Quality Management

&
Control
 Does Quality Matter?
Williams Johnston owner of the Ritz-Carlton Hotels has a
wonderful saying: "Quality is a race with no finish line"!
Natalie Nabal writes: "If 99.9% is good enough, then every year
the following things would occur (in the US):
 2 million documents would be lost by the IRS:
 12 babies would be given to the wrong parents;
 291 pace-maker operations would be performed incorrectly;
 20,000 drug prescriptions would be wrongly written;
 114,500 mismatched pairs of shoes would be shipped.
Now that may not mean much - unless it was your baby, your
prescription, your pacemaker, your taxes, or your shoes!
 Dimensions Of Product Quality (Garvin)
1. Performance - basic operating characteristics
2. Features - “extra” items added to basic features
3. Reliability - probability product will operate over time
4. Conformance - meeting pre-established standards
5. Durability - life span before replacement
6. Serviceability - ease of getting repairs, speed & competence of
repairs
7. Aesthetics - look, feel, sound, smell or taste
8. Safety - freedom from injury or harm
9. Other perceptions - subjective perceptions based on brand
name, advertising, etc
 Service Quality
1. Time & Timeliness - customer waiting time, completed on time
2. Completeness - customer gets all they asked for
3. Courtesy - treatment by employees
4. Consistency - same level of service for all customers
5. Accessibility & Convenience - ease of obtaining service
6. Accuracy - performed right every time
7. Responsiveness - reactions to unusual situations
 Service Quality
1. Reliability: Perform promised service dependably and
accurately … JUTC buses arrive on time each day.
2. Responsiveness: Willingness to help customers promptly …
measures by NCB/BNS to ensure that customers do not wait for
no apparent reason.
3. Assurance: Ability to convey trust and confidence ... being
polite and showing respect for customer by providing relevant
information.
4. Empathy: Ability to be approachable ... Available/willing to
listen to the customer.
5. Tangibles: Physical facilities and facilitating goods ... Ensure
that the facilities are clean and at required level
 Total Quality Management
Commitment to quality throughout the organisation
Principles of TQM
– Customer-oriented
– Leadership
– Strategic planning
– Employee responsibility
– Continuous improvement
– Cooperation
– Statistical methods
– Training and education
 Names associated with Quality
 Walter Shewart –
– in 1920s, developed control charts;
– introduced the term “quality assurance”
 W. Edwards Deming -
– developed courses during World War II to teach statistical quality-control techniques
to engineers and executives of companies that were military suppliers
– after the war, began teaching statistical quality control to Japanese companies
 Joseph M. Juran -
– Followed Deming to Japan in 1954
– Focused on strategic quality planning
 Armand V. Feigenbaum –
– in 1951, introduced concepts of total quality control and continuous quality improvement

3-7
 Names associated with Quality
 Philip Crosby
 in 1979, emphasized that costs of poor quality far outweigh the cost of
preventing poor quality
 in 1984, defined absolutes of quality management—conformance to
requirements, prevention, and “zero defects”
 Kaoru Ishikawa
 promoted use of quality circles
 developed “fishbone” diagram
 emphasized importance of internal customer

3-8
 Some Underlying Principles of TQM
 Executive Management – Top management should act as the main driver for
TQM and create an environment that ensures its success.
 Training – Employees should receive regular training on the methods and
concepts of quality.
 Customer Focus – Improvements in quality should improve customer
satisfaction.
 Decision Making – Quality decisions should be made based on measurements.
 Methodology and Tools – Use of appropriate methodology and tools ensures
that non-conformances are identified, measured and responded to consistently.
 Continuous Improvement – Companies should continuously work towards
improving manufacturing and quality procedures.
 Company Culture – The culture of the company should aim at developing
employees ability to work together to improve quality.
 Employee Involvement – Employees should be encouraged to be pro-active in
identifying and addressing quality related problems.
 Three Fundamental Principles
 Continuous Improvement – Kaizen Mindset
– performance level of the firm as something to be
"continuously challenged and incrementally
upgraded."
 Employee Involvement – Empowerment
– employee involvement and team efforts are the key to
improvement…quality circles, process improvement
teams, self-managed improvement teams
 Customer Satisfaction – The aim of TQM
– involves both internal & external customers
– “starts” and “ends” with the customer in mind
 PDCA Cycle (Deming Wheel)

1. Plan a change
4. Institutionalize
aimed at
(Act on) the
improvement.
change or
abandon or do
it again. 4. Act 1. Plan

3. Check 2. Do

3. Study (Check) the 2. Execute (Do)

results; did it work? the change.
Quality Management/Control Tools
1. Pareto analysis
2. Flowcharts
3. Check sheets
4. Histograms
5. Scatter diagrams
6. Control charts
7. Fishbone diagram
 Fishbone Diagram
Measurement Human Machines

Faulty testing equipment Poor supervision Out of adjustment

Incorrect specifications Lack of concentration Tooling problems

Improper methods Inadequate training Old/worn

Quality
Inaccurate Problem
temperature
control Defective from vendor Poor process design
Ineffective quality
Not to specifications management
Dust and Dirt Material- Deficiencies
handling problems in product design

Environment Materials Process

 Assumptions & Cost of Quality
Assumptions:
Failures do occur
Prevention is cheaper
Performance can be measured
Costs
Appraisal costs
Prevention costs
Internal failure costs
External failure costs
8
The Three Basic Costs of Quality
 ISO 9000
 Series of standards agreed upon by the
International Organization for Standardization
(ISO)
 Adopted in 1987
 More than 100 countries
A prerequisite for global competition?
 ISO 9000 directs you to "document what you do
and then do as you documented."

24
 ISO 9000 Series
 9000
– Quality Management and Quality Assurance Standards: Guidelines for
Selection and Use
 9001
– Model for Quality Assurance in Design, Production Installation, and
Servicing.
 9002
– Model for Quality Assurance in Production and Installation
 9003
– Model for Quality Assurance in Final Inspection Test
 9004
– Quality Management and Quality System Elements--Guidelines

25
 Three Forms of Certification
1. First party: A firm audits itself against ISO 9000
standards.

2. Second party: A customer audits its supplier.

3. Third party: A "qualified" national or

international standards or certifying agency
serves as auditor.

27
 Process Capability
&
Statistical Quality Control
 Concepts …
 Statistical process control is the application of statistical
techniques to determine whether a process is delivering what the
customer wants ... it’s a collection of tools that when used together
can result in process stability and variability reduction
 Acceptance sampling is the application of statistical techniques to
determine whether a quantity of material should be accepted or
rejected based on the inspection or test of a sample.
 Variables: Service or product characteristics that can be measured,
such as weight, length, volume, or time.
 Attributes: Service or product characteristics that can be quickly
counted for acceptable performance.
 Causes of Variation
 Two basic categories of variation in output include common
causes and assignable causes.
 Common causes are the purely random, unidentifiable sources of
variation that are unavoidable with the current process.
– If process variability results solely from common causes of
variation, a typical assumption is that the distribution is
symmetric, with most observations near the center.
 Assignable causes of variation are any variation-causing factors
that can be identified and eliminated, such as a machine needing
repair.
 Control Charts
Control chart: A time-ordered diagram that is used to determine
whether observed variations are abnormal.
A sample statistic that falls between the UCL and the LCL indicates
that the process is exhibiting common causes of variation; a statistic
that falls outside the control limits indicates that the process is
exhibiting assignable causes of variation.
Control Chart Examples
 Type I and II Errors
Control charts are not perfect tools for detecting shifts in
the process distribution because they are based on
sampling distributions. Two types of error are possible
with the use of control charts.
Type I error occurs when one concludes that the process
is out of control based on a sample result that falls
outside the control limits, when in fact it was due to
pure randomness.
Type II error occurs when one concludes that the
process is in control and only randomness is present,
when actually the process is out of statistical control.
 Statistical Process Control Methods
 Control Charts for variables are used to monitor the
mean and variability of the process distribution.
 R-chart (Range Chart) is used to monitor process
variability.
 x-chart is used to see whether the process is generating
output, on average, consistent with a target value set by
management for the process or whether its current
performance, with respect to the average of the
performance measure, is consistent with past
performance.
– If the standard deviation of the process is known, we
can place UCL and LCL at “z” standard deviations
from the mean at the desired confidence level.
 Control Limits
The control limits for the x-chart are:
– –
UCLx = x= + A2R and LCLx = =
x - A2R
Where
=
X = central line of the chart, which can be either the average of past sample
means or a target value set for the process.
A2 = constant to provide three-sigma limits for the sample mean.

The control limits for the R-chart are UCLR = D4R and LCLR = D3R
where
R = average of several past R values and the central line of the chart.
D3,D4 = constants that provide 3 standard deviations (three-sigma) limits for a
given sample size.
 Calculating Three-Sigma Limits

Table From Text

 Example
West Allis is concerned about the company’s production of a special
metal screw used by their largest customers. The diameter of the screw is
critical. Data from five samples is shown in the table below. Sample size
is 4. Examine and state if the process in statistical control?
 Control Chart Factors
Factor for UCL Factor for Factor
R = 0.0021
D4 = 2.282 Size of and LCL for LCL for UCL for
Sample x-Charts R-Charts R-Charts
D3 = 0
(n) (A2) (D3) (D4)
x = 0.5027
A2 = 0.729 2 1.880 0 3.267
3 1.023 0 2.575
4 0.729 0 2.282
5 0.577 0 2.115
6 0.483 0 2.004
7 0.419 0.076 1.924
8 0.373 0.136 1.864
9 0.337 0.184 1.816
10 0.308 0.223 1.777

UCLR =
Range Chart:
LCLR =

UCLx =
LCLx =
 Control Chart Factors
Factor for UCL Factor for Factor
R = 0.0021
D4 = 2.282 Size of and LCL for LCL for UCL for
Sample x-Charts R-Charts R-Charts
D3 = 0
(n) (A2) (D3) (D4)
x = 0.5027
A2 = 0.729 2 1.880 0 3.267
3 1.023 0 2.575
4 0.729 0 2.282
5 0.577 0 2.115
6 0.483 0 2.004
7 0.419 0.076 1.924
8 0.373 0.136 1.864
9 0.337 0.184 1.816
10 0.308 0.223 1.777

UCLR = D4R = 2.282 (0.0021) = 0.00479 in.

LCLR = D3R 0 (0.0021) = 0 in.

UCLx = =
x + A2R = 0.5027 + 0.729 (0.0021) = 0.5042 in.
LCLx = =
x - A2R = 0.5027 – 0.729 (0.0021) = 0.5012 in.
West Allis Industries Range Chart
 x-Chart
Sample the process Find the assignable cause
Eliminate the problem Repeat the cycle
 Sunny Dale Bank
Sunny Dale Bank management determined the mean time to process a
customer is 5 minutes, with a standard deviation of 1.5 minutes.
Management wants to monitor mean time to process a customer by
periodically using a sample size of six customers.
Design an x-chart that has a type I error of 5 percent. That is, set the control limits
so that there is a 2.5 percent chance a sample result will fall below the LCL and a
2.5 percent chance that a sample result will fall above the UCL.

UCLx =

LCLx =

After several weeks of sampling, two successive samples came in at 3.70 and
3.68 minutes, respectively. Is the customer service process in statistical control?
 Sunny Dale Bank
Sunny Dale Bank management determined the mean time to process a customer is 5 minutes,
with a standard deviation of 1.5 minutes. Management wants to monitor mean time to process
a customer by periodically using a sample size of six customers.

Design an x-chart that has a type I error of 5 percent. That is, set the control limits so that
there is a 2.5 percent chance a sample result will fall below the LCL and a 2.5 percent
chance that a sample result will fall above the UCL.

= Control Limits
UCLx = x + zx
UCLx = 5.0 + 1.96(1.5)/ 6 = 6.20 min
LCL = =
xx – z x

x = / n LCLx = 5.0 – 1.96(1.5)/ 6 = 3.80 min

After several weeks of sampling, two successive samples came in at 3.70 and 3.68
minutes, respectively. Is the customer service process in statistical control?
 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+z and LCL = –
p−z
p p p

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

 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.
Using a p-Chart to monitor a process

Sample Wrong Proportion

Number Account # Defective
1 15 0.0060
2 12 0.0048
3 19 0.0076
4 2 0.0008
5 19 0.0076
6 4 0.0016
7 24 0.0096
8 7 0.0028
9 10 0.0040
10 17 0.0068
11 15 0.0060
12 3 0.0012
Total 147
 Using a p-Chart to monitor a process

n = 2500 Sample Wrong Proportion

147 Number Account # Defective
p= = 0.0049
12(2500) 1 15 0.0060
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 0.0040
= 0.0091 10 17 0.0068
11 15 0.0060
LCLp = 0.0049 – 3(0.0014) 12 3 0.0012
= 0.0007
Total 147
 c-Charts
 c-chart: A chart used for controlling the number of defects when
more than one defect can be present in a service or product.
 The underlying sampling distribution for a c-chart is the Poisson
distribution.
 The mean of the distribution is c
 The standard deviation is c
 A useful tactic is to use the normal approximation to the Poisson
so that the central line of the chart is c and the control limits are

UCLc = c+z c and LCLc = c−z c

 Example
In the Woodland Paper Company’s final step in their paper production process, the
paper passes through a machine that measures various product quality
characteristics. When the paper production process is in control, it averages 20
defects per roll.

a) Set up a control chart for the number of defects per roll. Use two-sigma
control limits.
b) Five rolls had the following number of defects: 16, 21, 17, 22, and 24,
respectively. The sixth roll, using pulp from a different supplier, had 5
defects. Is the paper production process in control?

c= UCLc =
z=
LCLc
 Example
In the Woodland Paper Company’s final step in their paper production process, the
paper passes through a machine that measures various product quality
characteristics. When the paper production process is in control, it averages 20
defects per roll.

a) Set up a control chart for the number of defects per roll. Use two-sigma
control limits.
b) Five rolls had the following number of defects: 16, 21, 17, 22, and 24,
respectively. The sixth roll, using pulp from a different supplier, had 5
defects. Is the paper production process in control?

c = 20 UCLc = c+z c = 20 + 2 20 = 28.94

z=2
LCLc = c−z c = 20 - 2 20 = 11.06
 Example

Solver - c-Charts
Number of Defects

Sample Number
 Process Capability
Process limits (The “Voice of the Process” or The
“Voice of the Data”) - based on natural (common cause)
variation
Tolerance limits (The “Voice of the Customer”) –
customer requirements
Process Capability – A measure of how “capable” the
process is to meet customer requirements; compares
process limits to tolerance limits
 Process Capability
 Nominal value is a target for design specifications.
 Tolerance is an allowance above or below the nominal value.

Nominal
value
Process distribution
Lower Upper
specification specification

20 25 30 Minutes

Process is capable
 Process Capability

Nominal
value
Process distribution
Lower Upper
specification specification

20 25 30 Minutes

Process is not capable

 Effects of Reducing
Variability on Process Capability

Nominal value
Six sigma

Four sigma

Two sigma
Lower Upper
specification specification

Mean
 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.

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
 Using Continuous Improvement to
Determine Process Capability
 Step 1: Collect data on the process output; calculate mean and
standard deviation of the distribution.
 Step 2: Use data from the process distribution to compute process
control charts.
 Step 3: Take a series of random samples from the process and plot
results on the control charts.
 Step 4: Calculate the process capability index, Cpk, and the
process capability ratio, Cp, if necessary. If results are acceptable,
document any changes made to the process and continue to
monitor output. If the results are unacceptable, further explore
assignable causes.
 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 four-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
 Assessing Process Capability
Upper specification = 30 minutes
Lower specification = 20 minutes
Average service = 26.2 minutes
 = 1.35 minutes

= x – Lower specification Upper specification – x =

Cpk = Minimum of ,
3 3

Cpk = Minimum of
,
Process
Cpk = Minimum of = Capability
Index
 Assessing Process Capability
Upper specification - Lower specification
Cp =
6

Cp = = Process Capability Ratio

Before Process Modification

Upper specification = 30.0 minutes Lower specification = 20.0 minutes
Average service = 26.2 minutes
 = 1.35 minutes Cpk = Cp =

After Process Modification

Upper specification = 30.0 minutes Lower specification = 20.0 minutes
Average service = 26.1 minutes
 = 1.2 minutes Cpk = Cp =
 Assessing Process Capability
Upper specification = 30 minutes
Lower specification = 20 minutes
Average service = 26.2 minutes
 = 1.35 minutes

= x – Lower specification Upper specification – x =

Cpk = Minimum of ,
3 3

Cpk = Minimum of 26.2 – 20.0 30.0 – 26.2

3(1.35)
, 3(1.35)

Process
Cpk = Minimum of 1.53, 0.94 = 0.94 Capability
Index
 Assessing Process Capability
Upper specification - Lower specification
Cp =
6
30 - 20
Cp = 6(1.35)
= 1.23 Process Capability Ratio

Does not meet 4 (1.33 Cp) target

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

After Process Modification

Upper specification = 30.0 minutes Lower specification = 20.0 minutes
Average service = 26.1 minutes
 = 1.2 minutes Cpk = 1.08 Cp = 1.39
Student Reading
 Six Sigma
 Philosophy
 Eliminate defects through prevention and process
improvement
 Methodology
 Team-based approach to process improvement using the
DMAIC cycle
 Set of tools
 Quantitative and qualitative statistically based tools
 Goal
 3.4 defects per million opportunities (DPMO)
 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.
 Successful Six Sigma
 Top-management support
 Extensive training
 DMAIC approach
 Use of quantitative measures
 Team-based projects
 Impact on organization’s financials
 DMAIC & TQM Processes
 Define
Control Define
 Measure
 Analyze Act Plan
 Improve
 Control
Improve Measure

Check Do
Analyze
 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 customer’s
priorities.
 Six Sigma Culture/Training
 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.
Student Practice Example
 Try the following:
MKS Inc., produces meter sticks that have a target length of 100 centimeters with
upper and lower specification limits of 100.05 and 99.95 centimeters respectively.
Their existing process produces meter sticks with an average length of 99.97
centimeters and a standard deviation of 0.015 centimeters. They are considering the
purchase of a new machine that can hold a process output average exactly to target
with a standard deviation of 0.02. Which machine will provide a better process
capability index?
 Solution
Old Process =

=Minimum of

=Minimum of

=[0.44, 1.78] =0.44

New Process =
Additional Notes for Noting
 A Few Statements on Cp & Cpk
 "Cpk measures how close you are to your target and how consistent you are
around your average performance. A person may be performing with
minimum variation, but he can be away from his target towards one of the
specification limits, which indicates lower Cpk, whereas Cp will be high. On
the other hand, a person may be on average exactly at the target, but the
variation in performance is high (but still lower than the tolerance band (i.e.
specification interval). In such case also Cpk will be lower, but Cp will be
high. Cpk will be higher only when you are meeting the target consistently
with minimum variation." Ajit
 Cpk ≤ Cp
 If Cpk < Cp  The process distribution is not centered between the
specification limits
 Cpk = Cp  The process distribution is centered between the specification
limits
 A Few Statements on Cp & Cpk
 "Consider a car and a garage. The garage defines the specification limits; the car
defines the output of the process. If the car is only a little bit smaller than the
garage, you had better park it right in the middle of the garage (center of the
specification) if you want to get all of the car in the garage. If the car is wider than
the garage, it does not matter if you have it centered; it will not fit. If the car is a lot
smaller than the garage (six sigma process), it doesn't matter if you park it exactly in
the middle; it will fit and you have plenty of room on either side. If you have a
process that is in control and with little variation, you should be able to park the car
easily within the garage and thus meet customer requirements. Cpk tells you the
relationship between the size of the car, the size of the garage and how far away
from the middle of the garage you parked the car." Ben
 "The value itself can be thought of as the amount the process (car) can widen before hitting the
nearest spec limit (garage door edge).

 Cpk =1/2 means you've crunched nearest the door edge (ouch!)
 Cpk =1 means you're just touching the nearest edge
 Cpk = 2 means your width can grow 2 times before touching

 Cpk = 3 means your width can grow 3 times before touching" Larry Seibel
 A Few Statements on Cp & Cpk
 The value of CPK is simply ZMIN divided by 3. Since the
smallest value represents the nearest specification, the value of
CPK tells you if the process is truly capable of meeting
requirements. A CPK of at least +1 is required, and +1.33 is
preferred. Note that CPK is closely related to CP, and that the
difference between CPK and CP represents the potential gain to
be had from centering the process.