1

UNIT V
 2

Total Quality Management Concept - Statistical

Quality Control for Acceptance Sampling and
Process Control – Concepts of O.C.C. Curve –
Use of the O.C. Curve – Concept of Type I and
Type II error – Quality movement – Quality
circles –– ISO Quality Certifications and types –
Quality assurance – Six Sigma concept
 3

Total
Quality
Management
 4
Concepts

 What is quality?
Dictionary has many definitions: “Essential characteristic,”
“Superior,” etc.

 Some definitions that are accepted in various organizations:

 “Quality is customer satisfaction,”

 “Quality is Fitness for Use.”
 5
Concepts

 The banker will answer” service”

 The healthcare worker will answer “quality
health care”
 The hotel employee will answer “customer
satisfaction”
 The manufacturer will simply answer
“quality product”
 6
Defining Quality – 5 Ways

1. Conformance to specifications
 Does product/service meet targets and tolerances defined by
designers?
2. Fitness for use
 Evaluates performance for intended use
3. Value for price paid
 Evaluation of usefulness vs. price paid
4. Support services
 Quality of support after sale
5. Psychological
 Ambiance, prestige, friendly staff
 7
Concepts

 What is a customer?
Anyone who is impacted by the product or process delivered by
an organization.

 External customer: The end user as well as intermediate

processors. Other external customers may not be purchasers but
may have some connection with the product.

 Internal customer: Other divisions of the company that receive

the processed product.
 8
Concepts

What is a product?
The output of the process carried out by the
organization.

It may be
goods (e.g. automobiles, missile),
software (e.g. a computer code, a report) or
service (e.g. banking, insurance,edu.,trans.)
 9
Concepts

 How is customer satisfaction achieved?

Two dimensions: Product features and
Freedom from deficiencies.
Product features

Freedom from deficiencies

 10
Two dimensions:

 Product features – Refers to quality of design.

 Freedom from deficiencies – Refers to quality of conformance.

 11
Why Quality?

Reasons for quality becoming a cardinal priority for most

organizations:
 Competition – Today’s market demand high quality
products at low cost. Having `high quality’ reputation is
not enough! Internal cost of maintaining the reputation
should be less.
 Changing customer – The new customer is not only
commanding priority based on volume but is more
demanding about the “quality system.”
 12
Why Quality?

 Changing product mix – The shift from low volume,

high price to high volume, low price have resulted in a
need to reduce the internal cost of poor quality.

 Product complexity – As systems have become more

complex, the reliability requirements for suppliers of
components have become more stringent.
 13
Why Quality?

 Higher levels of customer satisfaction – Higher

customers expectations are getting spawned by
increasing competition.
INTRODUCTION TO TQM

What is TQM?
TQM is the integration of all functions and processes
within an organization in order to achieve continuous
improvement of the quality of goods and services.
The goal is customer satisfaction.
 Elements of
TQM
To be successful implementing TQM, an organization
must concentrate on the eight key elements:
1.Ethics
2.Integrity
3.Trust
4.Training
5.Teamwork
6.Leadership
7.Recognition
8.Communication
 These elements can be divided into four
groups according to their function. The
groups are:

I. Foundation – It includes: Ethics, Integrity and

Trust.

II. Building Bricks – It includes: Training, Teamwork

and Leadership.

III. Binding Mortar – It includes: Communication.

IV. Roof – It includes: Recognition.

 A.Foundation

 Ethics – Ethics is the discipline concerned with good and bad in any
situation. It is a two-faceted subject represented by organizational
and individual ethics. Organizational ethics establish a business
code of ethics that outlines guidelines that all employees are to
adhere to in the performance of their work. Individual ethics include
personal rights or wrongs.
 Integrity – Integrity implies honesty, morals, values, fairness, and
adherence to the facts and sincerity. The characteristic is what
customers expect and deserve to receive.
 Trust – Trust is a by-product of integrity and ethical conduct.
Without trust, the framework of TQM cannot be built. It allows
empowerment that encourages pride ownership and it encourages
commitment. Trust is essential to ensure customer satisfaction.
 B.Bricks

 Training – Training is very important for employees to be highly

productive. Training the employees require interpersonal skills, the
ability to function within teams, problem solving, decision making,
job management performance analysis and improvement, business
economics and technical skills.
 Teamwork – To become successful in business, teamwork is also a
key element of TQM. With the use of teams, the business will
receive quicker and better solutions to problems. Teams also
provide more permanent improvements in processes and operations.
 Leadership – It is possibly the most important element in TQM. It
appears everywhere in organization. Leadership in TQM requires
the manager to provide an inspiring vision, make strategic
directions that are understood by all and to instill values that guide
subordinates.
 C. Binding Mortar

Communication – It binds everything together. Starting from

foundation to roof of the TQM house, everything is bound by
strong mortar of communication. It acts as a vital link between all
elements of TQM. Communication means a common
understanding of ideas between the sender and the receiver.
 D. Roof 24

Recognition – Recognition is the last and final element

in the entire system. It should be provided for both
suggestions and achievements for teams as well as
individuals. Employees strive to receive recognition for
themselves and their teams. Detecting and recognizing
contributors is the most important job of a supervisor.
Benefits of TQM

 Greater customer loyalty

 Market share improvement
 Higher stock prices
 Reduced service calls
 Higher prices
 Greater productivity
Principles of TQM 26
 27

Statistical
Quality
Control
 28
What is SQC ?

 Statisticalquality control (SQC) is the term

used to describe the set of statistical tools used
by quality professionals.
 29

History
 SQC was pioneered by Walter A. Shewhart at Bell
Laboratories in the early 1920s.

 Shewhart developed the control chart in 1924 and the concept

of a state of statistical control.

 Shewhart consulted with Colonel Leslie E. Simon in the

application of control charts to munitions manufacture at the
Army's Picatinney Arsenal in 1934.  
 30

History

 W. Edwards Deming invited Shewhart to speak at the Graduate
School of the U.S. Department of Agriculture, and served as the editor of
Shewhart's book Statistical Method from the Viewpoint of
Quality Control (1939) which was the result of that lecture.

 Deming was an important architect of the quality

control short courses that trained American industry in
the new techniques during WWII. 
 31

 Deming traveled to Japan during the Allied Occupation and met with the Union
of Japanese Scientists and Engineers(JUSE)in an effort to introduce SQC
methods to Japanese industry
 32
SQC Categories
 33
Descriptive Statistics
 Descriptive statistics are used to describe
quality characteristics and relationships.
 34
Descriptive Statistics
 The Mean- measure of central tendency

 TheRange- difference between largest/smallest

observations in a set of data

 Standard Deviation measures the amount of data

dispersion around mean
 35
The Mean
 To compute the mean we simply sum all the observations and divide by the total
no. of observations.
 36
The Range
 Range, which is the difference between
the largest and smallest observations.
 37

Standard Deviation
 Standard deviation is a measure of dispersion of a curve.

 It measures the extent to which these values are scattered

around the central mean.
 38
38
Statistical process
control

• Extend the use of descriptive statistics to monitor

the quality of the product and process

• Statistical process control help to determine the amount of

variation

• To make sure the process is in a state of control

 39
Variation in Quality
 No two items are exactly alike.

 Some sort of variations in the two items is bound to be there. In fact it is an

integral part of any manufacturing process.

 This difference in characteristics known as variation.

 This variation may be due to substandard quality of raw material,

carelessness on the part of operator, fault in machinery system etc..
 40
Types Of Variations
 41 41
Variation due to chance
causes/common causes

 Variation occurred due to chance.

 This variation is NOT due to defect in machine, Raw
material or any other factors.
 Behave in “random manner”.
 Negligible but Inevitable
 The process is said to be under the state of statistical control.
 42
Variation due to assignable causes

Non – random causes like:

 Difference in quality of raw material

 Difference in machines
 Difference in operators
 Difference of time
43
 44
Setting Control Limits
 45
HOW CONTROL LIMITS ARE
USEFUL…..?
 46
SPC Methods- Control Charts
Control Charts
(show sample data plotted on a graph with CL, UCL, and LCL)

Control chart for variables Control charts for attributes

are used to monitor characteristics
that can be measured, e.g. length,
weight, diameter, time
are used to monitor characteristics that
have discrete values and can be
counted, e.g. % defective, number of
flaws in a shirt, number of broken eggs
in a box
 47
Charts
 48
Control Charts for Variables
x-bar charts
It is used to monitor the changes in the mean of a process (central
tendencies).
 49
R-bar charts
 Itis used to monitor the dispersion or
variability of the process
Factors for three sigma control 50
limits--- Appendix XI

Factor for x-Chart Factors for R-Chart

Sample Size
(n)
A2 D3 D4
2 1.88 0.00 3.27
3 1.02 0.00 2.57
4 0.73 0.00 2.28
5 0.58 0.00 2.11
6 0.48 0.00 2.00
7 0.42 0.08 1.92
8 0.37 0.14 1.86
9 0.34 0.18 1.82
10 0.31 0.22 1.78
11 0.29 0.26 1.74
12 0.27 0.28 1.72
13 0.25 0.31 1.69
14 0.24 0.33 1.67
15 0.22 0.35 1.65
Constructing a X-bar chart 51
( sigma is not given)

 A factory produces 50 cylinders per hour. Samples of 10 cylinders

are taken at random from the production at every hour and the
diameters of cylinders are measured. Draw X-bar and R charts and
decide whether the process is under control or not.

(For n=4 A2= 0.73 D3= 0, D4=2.28)

 52
Sample no. x1 x2 x3 x4

1 230 238 242 250

2 220 230 218 242

3 222 232 236 240

4 250 240 230 225

5 228 242 235 225

6 248 222 220 230

7 232 232 242 242

8 236 234 235 237

9 231 248 251 271

10 220 222 224 231

 53
Sample x1 x2 x3 x4 Sigma Mean Range
no. Xi X-bar R
1 230 238 242 250 960 240.00 20
2 220 230 218 242 910 227.50 24
3 222 232 236 240 930 232.50 18
4 250 240 230 225 945 236.25 25
5 228 242 235 225 930 232.50 17
6 248 222 220 230 920 230.00 28
7 232 232 242 242 948 237.00 10
8 236 234 235 237 942 235.50 3
9 231 248 251 271 1001 250.25 40
10 220 222 224 231 897 224.25 11
Total 2345.75 196
 54
Calculation of x-bar and R-bar

 Now,

x
 x 2345.75
  234.75
m 10

R
 R 196
  19.6
m 10
 55
Control limits of X-Bar Chart
 Central line C.L = x  234.75

 U.C.L = x  A2 * r
=234.75 + (0.73) (19.6)
=249.06

 L.C.L= x  A2 * r
=234.75- (0.73) (19.6)
=220.72
 56
X-Bar Chart
 57
Control limits of R-Bar Chart
 Central Line = R  19.6

 U.C.L = D 4 R  (2.28) * (19.96)

=45.50

 L.C.L = D3R  (0) * (19.96)

=0
 58
R-Bar Chart
 59
Constructing a X-bar Chart (Sigma
is given)
 A quality control inspector at the Coca-Cola soft drink company has taken
twenty-five samples with four observations each of the volume of bottles
filled. The data and the computed means are shown in the table. If the
standard deviation of the bottling operation is 0.14 ounces, use this
information to develop control limits of three standard deviations for the
bottling operation.
60
 61

Equations
UCL  X  z x s
x
n
LCL  X  z x R
s
d2
62
 63
X-Bar Control Chart
 64
Control Charts for Attributes
 Attributes are discrete events; yes/no, pass/fail

Use P-Charts for quality characteristics that are discrete

and involve yes/no or good/bad decisions
 Number of leaking caulking tubes in a box of 48
 Number of broken eggs in a carton

Use C-Charts for discrete defects when there can be

more than one defect per unit
 Number of flaws or stains in a carpet sample cut from a production
run
 Number of complaints per customer at a hotel
 65
P-Chart Example
 A Production manager of a BKT tire company has inspected the
number of defective tires in five random samples with 20 tires in
each sample. The table below shows the number of defective tires in
each sample of 20 tires. Calculate the control limits.
66
67
 68
P- Control Chart
 69
C - Chart Example
 The number of weekly customer complaints are monitored in a
large hotel using a c-chart. Develop three sigma control limits
using the data table below.
70
71
 72
C - Control Chart
 73
Process Capability
 Evaluating the ability of a production process to meet or exceed
preset specifications. This is called process capability.

 Product specifications, often called tolerances, are preset ranges of

acceptable quality characteristics, such as product dimensions.
 74
Two parts of process capability

1) Measure the variability of the output of a process, and

2) Compare that variability with a proposed specification or product tolerance.

 75
Measuring Process Capability
 Toproduce an acceptable product, the process
must be capable and in control before production
begins.

USL  LSL
Cp 
6
 76

Example
 Let’ssay that the specification for the
acceptable volume of liquid is preset at 16
ounces ±.2 ounces, which is 15.8 and 16.2
ounces.
 77

Figure (a)
 The process produces 99.74 percent (three sigma) of the product
with volumes between 15.8 and 16.2 ounces.

Cp  1
 78

Figure (b)
 The process produces 99.74 percent (three sigma) of the
product with volumes between 15.7 and 16.3 ounces.

Cp  1
 79

Figure (c)
 the production process produces 99.74 percent (three sigma) of the
product with volumes between 15.9 and 16.1 ounces.

Cp  1
80
81
Process capability ratio 82
(off centering process)

 There is a possibility that the process mean may shift over a period of time,
in either direction, i.e., towards the USL or the LSL. This may result in more
defective items then the expected. This shift of the process mean is called
the off-centering of the process.

 USL     LSL 
Cpk  min , 
 3 3 
 83

Example
 Process mean:   15.9
 Process standard deviation:   0.067
 LSL = 15.8
 USL = 16.2

0.4
Cp  1
6(0.067)
 84

 USL     LSL 
Cpk  min , 
 3 3 
 16.2  15.9 15.9  15.8 
Cpk  min , 
 3(.1) 3(.1) 

C pk  min1.00, 0.33 
 
C pk  0.33
 85
Acceptance Sampling

Defined: the third branch of SQC refers to the process of randomly

inspecting a certain number of items from a lot or batch in order to
decide whether to accept or reject the entire batch

 Different from SPC because acceptance sampling is performed either

before or after the process rather than during
 Sampling before typically is done to supplier material

 Sampling after involves sampling finished items before shipment or finished

components prior to assembly
 86
Acceptance Sampling Plans

Goal of Acceptance Sampling plans is to determine the criteria for

acceptance or rejection based on:
 Lot size = N
 Sample size = n
 Acceptance number = c
 Defective items = c’
 If c’ < c accept lot

 If c’ > c reject lot

 87
Types of Sampling plans

 There are single, double, and multiple sampling

plans
 Which one to use is based on cost involved,
time consumed, and cost of passing on a
defective item
 Can be used on either variable or attribute
measures, but more commonly used for attributes
Single-Sampling Plan

 Acceptance or rejection decision is

made after drawing only one sample
from the lot.
 If the number of defectives, c’, does
not exceed the acceptance criteria, c,
the lot is accepted.
Single-Sampling Plan
Lot of N Items

Random
Sample of
N - n Items n Items

c’ Defectives
Inspect n Items
Found in Sample
Replace
c’ > c c’ < c Defectives

n Nondefectives
Reject Lot Accept Lot
 Double-Sampling Plan

 One small sample is drawn initially.

 If the number of defectives is less than or
equal to some lower limit, the lot is accepted.
 If the number of defectives is greater than
some upper limit, the lot is rejected.
 If the number of defectives is neither, a second
larger sample is drawn.
 Lot is either accepted or rejected on the basis
of the information from both of the samples.
 Double-Sampling Plan

Lot of N Items
Random
Sample of
N – n1 Items n1 Items
Replace
c1’ Defectives Defectives
Inspect n1 Items
Found in Sample
n1 Nondefectives
c1’ > c2 c1’ < c1
Accept Lot
c1 < c1’ < c2
Reject Lot
Continue (to next slide)
 Double-Sampling Plan
Continue (from previous slide)

N – n1 Items

Random
N – (n1 + n2) Sample of
Items n2 Items
Replace
c2’ Defectives Defectives
Reject Lot Inspect n2 Items
Found in Sample
n2 Nondefectives
(c1’ + c2’) > c2
(c1’ + c2’) < c2
Accept Lot
Sequential-Sampling Plan

 Units are randomly selected from the lot

and tested one by one.
 After each one has been tested, a reject,
accept, or continue-sampling decision is
made.
 Sampling process continues until the lot is
accepted or rejected.
 Sequential-Sampling Plan

7
Number of Defectives

6
Reject Lot
5

4
Continue Sampling
3

1 Accept Lot
0
0 10 20 30 40 50 60 70 80 90 100 110 120 130
Units Sampled (n)
 95
Operating Characteristic Curve
(OCC)

An Operating Characteristic

Curve (OCC) is a probability curve
for a sampling plan that shows
the probabilities of accepting lots
with various lot quality levels
(%defectives).
 96
Operating Characteristics (OC)
Curves
 OC curves are graphs which
show the probability of accepting
a lot given various proportions of
defects in the lot
 X-axis shows % of items that are
defective in a lot- “lot quality”
 Y-axis shows the probability or
chance of accepting a lot
 As proportion of defects
increases, the chance of
accepting lot decreases
 Example: 90% chance of
accepting a lot with 5%
defectives; 10% chance of
accepting a lot with 24%
defectives
 97
AQL, LTPD, Consumer’s Risk
(α) & Producer’s Risk (β)
 AQL is the small % of defects that
consumers are willing to accept;
order of 1-2%
 LTPD is the upper limit of the
percentage of defective items
consumers are willing to tolerate
 Consumer’s Risk (α) is the chance
of accepting a lot that contains a
greater number of defects than the
LTPD limit; Type II error
 Producer’s risk (β) is the chance a
lot containing an acceptable quality
level will be rejected; Type I error
 Developing OC Curves 98

 OC curves graphically depict the discriminating power of a

sampling plan
 Cumulative binomial tables like partial table below are
used to obtain probabilities of accepting a lot given
varying levels of lot defectives
 Top of the table shows value of p (proportion of defective
items in lot), Left hand column shows values of n
(sample size) and x represents the cumulative number of
defects found
 Developing OC Curves 99

Partial Cumulative Binomial Probability Table (see Appendix C for complete table)
Proportion of Items Defective (p)

.05 .10 .15 .20 .25 .30 .35 .40 .45 .50

n x

5 0 .7738 .5905 .4437 .3277 .2373 .1681 .1160 .0778 .0503 .0313

Pac 1 .9974 .9185 .8352 .7373 .6328 .5282 .4284 .3370 .2562 .1875

AOQ .0499 .0919 .1253 .1475 .1582 .1585 .1499 .1348 .1153 .0938
 100
Example: Constructing an OC
Curve
 Lets develop an OC curve for a
sampling plan in which a sample of 5
items is drawn from lots of N=1000
items
 The accept /reject criteria are set up
in such a way that we accept a lot if
no more that one defect (c=1) is
found
 Using Table 6-2 and the row
corresponding to n=5 and x=1
 Note that we have a 99.74% chance
of accepting a lot with 5% defects
and a 73.73% chance with 20%
defects
 101
Average Outgoing Quality
(AOQ)
 With OC curves, the higher the quality of the
lot, the higher is the chance that it will be
accepted
 Conversely, the lower the quality of the lot,
the greater is the chance that it will be
rejected
 The average outgoing quality level of the
product (AOQ) can be computed as follows:
AOQ=(Pac)p
 Returning to the bottom line in Table 6-2,
AOQ can be calculated for each proportion of
defects in a lot by using the above equation
 This graph is for n=5 and x=1 (same as
c=1)
 AOQ is highest for lots close to 30% defects
 102
Implications for Managers

 How much and how often to inspect?

 Consider product cost and product volume
 Consider process stability
 Consider lot size
 Where to inspect?
 Inbound materials
 Finished products
 Prior to costly processing
 Which tools to use?
 Control charts are best used for in-process production
 Acceptance sampling is best used for inbound/outbound
 Definitions: Types of Errors

 Type I error: The null hypothesis is

rejected when it is true.
 Type II error: The null hypothesis is not
rejected when it is false.
 Thereis always a chance of making one of
these errors. We’ll want to minimize the
chance of doing so!
Errors in Hypothesis Testing

Truth
Null Alternative
Decision
hypothesis hypothesis
Do not TYPE II
OK
reject null ERROR
TYPE I
Reject null OK
ERROR
 ACCEPTANCE SAMPLING

 PRODUCERS RISK:
RISK ASSOCIATED WITH REJECTING A LOT OF GOOD QUALITY
 CONSUMERS RISK:
RISK ASSOCIATED WITH ACCEPTING A DEFECTIVE LOT

Action Good Lot Poor Lot

Consumer Accept Correct Error

decision
Producer Reject Error Correct
decision
• Six Sigma is a business management strategy,
originally developed by Motorola in 1986. Six Sigma
became well known after Jack Welch made it a central
focus of his business strategy at General Electric in
1995, and today it is widely used in many sectors of
industry.
• Six Sigma seeks to improve the quality of process
outputs by identifying and removing the causes of
defects (errors) and minimizing variability in
manufacturing and business processes.
• With six sigma quality processes,
and whether the numerical value of the
desired qualitycan be seen. This approach is
a process of improving the performance
of the error rate of the unit aims to
reach 3.4 million.
 109

Thank You…