BUSI70228

Operations
Jiankun Sun

Session 8
Quality Management
Outline
- Total Quality Management (TQM)

- Statistical Process Control

• Capability analysis
• Conformance analysis

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What Does Quality Mean?
- Quality: meet the needs and expectations of customers

- Quality is associated with costs.

• Prevention costs, appraisal costs, internal failure costs, external failure
costs, …

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Total Quality Management
- Total Quality Management (TQM): a philosophy that stresses
three principles for achieving high levels of quality

Customer Employee Continuous

Satisfaction Involvement Improvement

• Conformance, • Employee • Plan-do-study-act

value, fitness for empowerment cycle
use, support, … • Quality at source

“Quality is everyone's responsibility.” - W. Edwards Deming

“Quality is doing the right thing when no one is looking.” - Henry Ford

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Example: TQM in the IT industry
- Quality problems in the IT industry
• Bugs, crashes, security issues, etc., of a software/website/app

- Quality management measures:

• Quality assurance: a set of standards and
procedures to ensure software quality
• Unit testing: write test cases first even
before developing the software
• Continuous integration: developers integrate
code into a shared repository frequently.

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Seat Problem at Toyota Motor Manufacturing (TMM)
- What would you recommend to solve the seat problem at TMM?

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Causes of Quality Problems
- Variation is the root cause of all quality problems.

- Common causes
• Purely random, unidentifiable sources of variation
• Unavoidable with the current process
• Example: random variation in temperature

- Assignable causes
• Can be treated to a specific reason
• Can be identified or eliminated
• Example: wrong setup of machines

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Statistical Process Control

- Statistical process control: use statistical methods to measure,

monitor, and control a process

Capability Conformance
analysis analysis

Eliminating Investigating for

assignable cause assignable cause

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Capability Analysis and Conformance Analysis

Capability analysis: Conformance analysis:

How much variation is Is the process output
there in the process? consistently off-target?

Process average OK: Process variability OK:

too much variation off target
xxx
x x
x x xx
x x x
x
x
x x

x x
Process on target
with low variability

Reduce Center
spread Process
x
xxxxx
xxx

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Example: Xootr Scooter
- Consider the production of the steer support for Xcootr scooters. According
to the product design, the ideal steer support would measure 80.000 mm.

- Design specifies the height must be between 79.950 mm and 80.050 mm.
• If the height < 79.950 mm, the part may rattle excessively because it fits loosely.
• If the height > 80.050 mm, the part may not fit in the available gap in the assembly.

Upper specification limit (USL) = 80.050 mm

Lower specification limit (LSL) = 79.950 mm

- Xootr engineers estimate a standard deviation

of 0.0185 mm for the steer support height by Height
measuring a sample of components every day
• Caused by raw materials, room temperature, how
the component is placed in the machine, etc.

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Process Capability
- Process capability: the ability of a process to meet the design
specifications (i.e., USL and LSL) for a service or product

- Which process is more “capable”?

Target Target
value Distribution of value Distribution of
process outputs process outputs

LSL USL LSL USL

79.95 80.00 80.05 mm 79.95 80.00 80.05 mm

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Measure of Process Capability
- Process capability index Cp:
x
USL LSL x x
x
Cp = x
x x
?
6 x x

• USL/LSL: upper/lower specification limits

§ Set by customer requirements or product design
• 𝜎: standard deviation of process output
§ Often estimated by the standard deviation of a sample of output

- Cp measures the actual process variation relative to tolerance

width (USL-LSL).
• Higher Cp indicates less process variation (𝜎) and better quality.

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Xootr Scooter: Process Capability Index
- USL = 80.050 mm
- LSL = 79.950 mm
- Standard deviation 𝜎 = 0.0185 mm

- Process capability index

Cp = (80.050 – 79.950) / (6×0.0185) = 0.9009
• Need improvement if we aim at a three-sigma process (Cp = 1).

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Comparison of Different Process Capabilities
𝜎1 > 𝜎2 > 𝜎3

LSL USL LSL USL LSL USL

3𝜎1 3𝜎1 4𝜎2 4𝜎2 6𝜎3 6𝜎3

3-sigma process 4-sigma process 6-sigma process

Cp = 1 Cp = 1.33 Cp = 2

Defect rate Defect rate Defect rate

= 0.3% = 0.006% = 2 every billion

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Six Sigma
- Six-sigma process: a process that has six standard deviations
between the process mean and the nearest specification limit
• For a six-sigma process, Cp = 2

- Why six-sigma process? 6𝜎

• Only 2 defects per billion units

• Robust to mean shift
• Robust to cumulative processing steps
LSL μ USL

- Six Sigma is a disciplined, statistical-based, data-driven approach

and continuous improvement methodology for eliminating defects
in a product, process or service.

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Example: Xootr Scooter
- Remember that the ideal steer support would measure 80.000 mm, and the
standard deviation of the process is 0.0185 mm.
• We expect the mean of process output to be 80.000 mm.
- Xootr engineers collect a sample of five components with the following
measures: (80.023, 80.036, 79.992, 80.028, 80.029) mm.
80.023+80.036+79.992+80.028+80.029
• Sample mean = = 80.022 mm.
5
- Is the observed variation normal (or is there a mean shift)?
Target value
?
LSL USL x xx
x
x x xx
x
?

79.95 80.00 80.05 mm

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Control Chart
- Control chart: A time-oriented diagram that is used to determine
whether observed variations are abnormal
• Example: x-bar chart

A sample Observation Variation due to

mean out of control assignable causes
UCL
Sample mean

Center Variation due to

Line common causes

LCL
Sample Number Variation due to
assignable causes

- How to determine upper control limit (UCL) and lower control

limit (LCL)?

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Control Limits in X-bar Charts
- Upper/Lower control limits
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UCL = X + z p , LCL = X zp .
n n

" center line (CL), average of past sample means or a target value of process output
• 𝑋:
• 𝜎: standard deviation of process output
• 𝑛: sample size
• 𝑧: number of std. dev. from average (typically 𝑧 = 3, i.e., 3-sigma control limits)

A sample Observation Variation due to

mean out of control assignable causes
UCL
Sample mean

Center Variation due to

Line common causes

LCL
Sample Number Variation due to
assignable causes

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Xootr Scooter: Control Limits
- Sample mean 𝑋" approximately follows a normal distribution
• Mean of 𝑋" = 80.000 mm
• Std. dev. of 𝑋" = 𝜎/ 𝑛 = 0.0185/ 5 = 0.0083 mm
- Control limits
• Center line = 80.000 mm (target value)
• UCL = 80.000 + 3×0.0083 = 80.025 mm
• LCL = 80.000 - 3×0.0083 = 79.075 mm

- Since our sample mean 80.022 mm falls within the control limits.
we do not have significant evidence that the process is out of
control (has mean shift).
• Maybe collect more samples

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Patterns in Control Charts May Tell You More
Pattern Description Possible Causes

Normal Random variation

Assignable causes
Lack of
(e.g., tool, material,
stability
operator, over control)

Cumulative
Tool wear
trend

Different work shifts,

Cyclical voltage fluctuations,
seasonal effects, etc.

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Summary
- Total Quality Management

- Capability analysis: What is the process capability?

• Process capability index

- Conformance analysis: Is the process in control?

• Control chart and control limits

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Appendix: Distribution of Sample Means
- Assuming Xootr’s process is running normally.
• Mean and std. dev. of the output height: 𝜇 = 80.000 mm, 𝜎 = 0.0185 mm.
- What about the mean of a sample of n = 5 units?
Sample (Central Limit Theorem)
The sample we observe
Mean 𝑿
Distribution of
Sample 1 80.023, 80.036, 79.992, 80.028, 80.029 80.022 Sample Mean 𝑿
𝝈𝟐
Sample 2 79.991, 80.011, 80.037, 79.990, 80.006 80.007 𝑿~𝑵(𝝁, )
𝒏

Sample 3 79.970, 80.011, 79.987, 79.985, 79.984 79.987

Sample 4 80.010, 79.991, 80.053, 80.001, 80.006 80.012

80.000 80.022

𝜇! = 𝜇 = 80.000
Sample 5 79.997, 79.983, 79.982, 80.013, 80.004 79.996
𝜎 0.0185
… … … … 𝜎! = = = 0.0083
𝑛 5
𝑿 is a random
variable!

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