Control Charts

for Attributes
p-chart: A chart used for controlling
the proportion of defective services or
products generated by the process.

p = p(1 p)/n
Where
n = sample size
p = central line on the chart, which can be either the historical
average population proportion defective or a target value.

Control limits are: UCLp = p+zp and LCLp = pzp

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

 Hometown Bank
Example
The operations manager of the booking services department of Hometown Bank
is concerned about the number of wrong customer account numbers recorded by
Hometown personnel.
Each week a random sample of 2,500 deposits is taken, and the number of
incorrect account numbers is recorded. The results for the past 12 weeks are
shown in the following table.

Is the booking process out of statistical control? Use three-sigma control limits.
 Hometown Bank
Using a p-Chart to monitor a process
n = 2500 Sample Wrong Proportion
147 Number Account # Defective
p= = 0.0049
12(2500) 1 15 0.006
2 12 0.0048
p = p(1 p)/n 3 19 0.0076
4 2 0.0008
p = 0.0049(1 0.0049)/2500 5 19 0.0076
6 4 0.0016
7 24 0.0096
p = 0.0014
8 7 0.0028
UCLp = 0.0049 + 3(0.0014) 9 10 0.004
10 17 0.0068
= 0.0091 11 15 0.006
LCLp = 0.0049 3(0.0014)
12 3 0.0012
= 0.0007
Total 147
 Hometown Bank
Using a p-Chart to monitor a process

Example
In class Problem
 Control Charts
Two types of error are possible with
control charts
A type I error occurs when a process
is thought to be out of control when
in fact it is not
A type II error occurs when a process
is thought to be in control when it is
actually out of statistical control
These errors can be controlled by the
choice of control limits
 Process Capability

Process capability is the ability

of the process to meet the design
specifications for a service or
product.
Nominal value is a target for
design specifications.
Tolerance is an allowance above
or below the nominal value.
 Process Capability

Nominal
value

Process distribution
Lower Upper
specification specification

20 25 30

Process is capable
 Process Capability

Nominal
value

Process distribution
Lower Upper
specification specification

20 25 30

Process is not capable

 Process Capability Ratio, Cp

Process capability ratio, Cp, is the tolerance width divided by 6

standard deviations (process variability).

Upper specification - Lower specification

Cp =
6
 Process Capability Index, Cpk

Process Capability Index, Cpk, is an index that measures

the potential for a process to generate defective
outputs relative to either upper or lower specifications.

x= Lower specification Upper specification = x

Cpk = Minimum of ,
3 3

We take the minimum of the two ratios because it gives

the worst-case situation.
 Intensive Care Lab
Example
The intensive care unit lab process has an average
turnaround time of 26.2 minutes and a standard
deviation of 1.35 minutes.
The nominal value for this service is 25 minutes with an
upper specification limit of 30 minutes and a lower
specification limit of 20 minutes.
The administrator of the lab wants to have three-sigma
performance for her lab. Is the lab process capable of
this level of performance?
Upper specification = 30 minutes
Lower specification = 20 minutes
Average service = 26.2 minutes
= 1.35 minutes
 Intensive Care Lab
Assessing Process Capability
Example Upper specification = 30
minutes
Lower specification = 20
minutes
Average service = 26.2
x =Lower specification
minutes Upper specification = x
Cpk = Minimum of = 1.35 ,
minutes
3 3

26.2 20.0 30.0 26.2

Cpk = Minimum of
3(1.35) , 3(1.35)

Process
Cpk = Minimum of 1.53, 0.94 = 0.94 Capabilit
y Index
 Intensive Care Lab
Assessing Process Capability
Example
Upper specification - Lower specification
Cp =
6
30 - 20
Cp = = 1.23 Process Capability Ratio
6(1.35)

Does not meet 3 (1.00 Cpk) target due to a shift in mean

(Note variability is ok since Cp is over 1.0)

Before Process Modification

Upper specification = 30.0 minutes Lower specification = 20.0 minutes
Average service = 26.2 minutes
= 1.35 minutes Cpk = 0.94 Cp = 1.23
In Class Problem
In Class Problem
 Effects of Reducing
Variability on Process Capability
Nominal value
Six sigma

Four sigma

Two sigma

Lower Upper
specification specification

Mean
What it means to operate at 6-
sigma
Expected frequency Approx. frequency for
Range Population in range
outside range daily event

1 0.682689492137 1 in 3 Twice a week

2 0.954499736104 1 in 22 Every three weeks

3 0.997300203937 1 in 370 Yearly

Every 43 years (twice

4 0.999936657516 1 in 15,787
in a lifetime)

Every 5,000 years

5 0.999999426697 1 in 1,744,278
(once in history)

6 0.999999998027 1 in 506,842,372 Every 1.5 million years

 Six Sigma
3.4 defects per million
Cpk = 2
Impact of number of parts or
production steps on yield:
6 sigma 4 sigma 3 sigma
1 100% 99% 99%
5 100% 97% 71%
10 100% 94% 50%
100 99.97% 54% 0%
 Designing in 6-sigma

Reduce the number of parts in a product

Reduce the number of steps in a process
 Six Sigma

Six Sigma is a comprehensive and flexible

system for achieving, sustaining, and
maximizing business success by minimizing
defects and variability in processes.
It relies heavily on the principles and tools of
TQM.
It is driven by a close understanding of
customer needs; the disciplined use of facts,
data, and statistical analysis; and diligent
attention to managing, improving, and
reinventing business processes.
 Six Sigma
Improvement Model
1. Define Determine the current process
characteristics critical to customer
satisfaction and identify any gaps.
2. Measure Quantify the work the
process does that affects the gap.
3. Analyze Use data on measures to
perform process analysis.
4. Improve Modify or redesign existing
methods to meet the new
performance objectives.
5. Control Monitor the process to make
sure high performance levels are
maintained.
 Six Sigma
Implementation
Top Down Commitment from corporate
leaders.
Measurement Systems to Track
Progress
Tough Goal Setting through
benchmarking best-in-class companies.
Education: Employees must be trained
in the whys and how-tos of quality.
Communication: Successes are as
important to understanding as failures.
Customer Priorities: Never lose sight of
the customers priorities.
 Six Sigma Education

Green Belt: An employee who achieved the

first level of training in a Six Sigma program and
spends part of his or her time teaching and
helping teams with their projects.

Black Belt: An employee who reached the

highest level of training in a Six Sigma program
and spends all of his or her time teaching and
leading teams involved in Six Sigma projects.

Master Black Belt: Full-time teachers and

mentors to several black belts.
 International Quality
Documentation Standards

ISO
A set of standards governing
documentation of a quality program.

9000
Documentation standards that require

ISO participating companies to keep track of

their raw materials use and their
generation, treatment, and disposal of

14000
hazardous wastes.
 Malcolm Baldrige National
Quality Award
Named after the late secretary of commerce, a strong
proponent of enhancing quality as a means of
reducing the trade deficit. The award promotes,
recognizes, and publicizes quality strategies and
achievements.
1. Category 1 Leadership 120 points
2. Category 2 Strategic Planning 85 points
3. Category 3 Customer and Market Focus 85 points
4. Category 4 Measurement, Analysis, and

Knowledge Management 90 points

5. Category 5 Human Resource Focus 85 points
6. Category 6 Process Management 85 points
7. Category 7 Business Results 450 points