (customer relationship management) –
All activities involving interaction with customers
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An Engineering Perspective
Engineering:
• Applying mathematical
problem‐solving skills and
models to the problems of
business and industry
Copyright © 2017 Pearson Education, Inc. Figure 1‐2
1‐19
An Engineering Perspective
Shewart’s control process:
• The process underlying
Statistical Process Control
(SPC)
Figure 1‐3
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An Operations Perspective
Systems view:
• Understanding that product quality is the result of the interactions
of several variables, such as machines, labor, procedures,
planning, and management
• Focuses management on the system as the cause of quality
problems
A Strategic Management Perspective
• Strategy
• The planning process used by
an organization to achieve a
set of long‐term goals
• Mission
• Why the organization exists
• Core values
• Guiding principles that
simplify decision making in
that organization
Copyright © 2017 Pearson Education, Inc. Figure 1‐4
1‐22
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A Marketing Perspective
• Marketing
• Activities involved with directing the flows of products and services
from the producer to the consumer
• Customer relationship management
• Satisfying the customer and delivering value to the customer
• Perceived quality
• The customer’s view of quality
A Marketing Perspective
• Primary marketing tools for
influencing customer
perceptions of quality are
price and advertising.
• The customer is the focus of
marketing‐related quality
improvement.
Figure 1‐5
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A Financial Perspective
The law of diminishing marginal
returns:
• There is a point at which
investment in quality
improvement will become
uneconomical
• The pursuit of higher levels of
quality will result in higher
expenditures
• To invest beyond the minimum
cost level will result in Figure 1‐6
noneconomic decisions
The Human Resources Perspective
• Employee empowerment
• Moving decision making to the lowest level possible in the
organization
• Organizational design
• Design of reward systems, pay systems, organizational structure,
compensation, training mechanisms, and employee grievance
arbitration
• Job analysis
• Collecting detailed information about a particular job
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The Three Spheres of Quality
• Quality control
• Based on the Scientific Method
• Quality assurance
• Activities associated with guaranteeing the quality of a
product or service
• Quality management
• Ties together the control and assurance activities
• Ties in mutually beneficial relationships with suppliers
• Focuses on meeting the customer’s needs
• Emphasis on planning for quality
Figure 1‐7
Other Perspectives on Quality
• Value‐added perspective
• A subjective assessment of the efficacy of every step of the
process for the customer
• Cultural perspectives
• Differences in tastes and preferences among different cultures
• Contingency theory perspective
• There is no theory or method for operating a business that can be
applied in all instances
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History of Quality
Copyright © 2017 Pearson Education, Inc. Table 2‐1 2‐29
Dr. Walter Shewhart (1891‐1967)
• Two types of process variation:
Controlled (common)
Uncontrolled (special)
• Hypothesis → experiment → inspec on of data
• Control charts
https://id.wikipedia.org/wiki/Berkas:W
alterShewhart.gif
Image: Author Unknown. (n.d.). WalterShewhart [Photograph]. Retrieved from https://id.wikipedia.org/wiki/Berkas:WalterShewhart.gif. Used under CC BY‐SA 3.0.
Image: DanielPenfield. (2007). ControlChart [Digital Graphic]. Retrieved from https://commons.wikimedia.org/wiki/File:ControlChart.svg. Used under CC0.
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W. Edwards Deming (1900‐1993)
• Inspired by Shewart on process variability
• Used statistics to improve quality (i.e.
probability)
• “Funnel Experiment” – showed that tampering
with the process can increase variation, if the
root cause of the variation isn’t handled
Image: The W. Edwards Deming Institute. (1982). W. Edwards Deming, 1982 [Photograph]. Retrieved from https://deming.org/deming‐the‐man/photographs/all/w‐edwards‐deming‐1982‐1082. Used with permission from The W. Edwards Deming Institute®.
W. Edwards Deming
• Gained credibility because of his influence on Japanese and
American industry
• Best known for his emphasis on the management of a system for
quality
• His thinking was based on the use of statistics for continual
improvement.
• He provided lectures on statistical quality control to the Japanese
Union of Scientists and Engineers after World War II.
• The United States hired him when they realized that they were
lagging behind Japan in quality.
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Deming’s PDSA Cycle for Improvement
● Objective Consider these
● What changes
● Questions and
are to be made?
predictions questions throughout
● Next cycle
● Plan to carry out the the process:
cycle (Who, What,
Where, When
1. What are we trying
to accomplish?
2. How will we know
that a change is an
improvement?
3. What change can
● Complete the ● Carry out the plan
data analysis ● Document
we make that will
● Compare data to problems and result in
predictions unexpected improvement?
● Summarize what observations
was learned ● Begin data analysis
More of Deming’s Ideas
• Concept of profound knowledge:
• Appreciation for a system and how it can be improved by:
• PDSA
• Knowledge about variation
• Distinguishing controlled and special‐cause variation (w/assignable cause)
• Theory of knowledge (fact‐based decisions making)
• Psychology (for improved interactions)
• Defined quality as “non‐faculty systems”
• Poor quality results from poor management of the system, not by the
workers
• Quality is the responsibility of all employees
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More of Deming’s Ideas
• 14‐Points for Management
• Still influential today
• ISO 9001 emphasizes management involved and other aspects of the 14‐
points
Deming 14 Points of Management
Deming believed that the historic approach to quality used
by American management was wrong in one fundamental
aspect:
• Poor quality was not the fault of labor.
• It resulted from poor management of the system for continual
improvement.
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Deming 14 Points of Management
1. Create constancy of purpose toward improvement of product
and service with the aim to become competitive, stay in
business, and provide jobs.
1. Adopt a new philosophy. We are in a new economic age.
1. Cease dependence on mass inspection to improve quality.
1. End the practice of awarding business on the basis of price tag
alone.
Deming 14 Points of Management (cont’d)
5. Improve constantly and forever the system of production and
service to improve quality and productivity, and thus
constantly decrease cost.
6. Institute training on the job.
7. Improve leadership.
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8. Drive out fear so that everyone may work effectively for the
company.
8. Break down barriers between departments.
8. Eliminate slogans, exhortations, and targets for the workforce
that ask for zero defects and new levels of productivity.
11. Eliminate work standards on the factory floor.
12. Remove barriers that rob workers of their right to pride in
the quality of their work.
12. Institute a vigorous program of education and self‐
improvement.
12. Put everybody in the company to work to accomplish the
transformation.
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Deming’s 7 Deadly Diseases and Cost of Quality
Fewer Better Use Capture

Decreased Improved Stay in
Improved Quality Mistakes of Larger More Jobs
Costs Productivity Business
and Delays Resources Market
Image: Calispa, B.S. (2016). Quality Guru [Digital Graphic]. Retrieved from https://www.slideshare.net/BrithmanSantiago/quality‐guru‐61481152?qid=75ca3b51‐44f1‐4fca‐bc9a‐3b885a0711a4&v=&b=&from_search=7. Used under CC0.
Joseph M. Juran (1904‐2008)
• Definitions of quality included:
• Fitness for use
• Features of products which meet customer needs and thereby provide
customer satisfaction
• Freedom from deficiencies
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Joseph Juran
• Was responsible for the growth of quality in the past half‐century
• Took a more strategic and planning‐based approach to
improvement than Deming
• Promotes the view that organizational quality problems are largely
the result of insufficient and ineffective planning for quality
• Argues that companies must revise strategic planning processes and
achieve mastery over these processes
The Juran Trilogy
• Planning
• Providing the operating forces with the means of producing products
that can meet the customer’s needs
• Control
• A process‐related activity that ensures processes are stable and
provides a relatively consistent outcome
• Improvement
• Must be accomplished on a project‐by‐project basis
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Steps in the Juran Trilogy
Image: Bright, A. (2016). Achieving built‐in‐quality: Actions and implementations [Digital Graphic]. Retrieved from https://www.slideshare.net/AprilBright/achieving‐builtinquality‐actions‐and‐implementation‐omtec‐2016?qid=8f0e7a9f‐2bae‐4d3b‐bde3‐
c047a906de58&v=&b=&from_search=3. Used under CC0.
Juran’s 10 Point Plan
1. Build awareness of need and opportunity for improvement
2. Set goals for improvement
3. Organize to reach goals
4. Provide training
5. Carry out projects to solve problems
6. Report progress
7. Give recognition
8. Communicate results
9. Keep score
10. Maintain momentum by making annual improvement part of the regular
systems and processes of the company
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Juran’s Pareto Law
• Called the 80/20 Rule
• Using Pareto’s law, the majority of quality problems are the
result of relatively few causes.
• Compare the “vital few” to the “trivial, but useful, many”
Armand Feigenbaum (1922‐2014)
• Three‐step process to improving quality
• Quality leadership
• Quality technology
• Organizational commitment
• Major impediments to improving quality
• Hothouse quality
• Wishful thinking
• Producing overseas
• Confining quality to the factory
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Feigenbaum’s 19 Steps
Based on A. Feigenbaum, Total Quality Control (New York: McGraw‐Hill, 1991; original 1951).
Table 2‐4
More Ideas from Feigenbaum
1. Quality is a company‐wide process.
2. Quality is what the customer says it is.
3. Quality and cost are a sum, not a difference.
4. Quality requires both individual and team zealotry.
5. Quality is a way of managing.
6. Quality and innovation are mutually dependent.
7. Quality is an ethic.
8. Quality requires continuous improvement.
9. Quality is the most cost‐effective, least capital‐intensive route to
productivity.
10.Quality is implemented with a total system connected with customers
and suppliers.
(Dale et al., 1994, p.42)
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Philip Crosby (1926‐2001)
• Became well known for the authorship of his book, Quality is Free
• Emphasized the zero‐defects approach and the behavioral and
motivational aspects of quality improvement rather than statistical
approaches
• Adopted a human resource approach similar to Deming
Crosby’s Quality Management
• Four absolutes:
1. Quality can only be managed once it’s defined in terms of measurable
customer requirements
2. Prevention of defects with a quality system that determines the root
cause of defects and prevents their recurrence
3. Systems that allow workers to do it right the first time with a
performance standard of zero defects
4. Measuring the costs of quality (dissatisfied customers, wasted
resources) in order to justify improved equipment and processes to
reduce defects
(Summers, 2009, p.44)
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Crosby’s 14 Steps
Based on P. Crosby, Quality Is Free: The Art of Making Quality Certain (New York: Mentor Executive Library, 1979). Reproduced with permission of The
McGraw‐Hill Companies. Table 2‐5
Kaoru Ishikawa (1915‐1989)
• Great believer in training with major contribution on the total
involvement of the operating employees in improving quality
• Developed the basic seven tools of quality (B7)
• Credited with democratizing statistics
• Coined the term company‐wide quality control
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Ishikawa’s 11 Points
Adapted from K. Ishikawa, Guide to Quality Control (White Plains, NY: Quality Resources, 1968).
Table 2‐3
More of Ishikawa’s Contributions
• Invented the cause‐and‐effect (fish‐bone) diagram to better understand
quality issues
• Encouraged the use of 7 quality tools:
• Histograms
• Check sheets
• Scatter diagrams
• Flowcharts
• Control charts
• Pareto charts
• Cause‐and‐effect diagram
• Discouraged the use of “quality circles” – teams that meet to solve quality
problems
(Summers, 2009, p.45)
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• Quality should be broadly defined to include the: price, delivery, and safety
that satisfy the customers’ needs
• 6 fundamentals:
1. All employees should clearly understand the objectives behind quality
control
2. Quality system features should be clarified at all levels
3. Continuous improvement cycle should be applied
4. Company should define a long‐term quality plan and carry it out
5. Wall between departments and functions should be broken down
6. Everyone should act with confidence
(Summers, 2009, p.45)
4 major focus areas:
1. Market in Quality: Leadership should encourage efforts that enable the
organization to determine the customer needs, wants, requirements and
expectations.
2. Worker Involvement: Quality improvement through the use of cross‐
functional teams enhances the organization’s ability to capture
improvements in the work process.
3. Quality begins and end with education: Education enhances ability to see the
big picture as well as understanding.
4. Selfless Personal Commitment: Improving the quality of the experience of
working together helps improve the quality of life in the world.
(Summers, 2009, p.46‐47)
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Genichi Taguchi
The Taguchi method provides:
• A basis for determining the functional relationship between
controllable product or service design factors and the outcomes of
a process
• A method for adjusting the mean of a process by optimizing
controllable variables
• A procedure for examining the relationship between random
noise in the process and product or service variability
Genichi Taguchi
Unique aspects of the Taguchi method include:
• Definition of quality
• Quality loss function
• Concept of robust design
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Taguchi Experiments
Taguchi developed a design for statistically planned experiments to
identify how quality is affected. There are four basic steps:
1. Select the process/product to be studied.
2. Identify the important variables.
3. Reduce variation on the important variables through redesign, process
improvement, and tolerancing.
4. Open up tolerances on unimportant variables.
(Summers, 2009, p.48)
Viewing Quality from a Contingency
Perspective
• There is a mass of contradictory information, therefore it is
best to focus on fundamental questions:
• What are our strengths?
• What are our competencies?
• In what areas do we need to improve?
• What are our competitors doing to improve?
• What is our organizational structure?
• Contingency perspective – Successful firms adopt aspects of
each of the various approaches that help them improve.
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Resolving the Differences in Quality
Approaches: An Integrative View
Core variables:
• Leadership • Role of quality department
• Information analysis • Environmental characteristics and
• Strategic planning constraints
• Employee improvement • Philosophy driven
• Quality assurance of products • Quality breakthrough
and services • Project/team‐based improvement
• Customer role in quality
Quality Improvement Content Variables
Table 2‐7
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Theoretical Framework for Quality
Management
Figure 2‐6
Works Cited (Blue Slides Only)
Boundless. (2016). The gap model (v.8). Retrieved from https://www.boundless.com/marketing/textbooks/boundless‐marketing‐
textbook/services‐marketing‐6/service‐quality‐51/the‐gap‐model‐254‐4140/
Dale, B. G., Boaden, R. J. and Lascelles, D. M. (1994). Managing quality. Upper Saddle River, NJ: Prentice Hall International.
Quality Digest. (2011). Definition of quality: How do you define it? Quality Digest. Retrieved from https://www.qualitydigest.com/
magazine/2001/nov/article/definition‐quality.html#
Summers, D.C. (2009). Quality management: Creating and sustaining organizational effectiveness (2nd ed.). Upper Saddle River, NJ:
Pearson Education, Inc.
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Module 2: Practical
Applications of Quality
Management
BUSD 2027: Quality Management
PowerPoint Disclaimer
All yellow slides in this PowerPoint are unaltered versions of the Managing
Quality: Integrating the Supply Chain slides created by Pearson Education, Inc.
These slides are under the following copyright:
All blue slides have been inserted as supplements as created by subject matter
experts of NorQuest College. They are a part of NorQuest copyright.
1
2017-05-14
Statistical Terms
Mean – add up all the numbers and divide by how many numbers there are
Mode – The value which occurs most frequently
Median – The middle value of a range of values
Range – Difference between the highest and lowest value
Statistical Terms
Mean
Median
Standard Deviation – a Mode
measure of how much the
values are distributed around
the mean
Normal Distribution (Bell
Curve) – mean = median =
mode; half the values are above
the mean and half the values 1 standard
are below the mean deviation
Image: Toews, M.W. (2007). Standard deviation diagram [Digital Graphic]. Retrieved from https://commons.wikimedia.org/wiki/File:Standard_deviation_diagram.svg. Used under CC BY 2.5.
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Statistical Terms
Standard Deviation
xbar = average of all values in data set (sample)
x = one of the values in the data set (sample)
n = number of points in the data set (sample)
• Note that xbar is not the average of the whole population, just your sample.
The true average would require 100% of the population. So to ensure that
xbar is useful, we have to ensure that we have a significant sample (i.e.
sample size).
Statistical Terms
Standard Deviation
Notice the dependency in this expression. Xbar is the average of all of the values in
the sample, while X is one of those values. The average value, Xbar, is therefore
always somewhere in the middle of that collection of values because it is dependent
on your sample. Xbar is not some magical number related to the population from
which you drew the samples. It is entirely dependent on the values you included in
yours sample. The true average of the population is not known until 100% of the
values in the population are known. To make the leap to assume that Xbar is a
reasonable approximation of the average value in the population, we must assume
that every set of samples we draw has an equal representation of values that are
smaller than the average and larger than the average ‐ that is, the average deviation
to the low side of average is the same as the average deviation to the high side.
(Gorard, 2004)
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Statistical Terms
Standard Deviation
So the formula for standard deviation includes a function that calculates the average
deviation. The average deviation is the sum of deviations divided by the number of
deviations that were included in the sum. Our challenge, is that some of those
deviations are negative (when Xbar is greater than X) and some of them are positive
(when Xbar is less than X).
We could have just added up the deviations and seen how closely the sum
approaches zero; that doesn’t tell us anything about how wide the spread is, just
whether our sample is balanced. To eliminate the negative sign in some of these
deviations, we have two choices. We could ignore the negative sign, and treat all
deviations as positive ‐ that is, take the absolute value of the deviation, or we could
square the negative number, utilizing the rule that two negative numbers multiplied
together results in a positive. The latter, the “sum of squares” approach, has been the
preference of mathematicians because it lends itself to mathematical manipulation.
(Gorard, 2004)
Statistical Terms
Mean Deviation
However, the efficient and accurate approximation of the sample’s standard deviation
to the population’s standard deviation holds true only if the values are considered to
be true values. If there is measurement error associated with the values, then the two
methods are equally valid. In estimation, the mean deviation, calculating the average
absolute difference between individual values and the mean value is preferable to
standard deviation because:
• It is more efficient in calculating the spread of a normally distributed population
where there is a degree of measurement error in the results
• It is more efficient when the population is not perfectly normally distributed, or
normally distributed at all
(Gorard, 2004)
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Statistical Terms
Mean Deviation
∑| ̅|
mean deviation
xbar = average of all values in data set (sample)
x = one of the values in the data set (sample)
n = number of points in the data set (sample)
Statistical Terms
Standard Deviation
In particular, the benefits of mean deviation in non‐normal or not perfectly normal
distributions are two‐fold.
Firstly, the concept of “normal” is theoretical, and affords advantages in that the
population can de described by two characteristics, the mean and the standard
deviation. In so many cases, we can’t prove that the population is normally
distributed; applying the formulas for normal distributions to data that is not perfectly
normal introduces error and can lead to misinterpretation.
Secondly, the larger the deviation from the mean, the more effect the value has on
the calculation of standard deviation. Because these “outliers” have a greater
influence in the calculated values than those clustered around the mean, we are
encouraged to find reasons to disregard them.
(Gorard, 2004)
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Statistical Terms
z‐score – The number of
standard deviations from the
mean
• To convert a value to a z‐
score, subtract the mean
and then divide by the
standard deviation
cumulative percent – the

percentage of the distribution
that lies below the z‐score
value
Image: Heds 1. (2007). The normal distribution [Digital Graphic]. Retrieved from https://commons.wikimedia.org/wiki/File:The_Normal_Distribution.svg. Used under CC0.
Statistical Terms
You may hear about these as you read statistics:
Null hypothesis (HO) ‐ In any study you create alternative and null hypothesis.
The alternative is that your data is statistically relevant, the null is that it is not
(i.e. your observances are purely from chance).
Central limit theorem ‐ distribution of the mean of any independent, random
variable (i.e. your data in an appropriately collected study) will be normal or
nearly normal (i.e. if you were to graph it it should have a distribution that
looks like a bell curve)
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https://www.stat.tamu.edu/~lzhou/stat302/T-
Table.pdf
How to tell whether a
sample is part of a
population (are two
distributions different)
t-test to Compare Two Sample Means
In this case, we require two separate sample means, standard deviations
and sample sizes. The t-statistic (t) and number of degrees of freedom
(d.o.f.) are computed:
http://www.chem.utoronto.ca/coursenotes/analsci/stats/ttest.html
The calculated values for t and d.o.f. (or d.f.) are used in a table of t values, and
if the calculated value is greater than the value in the table, the two samples, or
the sample and population, are different.
10-13
Overlapping normal distributions. Linacre JM. … Rasch

Measurement Transactions, 1996, 10:1 p.487
https://www.rasch.org/rmt/rmt101r.htm
10-14
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Statistical Thinking
• Statistical thinking is a decision‐making skill demonstrated
by the ability to draw conclusions based on data.
• Statistical thinking is based on three concepts:
• All work occurs in a system of interconnected processes.
• All processes have variation (the amount of variation tends to be
underestimated).
• Understanding variation and reducing variation are important keys
to success.
Why Do Statistics Sometimes Fail in the
Workplace?
• A lack of knowledge about the tools leads to tools being
misapplied.
• General disdain for all things mathematical creates a natural
barrier to the use of statistics. When was the last time you
heard someone proclaim a love for statistics?
• Cultural barriers in a company make the use of statistics for
continual improvement difficult.
• Statistical specialists have trouble communicating with
managerial generalists.
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Workplace? (cont’d)
• Statistics generally are poorly taught, emphasizing
mathematical development rather than application.
• People have a poor understanding of the scientific method.
• Organizations lack patience in collecting data. All decisions
have to be made “yesterday.”
• Statistics are viewed as something to buttress an already‐
held opinion rather than a method for informing and
improving decision making.
• People fear using statistics because they fear they may violate
critical statistical assumptions. Time‐ordered data are messy and
require advanced statistical techniques to be used effectively.
• Most people don’t understand random variation, resulting in too
much process tampering.
• Statistical tools often are reactive and focus on effects rather than
causes.
• When either type I or type II errors occur, erroneous decisions are
made relative to products that can result in high costs or lost
future sales.
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• Type 1 error
• Producer’s risk
• Probability that a good product will be rejected
• Type 2 error
• Consumer’s risk
• Probability that a nonconforming product will be available for sale
Understanding Process Variation
• All processes exhibit variation
• Some variation can be managed and some cannot be managed.
• Types of process variation:
• Random
• Nonrandom
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Random Variation
• Also called common cause
• Centered around the
mean and occurs with a
somewhat consistent
amount of dispersion
• Uncontrolled variation
• May be either large or
small Figure 11‐1
Nonrandom Variation
• Also called special cause
variation
• Results from some event
which may be a shift in a
process mean or some
unexpected occurrence
• Dispersion and average of
the process are changing
• Process is not repeatable Figure 11‐2
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Process Stability
• The variation that we observe in the process is random
variation and not nonrandom.
• Process charts
• Graphs designed to signal process workers when nonrandom
variation is occurring in a process
Sampling Methods
Reasons why sampling is used:
• Samples are cheaper, take less time, are less intrusive, and allow
the user to frame the sample.
• If quality testing is destructive, 100% inspection would be
impossible.
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Sampling Methods
Reasons why 100% inspection is used:
• When a lot of material has been rejected in the past and materials
must be sorted to keep good materials and return defective
materials for a refund
• When employees perform their own in‐process inspection
Sampling Methods
• Random samples
• To sample in such a way that every piece or product has an equal
chance of being selected for inspection
• Systematic samples
• To sample according to time or according to sequence
• Rational subgroup samples
• To sample by a group of data that is logically homogenous
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Planning for Inspection
Questions to answer about sampling:
• What type of planning will be used?
• Who will perform the inspection?
• Who will use in‐process inspection?
• What is the sample size?
• What are the critical attributes to be inspected?
• Where should the inspection be performed?
Sampling Size and Frequency
The standard form of a sample size equation, to a confidence level of 95%, is:
To detect a shift of 1 standard deviation, the number of samples required is:
To detect a shift of 3 standard deviations, the number of samples required is
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Sampling Size and Frequency
4 Issues to Consider:
1. Basis for Sampling – Samples should be as homogenous as possible
2. Sample Size – There is a trade‐off between cost and information. Small
samples sizes involve less time, large sample sizes provide more information.
3. Frequency of Sampling – There is a trade‐off between cost and information.

Samples should be taken frequent enough to provide an opportunity to
detect changes quick and minimize non‐conforming output.
4. Location of Control Limits – Need to avoid incorrectly believing a special cause

is present, but also need to identify special causes that are present even
through points are within control limits.
(Evans & Lindsay, 2015, p.259‐260)
Control Plans
• Provide a documented, proactive approach to defining how
to respond when process control charts show that a
process is out of control
• Required part of an ISO 9000 quality management system
(QMS)
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Control Plan Sample
Figure 11‐3
Process Control Charts
Statistical process control charts:
• Tools for monitoring process variation
Figure 11‐4
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Variables and Attributes Control Charts
• Variable
• Continuous measurement such as height, weight, or volume
• Attribute
• An either‐or situation, such as a motor starting or not, or a lens
being scratched or not
The most common types of variable and attribute charts
Table 11‐1
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Central requirements for properly using process charts:
1. You must understand this generic process for implementing
process charts.
2. You must know how to interpret process charts.
3. You need to know when different process charts are used.
4. You need to know how to compute limits for the different types
of process charts.
5. We treat each of these topics separately.
Steps in developing process control charts:
1. Identify critical operations in the process where inspection might
be needed. These are operations in which the product will be
negatively affected if the operation is performed improperly.
2. Identify critical product characteristics. These are the aspects of
the product that will result in either good or poor functioning of
the product.
3. Determine whether the critical product characteristic is a
variable or an attribute.
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Steps in developing process control charts (cont’d):
4. Select the appropriate process control chart from among the
many types of control charts. (This decision process and the
types of charts available are discussed later.)
5. Establish the control limits and use the chart to continually
monitor and improve.
6. Update the limits when changes have been made to the process.
Understanding Process Charts
• Process charts are an application of hypothesis testing
where the null hypothesis is that the process is stable.
• For example:
• Null Hypothesis: Ho: μ = 11 inches
• Alternative Hypothesis: H1: μ 11 inches
≠
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Understanding Process Charts
Hypothesis Testing
Figure 11‐5
Process Chart
Figure 11‐6
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Standard Process Chart Form
Figure 11‐7
Completed Process Chart Form
Figure 11‐8
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x and R Charts Calculation Worksheet
Figure 11‐9
Calculations for Figure 11‐8 Data
Figure 11‐10
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Control Charts for Variables
Table 3.1
Copyright ©2016 Pearson Education, Inc. All rights reserved. 1-45
Interpreting Control Charts
Signals for
concern sent by
a control chart
Hansen, Bertrand L. Quality Control: Theory and Applications. Upper Saddle River, NJ: Pearson Education
(1964). ISBN: 013745208X. ©1964, p.65. Reprinted and Electronically reproduced by permission of Pearson
Education, Inc., New York, NY.
Figure 11‐11
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Signals for
concern sent by
a control chart
(cont’d)
Hansen, Bertrand L. Quality Control: Theory and Applications. Upper Saddle River, NJ: Pearson Education
(1964). ISBN: 013745208X. ©1964, p.65. Reprinted and Electronically reproduced by permission of Pearson
Education, Inc., New York, NY.
Figure 11‐11
Out‐of‐control situations:
• Two points in succession farther than two standard deviations
from the mean
• Process run – Five points in succession either above or below the
center line
• Process drift – Seven points, all increasing or decreasing
• Erratic behavior – Large jumps of more than three or four
standard deviations
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Example 11‐1
• Problem: The Sampson Company produces high‐tech radar
that is used in top‐secret weapons by the Secret Service and
the Green Berets. It has had trouble with a particular round
component with a target of 6 centimeters. Samples of size 4
were taken during four successive days.
• The results are in the following table.
Example 11‐1
• Develop a process chart to determine whether the process is stable.
Because these are measurements, use x and R charts.
• Using the calculation work sheet, Figure 11‐12 shows the values for the
process control limits.
• The x control chart for this problem is shown with the appropriate
limits. The R chart is also in control. The sample averages were placed
on the control chart, and the process was found to be historically in
control. Because the averages and ranges fall within the control limits,
and no other signals of nonrandom activity are present, we conclude
that the process variation is random.
• Note that this example is very simple. Generally, you use 15 to 20
subgroups to establish control charts.
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Example 11‐1
•
Figure 11‐12
Example 11‐1
Calculations
using Excel
Microsoft Excel, Microsoft Corporation. Used by permission.
Figure 11‐13
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X and Moving Range (MR) Charts for
Population Data
X and MR charts are used if you have a variable
measurement that you want to monitor and do not have
enough observations to use sampling.
• Central limit theorem does not apply, which may result in the data
being non‐normally distributed.
• Therefore, there is an increase in the likelihood that you will draw
an erroneous conclusion.
• It is best to first make sure that the data are normally distributed.
X and Moving Range (MR) Charts for
Population Data
• X chart limits
• Center line:
• Limits:
• MR limits
• Same as R chart (where n=2),except that the ranges are computed
as the differences from one sample to the next
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Example 11‐2
• Problem: The EA Trucking Company of Columbia, Missouri
hauls corn from local fields to the SL Processing Plant in
Lincoln, Nebraska. Although the trucks generally take 6.5
hours to make the daily trip, recently there seems to be
more variability in the arrival times. Mr. Everett, the owner,
suspects that one of his drivers, Paul, may be visiting his
girlfriend Janice en route in Kansas City. The driver claims
that this is not the case and that the increase is simply
random variation because of variability in traffic flows. The
drivers keep written logs of departure and arrival times.
Example 11‐2
Mr. Everett has listed
these times in the
following table. You
are chosen as the
analyst to investigate
this situation. What do
you think?
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Example 11‐2
• Solution: You
develop an X and
MR process chart to
test the hypothesis.
The results from
Excel are in Figure
11‐14.
Microsoft Excel, Microsoft Corporation. Used by permission. Figure 11‐14
Median Charts
• Median charts may be used if it is too time consuming or
inconvenient to compute subgroup averages or you have
concerns about the accuracy of computed means.
• Need to use an odd sample size, usually 3, 5, or 7
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Median Chart Limits
• Center line:
• Control limits:
Example 11‐3
• Problem: The Luftig food company has gathered the
following data with weights of its new health food product.
Because the published weight on the package is 6 ounces,
Mr. Luftig wants to know if the company is complying with
weight requirements.
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Example 11‐3
Twenty samples
of size 5 were
drawn.
Example 11‐3
• Solution: Results
show that the process
is not in control, with
an average median of
6.23. The median
process chart does
show that some
product is being made
that is below 6
ounces. It also shows
that points 4, 7, and
10 are out of control. Microsoft Excel, Microsoft Corporation. Used by permission. Figure 11‐15
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Where:
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Table 11‐3
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Example 11‐4
• Problem: Twenty samples were taken for a milled rod. The
diameters are needed to determine whether the process is
in control. Because these milled rods must be measured
within 1/10,000 of an inch, it is determined that the process
dispersion is important.
• Therefore, you need to use an s and x chart to monitor the
process. The data are found in Figure 11‐16. We have 20
samples with n = 3.
Example 11‐4
• Solution: The control
charts in Figure 11‐
16 show that the
process is in control.
There is no need for
corrective action.
The solution method
is demonstrated in
the next section.
Microsoft Excel, Microsoft Corporation. Used by permission. Figure 11‐16
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Other Control Charts
Summary of Variables Chart Formulas
Table 11‐4
Moving Average Chart
A chart for monitoring variables and measurement on a
continuous scale by using past information to predict what
the next process outcome will be
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Cusum Chart
A chart used to identify slight but sustained shifts in a
universe in which there is no independence between
observations
Figure 11‐17
CUSUM Example Sample
1
2
x
0.175
0.152
SH
0.001
0.000
SL
0.000
0.000
3 0.150 0.000 0.000
4 0.207 0.033 0.000
5 0.136 0.000 ‐0.010
6 0.212 0.038 0.000
7 0.166 0.030 0.000
8 0.141 0.000 ‐0.005
9 0.157 0.000 0.000
10 0.197 0.023 0.000
11 0.172 0.021 0.000
12 0.183 0.030 0.000
13 0.166 0.022 0.000
14 0.164 0.012 0.000
15 0.141 0.000 ‐0.005
16 0.186 0.012 0.000
17 0.127 0.000 ‐0.019
18 0.149 0.000 ‐0.016
19 0.155 0.000 ‐0.007
20 0.210 0.036 0.000
21 0.197 0.059 0.000
22 0.191 0.076 0.000
23 0.211 0.113 0.000
24 0.158 0.097 0.000
25 0.201 0.124 0.000
Image: SPC for Excel. (2017). Keeping the process on target: CUSUM charts [Digital Graphic]. Retrieved from https://www.spcforexcel.com/knowledge/variable‐control‐charts/keeping‐process‐target‐cusum‐charts.
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Understanding Attributes Charts
• Defect – an irregularity or problem with a larger unit
• Countable; can be several within one unit
• Monitored using c and u charts
• Defective – a unit that, as a whole, is not acceptable or
does not meet performance requirements
• Monitored using p and np charts
Process Charts
• A process chart (or p chart) is used to graph the proportion
of items in a sample that are defective or nonconforming to
specification.
• They are also used to determine when there has been a
shift in the proportion defective for a particular product or
service.
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p Charts Calculations
• Subgroup sizes
• Typically between 50‐100 units, and can be of different sizes
• Formulas for control limits:
where:
np Charts
• A graph of the number of defectives (or nonconforming
units) in a subgroup
• Requires that the sample size of each subgroup be the
same each time a sample is drawn
• If sample sizes are equal, either the p or np chart can be

used.
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c Charts
• A graph of the number of defects (nonconformities) per
unit
• Units must be of the same metric such as height, length,
volume, and so on.
• Used to detect nonrandom events in the life of the
production process and when you are inspecting the same
size sample space
u Charts
• A graph of the average number of defects per unit
• Allows for the units sampled to be different sizes, areas,
heights, etc.
• The uses for the u chart are the same as the c chart.
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Choosing the Correct Variables Control
Chart
Figure 11‐18
Corrective Action
Corrective action steps when a process is out of control:
1. Carefully identify the quality problem.
2. Form the appropriate team to evaluate and solve the problem.
3. Use problem solving methodology, fishbone diagrams or 5
Why’s to identify causes of problems.
4. Brainstorm to identify potential solutions to problems.
5. Eliminate the cause.
6. Restart the process.
7. Document the problem, root causes, and solutions.
8. Communicate the results of the process to all personnel so this
process becomes reinforced and ingrained in the organization.
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Using Control Charts to Continuously
Improve
Two key concepts:
• The focus of control charts should be on continuous improvement.
• Control chart limits should be updated only when there is a
change to the process. Otherwise, any changes are unexpected.
Effects of Tampering with the Process
Figure 11‐19
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Process Capability for Variables
• The capability of a process to produce a product that meets
specification
• World‐class levels of process capability are measured by
parts per million (ppm) defect levels.
Process Capability for Variables
Six Sigma programs result in highly capable processes and an
average of only 3.4 defects per million units produced.
Figure 11‐20
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Population versus Sampling Distributions
• Population distributions
• Distributions with all individual responses from an entire
population
• Population
• A collection of all the items or observations of interest to a
decision maker
• Sample
• A subset of the population
• Sampling distributions
• Distributions that reflect the distribution of sample means
Population and Sampling Distributions for Class Heights
Figure 11‐21
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• In the context of quality, specifications and capability are
associated with population distributions.
• Sample‐based process charts and stability are computed
statistically and reflect sampling distributions.
• Quality practitioners should not compare process chart
limits with product specifications.
Capability Studies
Reasons to perform a process capability study:
1. To determine whether a process consistently results in products
that meet specifications
2. To determine whether a process is in need of monitoring
through the use of permanent process charts
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Capability Studies
Five steps to perform process capability studies:
1. Select a critical operation. These may be bottlenecks, costly
steps of the process, or places in the process in which problems
have occurred in the past.
2. Take k samples of size n, where x is an individual observation.
• Where 19 < k < 26
• If x is an attribute, n > 50 (as in the case of a binomial)
• Or if x is a measurement, 1 < n < 11
3. Use a trial control chart to see whether the process is stable.
Capability Studies
Five steps to perform process capability studies (cont’d):
4. Compare process natural tolerance limits with specification
limits. Note that natural tolerance limits are three standard
deviation limits for the population distribution. This can be
compared with the specification limits.
5. Compute capability indexes. To compute capability indexes,
compute an upper capability index (Cpu), a lower capability
index (Cpl), and a capability index (Cpk). The formulas are:
Where:
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Capability Studies
• Although different firms use different benchmarks, the
generally accepted benchmarks for process capability are
1.25, 1.33, and 2.0.
• We will say that processes that achieve capability indexes
(Cpk) of 1.25 are capable, 1.33 are highly capable, and 2.0
are world‐class capable (Six Sigma).
Example 11‐5
•
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Example 11‐5
• Solution:
• The process capability is poor.
• To compute the proportion of nonconforming product
being produced:
Example 11‐5
Proportion of Product Nonconforming
Figure 11‐22
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Population Capability Index (Ppk)
Rather than using within‐groups variation to estimate the
sigma that you used in Cpk, use the population standard
deviation to compute your capability.
Where:
Example 11‐6
• Problem: The upper and lower specification limits
(tolerances) for a metal plate are 3 millimeters + 0.002
millimeters. A sample of 100 plates yielded a mean x of
3.001 millimeters. We know that the population standard
deviation is .0002. Compute the Ppk for this product.
• Solution:
Therefore, the process is highly capable.
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Capability versus Stability
• A process is capable if individual products consistently
meet specification.
• A process is stable if only common variation is present in
the process.
Problem Solving: The Four Rational
Processes
Charles Kepner (a social psychologist) and Benjamine Tregoe (a sociologist)
worked with advanced defense systems.
Over the years, they thought about the ways people use information in a
highly‐automated data processing system.
The research and conclusions compiled by Kepner and Tregoe resulted in a

foundational textbook for management studies: “The Rational Manager: A
Systematic Approach to Problem Solving and Decision Making” launched
the careers of Kepner and Tregoe as management consultants.
As they have both recently passed, their company, Kepner‐Tregoe Inc.,
continues as the leader and authority on the rational processes.
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Processes
Pattern of Thought Concept Rational Process
What’s going on? Clarification Situation appraisal
Why did this happen? Cause and effect Problem solving
What course of action should

Choice Decision making
we take?
Potential problem (opportunity)

What lies ahead? Consider future possibilities
analysis
Processes
Problem Solving
Not all gaps are problems. If you have a gap, and you don’t know why the
gap exists, and you need to know why the gap exists in order to address it,
then you have a problem to solve. It’s that simple. If you don’t have a
problem, move on to the next Rational Process and see if you need that.
If you do have a problem, then the fastest way to solve it is to follow these
steps IN ORDER. Order is important here, because often problem solving
becomes a very drawn‐out affair with poor results because the process is
followed out of sequence.
(Kepner & Tregoe, 1965)
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Problem Solving: Step 1
Create a problem statement that clearly defines the gap you are facing, in
terms of two important characteristics: the object and the deviation.
i. The object is the item on which the gap exists. This can be an actual
object, like
i. a stapler that doesn’t work, or
ii. a piece of fruit that is bruised
or it be less physical, like a conversation or a concept. The object
represents the entity that is not meeting a standard or an ideal.
ii. The specific gap on, around, or about the object is known as the deviation
ii. The bent staple
iii. The bruise on the fruit
iv. The uncomfortable nature of the conversation, etc.
Create a problem specification answering the following questions:
Question Is Is Not
What is the object?

What is the deviation?
Where is the defect on the object?

Where is the object when the deviation is first observed?
When is the deviation first observed in clock and calendar time?

When is the deviation first observed in the object’s life cycle?
When, since then, has it been observed? Is there a pattern?
How many objects have the defect?

How many deviations are there on the object?
How big is each deviation?
Is there a trend in the number of occurrences of the deviation?
Is there a trend in the size of the deviation?
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Reviewing the problem specification, including both the “Is” and “Is Not”
statements, imagine a number of possible causes. Write each possible cause in a
separate statement. This exercise is not the same as “Brainstorming”, a technique
often associated with problem‐solving exercises. Unlike brainstorming, this is not
a free flow of ideas. In this case, your imagination is bounded by the factors
documented in the problem statement, and one or both of the following:
a) The knowledge and experience of the problem‐solving team:
Tapping into the knowledge and experience of the members of the
project team, or other experts that might be available, imagine what
could have caused the deviations.
a) Distinctions between the factors in the problem statement, and changes
that are known to have occurred within or shortly before the period
during which the deviations were observed (Kepner & Tregoe, 1965)
To develop your statements of possible cause, applying your team’s accumulated
knowledge and experience, and reflecting on these distinctions and changes, ask
yourself the following questions:
• What about each distinction, or combination of distinctions might suggest
a possible cause?
• How could each change have cause this deviation?
• How could a change plus a distinction have caused this deviation?
• How could a combination of changes have caused this deviation?
Refine each statement of possible cause to be as specific as you can.
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Once you have exhausted your imagination creating and refining these
statements of possible cause, begin to evaluate each statement against the
problem specification.
Ask yourself for each statement, if the possible cause is the true cause of the
deviation, how does it explain both the IS and the IS NOT information? For the
possible cause to be the true cause, it must explain all of the IS and IS NOT
statements. List any assumptions you must confirm in order to make the possible
cause fit all of the IS and IS NOT statements.
Having created an explanation of how each possible cause might be the true
cause, it is time to select one as the “the most probable cause”.
Note the phrase “most probable”. This reflects the reality that we are suggesting
a true cause, as opposed to definitively stating a true cause. There is a bit of
leeway here that recognizes the imaginative conjecture that we are entertaining
as we move from the problem statement, a collection of facts, and the
statements of possible cause, that require assumptions, facts not yet in evidence,
and imagination.
We will test our assumptions to confirm the true cause, but testing costs time
and money. For now, we want to prioritize which possible cause to test first so
that we might arrive at the true cause most expeditiously.
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In determining which statement describes the most probable cause, ask yourself
which statement best explains both the IS and the IS NOT facts of the problem
statement, with the fewest assumptions.
For example, consider two points on a graph with a horizontal axis for cause, and
a vertical axis for effect. By definition, there is only one line that can pass
through two points on this graph, but there can exist any number of curved lines.
Which would we believe to describe the most probable relationship between
cause and effect represented by those two points? Logic would suggest that the
straight line is the most probable because there are no facts in evidence to
support a curved line, unless we make certain assumptions. The option with the
fewest assumptions, the straight line, is, therefore, the most probable cause.
Confirm that your most probable cause is the true cause by testing it. What can
be done to confirm your assumptions? How can you observe this possible cause
at work? How can you demonstrate the relationship between them?
Note the distinction between problem solving and decision making. The problem
is solved when you determine the most probable cause to be the true cause.
What you do with this information, in terms of eliminating or controlling the
cause, requires decision‐making. Albeit subtle, it is an important distinction.
Often the problem solving team only has the mandate to find the cause, but
neither the resources nor the authority to dictate changes to operational policy
or procedure to effect the necessary changes to eliminate or control the cause.
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Other Problem Solving Tools
Deming’s PDSA Cycle
Plan ‐ Includes recognizing that a problem exists and identifying objectives;
defining who will be investigating the problem and finding a solution, and how
their success will be measured; and developing the steps of the plan.
Do ‐ Putting the planned experiment into action.
Study – Evaluates the progress and success of the experiment, and areas for
further improvement.
Act ‐ Summarizes the learnings from the study of the implemented plan, from
which a new plan is to be developed.
Other Problem Solving Tools
The 5 Whys
When confronted with an issue, ask a “Why” question 5 times. It is generally
accepted that by the fifth time the question is asked, the root cause should be
revealed. Sometimes this works, and sometimes it doesn’t. Use the technique
when the consequence of being wrong is relatively low. The more expensive the
consequence, the more rigorous should be the problem‐solving methodology.
One drawback of the “5 Whys” method is that, for each why question, there may
be many possible causes. Without the ability to analyse the likelihood of each
cause (using distinctions and changes with the IS‐IS NOT grid), each cause would
need to be investigated. This is likened to a “Shot Gun Approach”. Spray the area
with activity and hope you get the true cause while implementing a number of
improvements.
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Improving the System
To be successful, a business or organization must balance the
needs of these different functional areas:
• Supply chain management
• Marketing
• Accounting
• Human resources
• Operations
• Engineering
• Strategy
Improving the System
A quality system uses the business model with a focus on the
customer, and includes the dynamics of:
• Continual improvement
• Change
• Planning
• Renewal
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A Quality System
Figure 10‐1
Ishikawa’s Basic Seven Tools of Quality (B7)
• Process maps
• Check sheets
• Histograms
• Scatter plots
• Control charts
• Cause and effect diagrams
• Pareto analysis
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Ishikawa’s Basic Seven Tools of Quality (B7)
Logical Map of the Order of the Basic Seven (B7) Tools
Figure 10‐2
Based on M. Brassard, The Memory Jogger II, published by GOAL/QPC, 2 Manor Parkway, Salem, New Hampshire,
2004. Reprinted with permission of GOAL/QPC.
Process Maps
• A picture of a process, or map of the process, as it exists
• The following set of symbols is used:
Figure 10‐3
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Simple Rules for Process Maps
• Use the simple symbols to chart the process from the
beginning, with all arcs in the process map leaving and
entering a symbol.
• The arcs represent the progression from one step to the next.
• Develop a general process map and then fill it out by
adding more detail, or a subflowchart, to each of the
elements.
• Step through the process by interviewing those who
perform it – as they do the work.
Simple Rules for Process Maps (cont’d)
• Determine which steps add value and which don’t in an
effort to simplify the work.
• Before simplifying the work, determine whether the work
really needs to be done in the first place.
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Home Occupation Process: Current
Figure 10‐4
Home Occupation Process: Proposed
Figure 10‐5
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Steps in Process Mapping
1. Settle on a standard set of process mapping symbols to be
used.
2. Clearly communicate the purpose of the process map to all the
individuals involved in the exercise.
3. Observe the work being performed by shadowing the workers
performing the work.
4. Develop a map of the process.
5. Review the process map with the employees to make needed
changes and adjustments to the process map.
6. Develop a map of the improved process.
SIPOC Diagram
A diagram that is useful when it is not clear who your
customers are, where specifications for inputs exist, and
when clarifying customer requirements.
• Supplier
• Inputs
• Process
• Outputs
• Customers
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Example 10‐1
• Problem: The well construction unit of a state department of
water resources entered into a multiyear project to update
its database management system. As part of the process, the
well construction staff was asked to document its current
process flows.
Example 10‐1
• Solution: The resulting process map is shown in Figure 10‐6.
Through a brainstorming process, the well construction team
was asked to rethink its processes to simplify the workflow
and to take advantage of new technology. The team worked
together to develop the new process, which resulted in a
streamlined flow that required less time for drillers to
receive permits.
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Example 10‐1
Process map with
responsibility of
existing process
Figure 10‐6
Example 10‐1
Process map with
responsibility of
existing process
(cont’d)
Figure 10‐6 cont.
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A Closer Look at Quality 10‐1
• Extended value stream mapping of supply chains
• Customers and suppliers can collaborate to improve supply chains.
• Global Corp metrics:
Global Corp.
Prior‐state
extended
value stream
map
Figure 10‐7A
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2017-05-14
Global Corp.
Ideal‐state
extended
value stream
map
Figure 10‐7B
Check Sheets
• Data‐gathering tools that can be used to provide data for
histograms
• Can be either tabular, computer‐based, or schematic
• Setting up a check sheet:
• Identify common defects occurring in the process.
• Draw a table with common defects in the left column and time period
across the tops of the columns to track the defects.
• The user of the check sheet then places check marks on the sheet
whenever the defect is encountered.
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Example 10‐2
• Problem: A copying company wants to set up a check sheet
so that it can keep track of error sources.
• Following are the major error types with frequencies:
Example 10‐2
• Solution: Figure 10‐8 shows
a check sheet for these data.
The check sheet will be kept
to monitor how well
workers are adhering to the
new procedures.
Figure 10‐8
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Histograms
• Graphical representations of data in bar format
• Used for continuous numerical data and to observe the
shape of the data
Rules for Developing Histograms
• The width of the histogram bars must be consistent.
• The classes must be mutually exclusive and all‐inclusive (or
collective exhaustive).
• A good rule of thumb for the number of classes is 2k > n.
• Where n is the number of raw data values and k is the number of
classes
• Solving for k, we obtain k > log n/log 2, therefore:
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Example 10‐3
• Problem: The Big City Cafeteria
wants to determine the distribution
of its sales during lunchtime. On a
given day, the manager randomly
selects 40 sales from the sales
register receipt. Develop a histogram
of the sales.
• The following table shows the sales
(in dollars).
Example 10‐3
• Solution: It is helpful to compute the mean, standard deviation,
maximum value, and minimum value when developing a
histogram because the histogram is often used to determine
whether the data are normally distributed.
• Following are these statistics from the previously given data:
• Mean = 4.20
• Maximum value = 8.95
• Minimum value = .790
• Difference = 8.16
• Sum = 168
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Example 10‐3
• k > log40/log 2
• k > 5.32
• The number of classes is 6,
therefore:
• Class width = 8.16/6 – 1.36 ~1.40
• Classes: 0.76‐2.15, 2.16‐3.55, 3.56‐
4.95, 4.96‐6.35, 6.36—7.75, 7.76‐
9.15
Figure 10‐9
Scatter Diagrams
• Charts used to examine the relationships between variables; also
called scatter plots.
• Sometimes used to identify indicator variables in organizations.
• Steps to set up a scatter plot:
1. Determine your x (independent) and y (dependent) variables.
2. Gather process data relating to the variables identified in Step 1.
3. Plot the data on a two‐dimensional plane.
4. Observe the plotted data to see whether there is a relationship
between the variables.
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Scatter Diagrams
Scatter plot of the relationship between conformance data and
prevention and appraisal quality‐related costs in a real firm
Figure 10‐10
Example 10‐4
• Problem: Healthy People, Inc., a company specializing in
home healthcare solutions for U.S. consumers, was a
growing company. The company wanted to study the
relationship between absenteeism and the number of
overtime hours worked by employees. Thirty employees
were randomly selected, and numbers of overtime hours
were graphed against numbers of days absent for the
previous year. (See Figure 10‐11.)
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Example 10‐4
Example 10‐4
Figure 10‐11
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Control Charts
Charts used to determine whether a process will produce a
product or service with consistent measurable properties
Figure 10‐12
Cause‐and‐Effect (Ishikawa Diagrams)
• A tool to help move to lower levels of abstraction in solving
problems
• Looks like the skeleton of a fish
• Problem = Head
• Ribs = Major causes
• Bones = Subcases
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Cause‐and‐Effect (Ishikawa Diagrams)
Steps to create a cause‐and‐effect diagram:
• State the problem clearly in the head of the fish.
• Draw the backbone and the ribs by asking participants to identify
major causes of the problems labeled in the head of the diagram.
• Continue to fill out the diagram asking “Why?” about each
problem or cause of a problem until the fish is filled out.
• View the diagram and identify core causes.
• Set goals to address the core causes.
Cause‐and‐Effect Diagram: Wobbling Saw
Blade
Figure 10‐13
Reprinted by permission from Patrick Shannon.
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2017-05-14
Example 10‐5
• Problem: A team of employees from the adjudication team
at a department of water resources was assigned to improve
its process. Adjudication is a process of going through the
courts to settle legal disputes, in this case, concerning water
rights. Prior to brainstorming improvements for the process,
the employees were asked to brainstorm some of the causes
of problems with the existing system.
• A fishbone (Ishikawa) diagram was used to help identify the
causes of the problems they were experiencing.
Example 10‐5
The fishbone
diagram shows
that three major
areas of concern
are contractors,
region office–
state office
communication,
and database
management.
Figure 10‐14
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Pareto Charts
• Charts used to identify and prioritize problems to be solved
• Aided by the 80/20 rule, which states that roughly 80% of
the problems are created by 20% of the causes – or there
are a “vital few” causes that create most of the problems
Pareto Charts
• Rules for constructing Pareto charts:
• Information must be selected based on types or classifications of
defects that occur as a result of a process.
• Data must be collected and classified into categories.
• A frequency chart must be constructed, showing the number of
occurrences in descending order.
• Steps in Pareto analysis:
1. Gather categorical data relating to quality problems.
2. Draw a frequency chart of the data.
3. Focus on the tallest bars in the frequency chart first when
solving the problem.
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Example 10‐6
• Problem: A copying company is concerned because it is
taking too long for operators to set up new printing jobs.
They decide to use Pareto analysis to find out why setup
times are taking so long.
• The data gathered reflect the following major causes:
Example 10‐6
• Solution: First, order the problems by frequency and
compute the percentage of problems related to each cause,
and then draw a frequency chart of the results.
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Example 10‐6
Pareto Chart
Figure 10‐15
Spider Charts
Graphs that present
multiple metrics
simultaneously in a
two‐dimensional plane
Figure 10‐26
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Balanced Scorecards
Spreadsheets that are communicated to management on a
regular basis – weekly, monthly, quarterly, and annually
Figure 10‐27
Dashboards
Tools that quickly
communicate
performance levels,
with a focus on easy,
clear communication
Figure 10‐28
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Product Quality
Here is a great tutorial on the subject:
http://www.webducate.net/qfd/qfd.html
Quality Function Deployment (QFD)
• A method for translating customer
requirements into functional design
• The process of translation is also
called the voice of the customer.
Figure 7‐3
Copyright © 2017 Pearson Education, Inc.
7‐158
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Quality Function Deployment
Step 1 – Develop a list of customer requirements.
Figure 7‐4
7‐159
Quality Function Deployment (cont’d)
Step 2 – Develop a list of
technical design elements along
the roof of the house.
Figure 7‐5
7‐160
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Step 3 – Demonstrate the relationships between the customer requirements and
technical design elements.
Figure 7‐6
7‐161
Step 4 – Identify the
correlations between design
elements in the roof of the
house.
Figure 7‐7
7‐162
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Step 5 – Perform a competitive
assessment of the customer
requirements.
Figure 7‐8
7‐163
Step 6 – Prioritize customer
requirements.
Figure 7‐9
7‐164
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Step 7 – Prioritize technical
requirements.
Figure 7‐10
7‐165
Step 8 – Perform a final
evaluation.
Figure 7‐11
7‐166
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The Houses of Quality
Figure 7‐12
7‐167
Works Cited (Blue Slides Only)
Evans, J.R. & Lindsay, W.M. (2015). An introduction to Six Sigma & process improvement (2nd ed.). Stamford, CT: Cengage Learning.
Gorard, S. (2004). Revisiting a 90‐year‐old debate: The advantages of the mean deviation. Education Online. Retrieved from

http://www.leeds.ac.uk/educol/documents/00003759.htm
Kepner, C.H. & Tregoe, B.B. (1965). The rational manager: A systemmatic approach to problem solving and decision‐making.

Princeton, NJ: Kepner‐Tregoe, Inc.
84
Module 3: What Is a Quality
Management System?
BUSD 2027
Quality Management
History and Evolution
Consider a medieval fruit stand:
Can
• Inspect colour
• Determine ripeness
• Inspect imperfections
• Random sample
• Taste
Cannot
• Determine
nutritional content
• Destroy product in
tests before sale
A means of quality control was needed.

Image: A fruit stand in Mauritius by Allan Brewer, available under a CC BY-2.0 licence at
https://commons.wikimedia.org/wiki/File:A_fruit_stand_in_Mauritius.jpg
Quality Control
• The quality of a finished product is inspected
before release
– Sampling plans
– Lot definitions
– Many inspection and testing methods
• Quality control is a misnomer

– No way to control quality at the inspection point
– Quality is “baked in” by this point
Quality Assurance
• Assuring the quality of the product by controlling the
manufacturing process from whence the product
emerges
– Process-required standards
– Quality raw materials
Quality Control
Quality
Assurance
Image: [Crowd of people] by Clker-Free-Vector-Images, CC0, Public domain, available at

https://pixabay.com/en/group-crowd-people-team-silhouette-309069/
Quality Management
• “A company-wide approach to quality, with
improvements undertaken on a continuous basis
by everyone in the organization.”
(Dale, Bamford, & Van Der Wiele, 2016, p. 21)
• Quality is
– A partnership with suppliers and customers
– Everyone’s job
– Planned and built into every process
– Routinely reviewed
ISO 9001:2015
Standard
The International Organization for Standardization (ISO)
9001:2015 catalogues all the processes of an enterprise,
laying out the requirements of a system for managing
those processes to maintain and improve quality.
8 Key Principles
1. Customer focus
2. Leadership
3. Involvement of people
4. Process approach
5. Systems approach to management
6. Continuous improvement
7. Evidence-based decision making
8. Relationship management
ISO 9001:2015
Standard
From Sales to Cash
To generate revenue and earn a profit, a company
must obtain and fulfill orders:
1. Create sales order
2. Create work order
3. Create pick list to instruct employees
4. Create packing slip and package products
5. Create shipping label and arrange for shipping
6. Invoice customer
7. Receive payment
ISO 9001:2015
Standard
From Requisition to Payment
Whether for-profit or not-for-profit, organizations need to
spend money to get supplies. Common steps in the
process include
1. Requisition
2. Create a purchase order
3. Acknowledgement
4. Pre-receiving
5. Receiving
6. Three-way match
7. Put-away
Image: X2 warehouse by CTsabre14, available under a CC BY-SA 3.0 licence at
https://commons.wikimedia.org/wiki/File:X2_warehouse.jpg
ISO 9001:2015
Standard
Transforming Raw Materials into Finished
Goods
• Processes must be defined and documented to enable
training and ensure consistency.
• There must be measurement processes and a way to
maintain the measuring devices.
• Equipment must be trackable in terms of maintenance
records, inspection reports, and so on.
• The consumption of labour and the consumption or
provision of materials should be trackable.
ISO 9001:2015
Standard
Supporting Operations
In addition to the processes focused directly or indirectly
on product and service provision, there are processes
focused on the organization itself:
• Strategic and operational planning
• Resource provision and allocation
• Marketing and customer feedback
• Research, design, and
development
• Performance evaluation and
continual improvement
Image: Mercedes Benz Research Development North America by Robert Basic, available under a CC BY-SA 2.0 licence at
https://commons.wikimedia.org/wiki/File:Mercedes_Benz_Research_Development_North_America_(13896003657).jpg
ISO 9001:2015
Standard
Supporting Operations (cont’d)
Strategic and Operational Planning
• The collection of choices that determine the nature and
the business of the organization.
• The process of strategic and operational planning
includes the following general steps
(Bodley-Scott, 2010):
1. Recording basic beliefs and values
2. Exploring risks and opportunities
• External influences
• Strengths and weaknesses of the
organization
Image: Strategic planning by BetterBizIdeas, available under a CC BY 2.0 licence
https://www.flickr.com/photos/37676753@N08/3779974515
ISO 9001:2015
Standard
Strategic and Operational Planning (cont’d)
3. Determining execution timeframe
4. Determining the strategy’s driving force
5. Choosing the scope of business activity
6. Determining the products, services, or markets with the greatest

potential
7. Determining the capabilities required to be successful
8. Defining the financial and non-financial goals for the strategy
9. Defining the required initiatives to build capability and achieve

goals
ISO 9001:2015
Standard
Resource Provision and Allocation
The organization will utilize resources in many forms
to achieve its goals, including:
• Human resources
• Financial and material resources
• Infrastructure and work environment
• Monitoring and measurement resources
• Corporate knowledge resources
ISO 9001:2015
Standard
Marketing and Customer Feedback
• Must be able to back up claims
• Supports organizational integrity and quality
Research, Design, and Development

• Innovation processes and learning should be recorded
Performance Evaluation and Continual

Improvement
• All business processes should be monitored and analyzed
for effectiveness
• Identifies opportunities for continual improvement
ISO 9001:2015
Elements
ISO 9001:2015 Elements
4 Context
5 Leadership
6 Planning
7 Support
8 Operation
9 Performance management
10 Improvement
ISO 9001:2015
Elements: Key Terms
Top Management
The senior leadership of the company, responsible
for setting strategy and representing the
organization to the public.
Organization
The collective body, including top management
and all of its employees, engaged in a common
purpose. An organization can be structured as
public, private, for-profit, or not-for-profit.
ISO 9001:2015
Elements: Key Terms
Business
Those activities that are core to the purposes of an
organization’s existence.
Interested Parties
Those parties, other than suppliers, customers, and
competitors, “that can have an effect or potential
effect on the organization’s ability to consistently
provide products and services that meet customer
and applicable statutory and regulatory
requirements” (ISO Copyright Office, 2015).
ISO 9001:2015
Elements: Key Terms
Requirements
The broad collective of needs and interests of customers,
interested parties, and regulatory bodies.
Products
Physical, tangible objects that can be shipped by the
organization and received by the customer.
Services
“The output of an organization with at least one activity
necessarily performed between the organization and the
customer, some portion of which is intangible” (ISO
Copyright Office, 2015).
ISO 9001:2015
Elements: Key Terms
Customer Property
Can include materials, components, tools and
equipment, premises, intellectual property, and
personal data.
Risks
“The (usually negative) effects of uncertainty that
come from a deficiency of information related to,
understanding, or knowledge of an event, its
consequence, or likelihood” (ISO Copyright Office,
2015).
ISO 9001:2015
Elements: Key Terms
Documented Information
Formerly “documents and records,” this is
the retained information (in any medium,
electronic or hard copy) that an
organization relies on for proof of
conformity with the Standard or storage of
the “recipe” for product and service
provision, or is the retained knowledge and
experience of the company.
ISO 9001:2015
Elements
Element 4: Context
Outlines the quality management requirements related to
the organization’s strategic planning activities. Annually,
an organization should
• Consider external and internal influences
• Consider interested parties relative to the organization
• Define the boundaries and applicability of the
organization’s QMS
• Confirm the requirements of the
Standard that are necessary
• Establish or review the QMS and
its processes
Image: [Diagram of PDCA cycle] by K. G. Bulsuk, available under a CC BY 4.0 licence at
https://commons.wikimedia.org/wiki/File:PDCA_Cycle.svg
ISO 9001:2015
Elements
Element 5: Leadership
• Top management is expected to operationally
support the QMS by
– Establishing a quality policy that supports the
strategic direction of the organization
– Ensuring that the policy is communicated and upheld
– Assigning specific responsibilities and authorities to a
QMS representative
– Ensuring integration of the policy into core business
processes
– Providing support resources
– Reviewing and revising the QMS as required
ISO 9001:2015
Elements
Element 5: Leadership (cont’d)
• The Standard also holds top management
accountable to a focus on customer service:
– Understanding customer requirements
– Understanding and meeting regulatory requirements
– Identifying and addressing risks to customer
satisfaction
– Maintaining employee focus on
customer satisfaction
– Measuring the level of customer
satisfaction and taking applicable
action
Image: [“Customer” magnifying glass] by geralt, CC0, Public domain, available at
https://pixabay.com/en/ball-about-customer-563973/
ISO 9001:2015
Elements
Element 6: Planning
• When addressing and planning for risks,
define
– What actions will be taken
– What resources will be required
– Who will be responsible for completing the
actions
– When they will be completed
– How their effectiveness will be measured
ISO 9001:2015
Elements
Element 6: Planning (cont’d)
• The plan objectives should be
– Measurable
– Relevant
– Monitored,
communicated, and
updated
– Saved as documented
information
Image: [Hand drawing flowchart] by geralt, CC0, Public domain, available at

https://pixabay.com/en/mark-marker-hand-leave-516277/
ISO 9001:2015
Elements
Element 7: Support
Garbage in, garbage out
• Resources of sufficient quantity and quality must

be available in order to produce quality products
and services
– Raw materials  finished goods
• Quality includes on-time delivery; resources are

finite
• The Standard addresses aspects of resource
provision that support this
ISO 9001:2015
Elements
Element 7: Support (cont’d)
Infrastructure and Work Environment
• Raw materials, work in process,
finished goods, equipment, and
people need to be protected and
preserved
– Infrastructure
– Physical environment
– Psychosocial environment
• Determining, providing, and
maintaining infrastructure and the
work environment supports
quality
Image: [Site-crane-pin] by Alexas_Fotos, CC0, Public domain, available at
https://pixabay.com/en/site-crane-pin-close-1507040/
ISO 9001:2015
Elements
Monitoring and Measurement Resources
• When monitoring and measuring are
used to verify the conformity of products
and services to requirements, the
organization will
– Provide the resources needed to ensure
valid and reliable results
– Ensure that the resources are suitable
– Maintain the resources
– Retain documented information (records)
Image: Sailors test Djibouti water quality by United States of America MC1 Eric Dietrich/U.S. Navy, Public domain, available at
https://commons.wikimedia.org/wiki/File:Sailors_test_Djibouti_water_quality_(11584994534).jpg
ISO 9001:2015
Elements
Monitoring and Measurement Resources
• Measurement equipment will be
– Calibrated, verified, or
both
– Identified to track its
status
– Safeguarded from
adjustments, damage,
or deterioration
Image: [Airman Derek Martin calibrates a pressure test gauge] by Airman Joan Kretschmer/US Navy, Public domain, available at
https://commons.wikimedia.org/wiki/File:US_Navy_040204-N-6278K-
001_Airman_Derek_Martin,_from_Southold,_N.Y.,_performs_a_calibration_procedure_on_a_pressure_test_gauge.jpg
ISO 9001:2015
Elements
Organizational Knowledge
• Determine the organizational knowledge
necessary for the operation of QMS
processes:
– Maintain organizational knowledge and experience
from
• Internal sources
• External sources
– Make it available, to the extent necessary
– Address changing needs and trends
ISO 9001:2015
Elements
People
• People are an organization’s most valuable asset,
but their abilities are finite.
• It is the organization’s
responsibility to provide
enough people to
– Implement the QMS
– Operate and control
QMS processes
Image: First Australian registered Boeing 787 in final assembly in Seattle by Jetstar Airways, available under a CC BY-SA 2.0 licence at
https://commons.wikimedia.org/wiki/File:Jetstar%27s_first_787_on_the_production_line_(9132370198).jpg
ISO 9001:2015
Elements

Competence
• People in the organization must be competent.
• It is the organization’s responsibility to
– Determine the necessary competence
– Provide a means of measuring competence
– Ensure that people are competent
– Take necessary actions to acquire competence.
ISO 9001:2015
Elements
Awareness
• Organizations need to ensure their employees
are aware of key information:
– The quality policy
– Relevant quality
objectives
– The value of their
contribution to the
QMS
Image: Employee Honor Award: Mark Guinn; NLA Refuges Complex by U.S. Fish and Wildlife Service, public domain, available
at https://commons.wikimedia.org/wiki/File:Employee_Honor_Award_Mark_Guinn;_NLA_Refuges_Complex_(5726626896).jpg
ISO 9001:2015
Elements
Documented Information
• To the extent necessary, the organization must maintain
and retain documented information.
• The Standard suggests the following elements:
– Physical leadership – Customer property
– Monitoring and measurement – Managing change
– Competence – Release
– Document control – Control of nonconformance
– Operations – Performance evaluation
– Design and development
– Product and service provision
ISO 9001:2015
Elements
Element 8: Operations
Operational Planning and Control
• Quality = 80% communication + 20% planning
• Each process must include a method for operational
planning to ensure that resources, equipment, and
personnel are prepared to deliver quality:
– Planning, implementing, and controlling the processes
needed
– Developing a plan
– Making changes to a plan
ISO 9001:2015
Elements
Element 8: Operations (cont’d)
Requirements for Products and Services
• The organization must determine
and manage the customer’s
expectations, including
– Customer communication
– Determining requirements for
products and services
– Reviewing requirements
– Documenting information about
requirements
– Making changes to requirements
Image: Customer profile dimensions by fogfish, available under a CC BY-SA 2.0 licence at
https://www.flickr.com/photos/fogfish/4404316225
ISO 9001:2015
Elements
Design and Development of Products and
Services
• Quality must be considered in making decisions
with regard to
– General items
– Planning
– Design and development inputs
– Design and development controls
– Design and development outputs
– Design and development changes
ISO 9001:2015
Elements
Control of Externally Provided Processes,
Products, and Services
• Suppliers are partners, and are considered
part of the QMS with regard to
– Conformity to requirements
– Controls and evaluation carried out
– Monitoring, evaluating, and re-evaluating
performance
ISO 9001:2015
Elements
Production and Service Provision
• Managing the quality of the processes, including
– Control of production and service provision
– Identification and traceability
– Property belonging to customers
and suppliers
– Preservation
– Post-delivery activities
– Control of changes
Image: EAN-13 barcode of ISBN-13 by ISBN, Public domain, available at

https://commons.wikimedia.org/wiki/File:EAN-13-ISBN-13.svg
ISO 9001:2015
Elements
Release of Products and Services
• The organization will want to control all aspects of
product and service release, including
– Planning at appropriate stages to
verify that requirements are met
– Preventing the release of products
and services until planned release
activities have been completed
– Retaining documented
information on the release
Image: ASDA Mercedes-Benz Sprinter delivery van by Unisouth, available under a CC BY-SA 3.0 licence at
https://commons.wikimedia.org/wiki/File:An_ASDA_Mercedes_Benz_Sprinter_delivery_van.jpg
ISO 9001:2015
Elements
Control of Non-Conforming Output
• Sometimes products or services do not meet customer
requirements. The organization will want to address
whether the issue occurred before or after delivery:
– During production or delivery: Ensure outputs that do
not conform are identified or controlled
– After delivery: Take appropriate action based on the
nature of the nonconformity
• Correction, segregation, containment, return, informing the
customer, obtaining authorization for acceptance of products
and services as-is
ISO 9001:2015
Elements
Element 9: Performance Evaluation
Monitoring, Measurement, Analysis, and
Evaluation
• Monitoring and measurement has been a part of
quality since the beginning and includes
– Determining what needs to be measured and/or
monitored
– Determining methods (type, timing, frequency)
– Evaluating performance
– Evaluating processes
– Employing consistency
– Proposing changes
ISO 9001:2015
Elements
Element 9: Performance Evaluation (cont’d)
Internal Audit
• Internal audits are conducted at planned intervals to
– Determine conformity to the QMS
– Determine conformity to ISO 9001
• For each audit, the organization

– Establishes criteria and scope
– Ensures objectivity and
impartiality
– Reports the results to relevant
management
Image: [Audit] by Nick Youngson, available under a CC BY-SA 3.0 licence at

http://www.creative-commons-images.com/handwriting/a/audit.html
ISO 9001:2015
Elements
Element 9: Performance Evaluation (cont’d)
Management Review
• Helps the organization remain aware of its managerial
effectiveness through reviewing
– Status of actions from previous reviews
– Changes in external and internal issues, risks, and
opportunities
– Information on the performance and effectiveness
of the QMS
– Resource adequacy
– Opportunities for improvement
– Root cause(s) of nonconformity
ISO 9001:2015
Elements
Element 10: Improvement
Quality Management is not stagnant
• Continuous risk assessment
• Correction
• Re-organization
• Non-conformity reaction and control
• QMS management
• Documentation retention
Works Cited
Bodley-Scott, S. (2010). Strategic thinking in a post-
recessionary world [Webcast]. Retrieved from
http://www.kepner-tregoe.com/knowledge-
center/webcasts/strategic-thinking-in-a-post-
recessionary-world/
Dale, B. G., Bamford, D., & Van Der Wiele, T. (2016).

Managing quality: An essential guide and resource
gateway (6th ed.). Hoboken, NJ: John Wiley & Sons.
International Organization for Standardization. (2015).

ISO 9000:2015: Quality management systems—
Fundamentals and vocabulary (4th ed.). Geneva,
Switzerland: ISO Copyright Office.
Module 4: Implementation
of Quality Management
BUSD 2027
Quality Management
Introduction
To implement quality management means to impact
all the people of an organization and all the supplier
relationships upon which that organization relies.
What’s Key?
• Top management endorsement, direction, and support
• Employee involvement
• Supplier involvement
There is no magic!
Implementing quality management starts with
articulating the quality management “system.”
Step 1: Map Processes
Relative to ISO Requirements
• Top management will need to see what the

results of implementation will look like and
what the risks are.
• Step 1 is to create the following documents:

– Project charter
– Sequence and interaction
diagram
Image: [Documents icon] by Jatkins, public domain, available at

https://commons.wikimedia.org/wiki/File:Documents_icon.svg
Step 1: Mapping
Project Charter
A project charter is a document that includes the
following components:
• Project title • Stakeholders
• Brief background • Project milestones
• Objective • Start and end dates
• Constraints and boundaries • Costs
• Risks and opportunities • Approvals
• Leader • Sequence and
• Project team members interaction diagram
• Sponsor
Step 1: Mapping
Project Charter
Project Title
• Straightforward
• Easy to articulate
• Informative
• Recognize that the project will be around for a few
years
Brief Background
• Puts the project into context
• Short narrative that supports the detail described later
in the document
Step 1: Mapping
Project Charter
Objective
• What does success look like?
• What are the results?
• What impact will they have on the organization?
Constraints and Boundaries

• State the limits of the project’s scope
• Include any assumptions
Step 1: Mapping
Project Charter
Risks and Opportunities
• Include both internal and external influencing factors
• List potential impact (severity) and likelihood
(probability)
• Include mitigating strategies
Leader
• The go-to person who is the face of the project for top
management
• Sometimes top management will assign a leader upon
project approval
Step 1: Mapping
Project Charter
Project Team Members
• Who should be directly involved from the organization?
• Who are the key players?
• Ensure representation across departments
Sponsor
• A member of top management who is a resource to
the team
• Role is to ensure that the project has access to a
decision maker
Step 1: Mapping
Project Charter
Stakeholders
• Include association representatives and members
of board of directors, unions, etc.
• List the names of stakeholders
Project Milestones + Start and End Dates

• A high-level indication of the timeline of the
project
• Not a comprehensive work breakdown structure
Step 1: Mapping
Project Charter
Costs
• All the resources needed to complete the
project
• Can be divided into internal and external
costs
• Should also include “opportunity costs”
Step 1: Mapping
Project Charter
Approvals
• Who is accountable for QM activities
• Who needs to “sign off” on things
• Include a signature block
Sequence and Interaction Diagram

• Shows top management how the processes of the
system work together to manage quality
• Is a requirement of ISO 9001
Step 1: Mapping
Project Charter
Sequence and Interaction
Diagram (cont’d)
Image: Entity-Relationship diagram by Pável Calado, available under a CC BY 2.5 licence at

http://www.texample.net/tikz/examples/entity-relationship-diagram/
Step 2: Create the
Implementation Plan
• The implementation plan is the project plan for an
implementation project.
• It outlines the process for executing, monitoring, and
controlling the project, and includes such considerations as
the following:
– Schedule Management Plan
– Quality Management Plan
– HR Management Plan
– Procurement and Cost Management Plans
– Project Review and Risk Management Plans
– Change Management Plan
– Communication Plan

Step 2: Create the
Implementation Plan
Create the Plan
Schedule Management Plan
• Conversion of the project timeline from the charter into
a detailed schedule.
• The plan is often displayed as a Gantt chart or work
breakdown structure.
• Each sequential step is
assigned a resource and
a duration from the
start of the project until
the project ends.
Image: Gantt Chart by AnnaKorlyakova, available under a CC BY-SA 4.0 licence at

https://commons.wikimedia.org/wiki/File:ConceptDraw_Project_Gantt_Chart.png
Step 2: Create the
Implementation Plan
Create the Plan (cont’d)
Quality Management Plan
• Implementation plans are a process, so need quality
management.
– How will the timeline be
monitored?
– How will the budget be
monitored?
– How will complaints,
enquiries, and feedback
be managed?
Image: [Diagram of PDCA cycle] by K. G. Bulsuk, available under a CC BY 4.0 licence at

https://commons.wikimedia.org/wiki/File:PDCA_Cycle.svg
Step 2: Create the
Implementation Plan
Human Resource Management Plan
• Obtaining and training people can be a part of the
project.
• The plan should include
– Competency and
certification tracking
– How to recruit
– How to hire
– How to onboard
Image: [Hiring] by Tumisu, available under a CC0 licence, Public domain, at

https://pixabay.com/en/hiring-recruitment-job-hire-1977803/
Step 2: Create the
Implementation Plan

Procurement and Cost Management Plans
• Procurement management: How money allocated
to the project is spent on the assets under the
control of the project
• Processes for the plan include
– Requisitioning
– Approval
– Procurement
Step 2: Create the
Implementation Plan
Project Review and Risk Management
Plans
• Project review meeting
schedule
– Review each of the plans
– Identify whether the project
is on track
– Identify any issues or risks
• How risks will be addressed

and reviewed
Image: Figure 1: Five Basic Guiding Principles of Risk Management by U.S. Government Accountability Office, Public domain,
available at https://www.flickr.com/photos/usgao/9689558388
Step 2: Create the
Implementation Plan
Create the Plan
(cont’d)
Change Management
Plan
• How are changes approved,
implemented, and verified?
• How is scope creep
prevented and addressed?
• How is aversion to change
managed?
Image: [Consensus plan] by Kim Bruning, available under a CC BY-SA 3.0 licence at
https://en.wikipedia.org/wiki/File:Consensus_plain_2.svg
Step 2: Create the
Implementation Plan
Communication Plan
• The goal is to ensure that the organization remains
engaged in the project.
• The plan should include
– Regular communication of developments
– Who receives communications
– Type, content, format, medium, and frequency of
communication
– Who supplies the content
– Who manages the plan
Step 2: Create the
Implementation Plan
Pull the Plan Together
• Not all of the abovementioned plans need to be
included in the implementation plan.
• Work with the project manager, sponsor, and team
to decide which plans you want to include.
Prioritize the Work

• It can be risky to implement all the QMS
processes at once.
• Consultation with top management to prioritize
is key.
Step 3: Improve the
Process and Culture
• There are two important objectives at
this stage:
1. Change the process
2. Change the culture of the organization to
accept the new process
• Changes that occur from

within are the most likely
to stick.

Step 3: Improve the
Process and Culture
Create a Process Action Team
• The quality of a process is controlled 100% by
the employees who work in it. It is critical that
they are a part of improving it,
• A PAT should include

− Five to seven employees
− Cross-shift and-cross department representation
− One internal customer
− One internal supplier
− A outside, objective facilitator
Step 3: Improve the
Process and Culture
Document the Current State
• Use the PAT to create a process map (e.g., a swimlane
diagram) of the current state of the process
• Define the individual

procedures that make up
the process.
• Include details about

– The flow of information
– Material inputs and outputs
– Who is involved in each step
Image: Approvals by Paul Kerr, CC0, Public domain, available at

https://commons.wikimedia.org/wiki/File:Approvals.svg
Step 3: Improve the
Process and Culture
Identify Current Issues

• Ask the PAT to talk about the current
performance of the process:
− What is working and what is not working?
− What bother members of the PAT?
− What kinds of communication problems exist?
− What audit findings or customer complaints
have been received in the past?
Step 3: Improve the
Process and Culture
Recommend Improvements
• Attempt to find solutions for the issues while
maintaining or improving those parts of the process
that are working well.
• Review the Standard for the process and verify which
requirements are being met.
• Resolve duplication of effort where possible
• Refine the process map, integrating suggestions for
improvement
− Where possible, test improvements on a small scale
− Consider the practical applications
Step 3: Improve the
Process and Culture
Document the Future State
• Create a process document that captures the details of
each procedure. (Note: Precise, step-by-step directions
can be left to work instructions.)
• The process document should include the following
sections:
− Purpose
− Scope
− Roles and responsibilities
− Materials and equipment required
− Documentation that is referenced
− A section for each procedure in the process (including planning
and retention documents)
Step 3: Improve the
Process and Culture
Document the Future State (cont’d)
• Next, create the work instructions as required to
support the process document:
− Specific instructions for key points in the process
− Written in great detail and often include photos and
diagrams
− Typically followed by one employee to complete one step in
a procedure
• Once the process is documented comprehensively,

review it as a group to confirm how it fits into the
organization’s culture and ensure it meets the
Standard.
Step 3: Improve the
Process and Culture
Present the Findings
• To understand the importance of presenting these finds to
top management, one must reflect on the governance
model for quality management:
Organizational Construct 1
– There is a hierarchical relationship between all employees in the
organization (i.e. A reports to B)
– This is responsible for workplace culture and confirming
competency and engagement
– There is a transformation of process inputs into outputs through a
series of cascading “customer-supplier” relationships between
employees in different functional groups
Step 3: Improve the
Process and Culture
Present the Findings (cont’d)
– The PAT creates or improves a process but does not have the
authority to implement recommendations
– Top management must approve the recommendations, hence the
presentation
• The presentation should include the following:

– Agenda – The new process
– Purpose and scope of the process – Recommendations
– Definitions and key terms – Next steps
– Requirements of the Standard that apply
– Why the process is important
– Benefits to the organization of implementing
the recommendations
Step 4: Train
Prepare the Organization to Succeed

• After top management approval, it is time
to implement the recommendations.
• Finish up any other projects first, as

required.
• Find a suitable launch time.

Step 4: Train
Provide Detailed Training
Training involves six key steps:
1. Assess the level of experience of the personnel to be trained
and adjust the detail of training accordingly.
2. Review the process document, work instructions, and other
reference material.
3. Demonstrate the process, procedures, and work
instructions.
4. Have the employee work through the process with the
instructor there.
5. Have the employee “fly solo.”
6. Record the results of the “solo flight.”
Step 4: Train
Provide Awareness as Required

• Employees involved in a process should be
given detailed training.
• Everyone else in the organization should
receive awareness of the process.
• This helps everyone to be proactive in doing
what’s necessary to make the process a
success.
Step 5: Go Live
Communicate the Starting Date +

Ready, Set, Go!
• Inform everyone in advance of the launch of the
new process.
• In preparation for the launch, the PAT should
make a risk assessment:
1. What could go wrong on launch day?
2. What contingency actions should be contemplated?
3. Should those contingency actions be incorporated
into the launch plan or await a trigger?
Step 6: Follow Up
Within the First Three Weeks
• Are the results within specification?
• Are employees following the process as written?
– If the process is being followed but there are unacceptable
results, determine the root cause, modify, and update training.
– If the process is not being followed, determine the root cause.
Within the First Year

• Conduct a formal audit.
• Undertake any corrective actions required as a result of
the audit.
Works Cited
Hartz, M., & Crosier, T. (1992). Process action team
handbook. Rome, NY: Reliability Analysis Center,
U.S. Department of Defense.

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BUSD 2027: Quality Management

Image: Boundless. (2016). The gap model [Digital Graphic]. Retrieved from https://www.boundless.com/marketing/textbooks/boundless‐marketing‐textbook/services‐marketing‐6/service‐quality‐51/the‐gap‐model‐254‐4140/. Used under CC BY‐SA 4.0.

Copyright © 2017 Pearson Education, Inc. Table 2‐1 2‐29

Fewer Better Use Capture

BUSD 2027: Quality Management

Mode – The value which occurs most frequently

cumulative percent – the

Overlapping normal distributions. Linacre JM. … Rasch

3. Frequency of Sampling – There is a trade‐off between cost and information.

4. Location of Control Limits – Need to avoid incorrectly believing a special cause

Copyright ©2016 Pearson Education, Inc. All rights reserved. 1-45

• If sample sizes are equal, either the p or np chart can be

The research and conclusions compiled by Kepner and Tregoe resulted in a

What’s going on? Clarification Situation appraisal

Why did this happen? Cause and effect Problem solving

What course of action should

Potential problem (opportunity)

What is the object?

Where is the defect on the object?

When is the deviation first observed in clock and calendar time?

How many objects have the defect?

Gorard, S. (2004). Revisiting a 90‐year‐old debate: The advantages of the mean deviation. Education Online. Retrieved from

Kepner, C.H. & Tregoe, B.B. (1965). The rational manager: A systemmatic approach to problem solving and decision‐making.

A means of quality control was needed.

• Quality control is a misnomer

Image: [Crowd of people] by Clker-Free-Vector-Images, CC0, Public domain, available at

4. Determining the strategy’s driving force

5. Choosing the scope of business activity

6. Determining the products, services, or markets with the greatest

7. Determining the capabilities required to be successful

8. Defining the financial and non-financial goals for the strategy

9. Defining the required initiatives to build capability and achieve

Research, Design, and Development

Performance Evaluation and Continual

Image: [Hand drawing flowchart] by geralt, CC0, Public domain, available at

• Resources of sufficient quantity and quality must

• Quality includes on-time delivery; resources are

Element 7: Support (cont’d)

Image: EAN-13 barcode of ISBN-13 by ISBN, Public domain, available at

• For each audit, the organization

Image: [Audit] by Nick Youngson, available under a CC BY-SA 3.0 licence at

Dale, B. G., Bamford, D., & Van Der Wiele, T. (2016).

International Organization for Standardization. (2015).

• Top management will need to see what the

• Step 1 is to create the following documents:

Image: [Documents icon] by Jatkins, public domain, available at

Constraints and Boundaries

Project Milestones + Start and End Dates

Sequence and Interaction Diagram

Image: Entity-Relationship diagram by Pável Calado, available under a CC BY 2.5 licence at

Image: [Documents icon] by Jatkins, public domain, available at

Image: Gantt Chart by AnnaKorlyakova, available under a CC BY-SA 4.0 licence at

Image: [Diagram of PDCA cycle] by K. G. Bulsuk, available under a CC BY 4.0 licence at

Image: [Hiring] by Tumisu, available under a CC0 licence, Public domain, at

Create the Plan (cont’d)

• How risks will be addressed

Prioritize the Work

• Changes that occur from

Image: [Documents icon] by Jatkins, public domain, available at

• A PAT should include

• Define the individual

• Include details about

Image: Approvals by Paul Kerr, CC0, Public domain, available at