Unit V

Quality & Productivity

Management
 Quality and Performance

Quality
 A term used by customers to describe their general
satisfaction with a service or product.
 In manufacturing, a measure of excellence or a state of being
free from defects, deficiencies and significant variations.
 The totality of features and characteristics of a product or
service that bears its ability to satisfy stated or implied
needs.

Defect
 Any instance when a process fails to satisfy its customer
 Eight Dimensions of Quality

Performance: It involves various operating

characteristics of a product.
Features: These are characteristics that are
supplemental to the basic operating characteristics.
Reliability: It is the degree of dependability and
trustworthiness of the benefits of the product for a
long period of time.
Conformance: It is the degree to which the
product conforms to pre-established specifications.
 Eight Dimensions of Quality

Durability: It measures the length of time that a

product is expect to perform before being replaced.
Serviceability: It refers to promptness, courtesy
and ease in repair when the product breaks down.
Aesthetics: It refers to impact of a product on
human senses like how it feels, looks, sounds, tastes
and so on.
Perceived Quality: It refers to the perception of
the quality of a product in the mind of the customer.
 Costs of Quality

Prevention costs
Appraisal costs
Internal Failure costs
External Failure costs
 Costs of Quality

Prevention costs
 Costs associated with preventing defects before they
happen.
 These include the costs of redesigning the process to
remove the causes of poor performance, redesigning
products or services to make them simpler.
Appraisal costs
 Costs incurred when the firm assesses the performance
level of its processes.
 As prevention costs increases, the quality improves and
subsequently the appraisal cost decreases.
 Costs of Quality

Internal Failure costs

 Costs resulting from defects that are discovered
during the production of a service or product.
 Defects are of two types: rework & scrap.

External Failure costs

 Costs that arise when a defect is discovered after
the customer receives the service or product.
 These costs also include warranty and litigation
costs.
 Total Quality Management
and Six Sigma

Total Quality Management

A philosophy that stresses three principles
(customer satisfaction, employee involvement
and continuous improvement) for achieving high
level of process performance and quality

Six Sigma
A comprehensive and flexible system for
achieving, sustaining, and maximizing business
success by minimizing defects and variability in
processes
Total Quality Management
 PDCA Cycle

PDCA (plan-do-check-act, sometimes seen as plan-do-check-

adjust) is a repetitive four-stage model for continuous
improvement in business process management. 
The PDCA model is also known as the Deming circle, or
control circle, or plan–do–study–act (PDSA). 
 PDCA Cycle

•The model is implemented to improve the quality and

effectiveness of processes within product lifecycle
management, project management, human resource
management, supply chain management and many other
areas of business. 
•PDCA was popularized by Dr. W. Edwards Deming, an
American engineer, statistician and management consultant.
•Deming is often considered the father of modern quality
control (QC). 
•Deming's theories form the basis for TQM (Total Quality
Management) and ISO 9001 quality standards. 
 PDCA Cycle

TQM processes are often divided into the four sequential

categories: plan, do, check, and act.
Plan: Define the problem to be addressed, collect relevant
data, and ascertain the problem's root cause.
Do: Develop and implement a solution; decide upon a
measurement to gauge its effectiveness.
Check: Confirm the results through before-and-after data
comparison.
Act: Document the results, inform others about process
changes, and make recommendations for the problem to be
addressed in the next PDCA cycle.
 Statistical Quality Control (SQC)

Statistical quality control refers to the use

of statistical methods in the monitoring and
maintaining of the quality of products and
services.

Variation of Outputs
 No two services or products are exactly alike because
the processes used to produce them contain many
sources of variation, even if the processes are working
as intended.
 Statistical Quality Control (SQC)

Two basic categories:

I. Statistical process control (SPC):
the application of statistical techniques to determine
whether a process is functioning as desired

II. Acceptance Sampling:

the application of statistical techniques to determine
whether a population of items should be accepted or
rejected based on inspection of a sample of those
items.
 Statistical Quality Control (SQC)

Quality Measurement: Variables vs
Attributes

Variables:
Service or product characteristics such as
weight, length, volume, or time that can be
measured on a continuous scale.
Like a postal department manager measures
the time drivers spend delivering packages.
 Statistical Quality Control (SQC)

Quality Measurement: Variables vs Attributes

Attributes:
Attribute data are counted and cannot have fractions.
Characteristics that can be quickly counted as either
"acceptable" or "not acceptable", thus have only
discrete, binary, or integer values.
Examples include the number of airline flights that
arrived within 15 minutes of scheduled time; the
proportion of TVs that were found to be inoperative at
the final test.
A report can have 4 or 5 errors but not 4.5 errors.
 Statistical Quality Control (SQC)

Control is maintained through the use of control

charts.
Control Chart is a time-ordered diagram that is
used to determine whether observed variations are
normal or abnormal.
Controls chart have a nominal value or center line,
Upper Control Limit (UCL), and Lower Control
Limit (LCL) and the process is in control if sample
measurements are between the limits.
 Statistical Quality Control (SQC)

Control Charts for Variables

X bar and R charts are used together -
control a process by ensuring that the
sample average and range remain within
limits for both.
 Statistical Quality Control (SQC)

Control Charts for Attributes

P Charts - measures proportion defects.
 Number of leaking tubes in a box
 Number of broken eggs in a crate
C Charts - measures the number of defects/unit
when there are more than one defect per unit.
 Number of flaws in a carpet sample cut from production
line
 Number of complaints per customer in a hotel
 Statistical Quality Control (SQC)

Control Charts for Variables

Two charts are used together: R-chart ("range
chart") and X barchart ("average chart")
Both the process variability (measured by the R-
chart) and the process average (measured by the X
bar chart) must be in control before the process can
be said to be in control.
Process variability must be in control before the X
bar chart can be developed because a measure of
process variability is required to determine the x-
chart control limits.
 Control Charts for Variables

R-Chart

UCLR = D4R and LCLR = D3R

 
 Control Charts for Variables

x-Chart
UCL = + A2 and LCL = - A2
where
= 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
Control Charts for Variables
 Example

The management of West Allis Industries is concerned about the

production of a special metal screw used by several of the company’s
largest customers. The diameter of the screw is critical to the customers.
Data from five samples appear in the accompanying table. The sample size
is 4. Is the process in statistical control?
OBSERVATIONS
Sample 1 2 3 4
Number
1 .5014 .5022 .5009 .5027
2 .5021 .5041 .5024 .5020
3 .5018 .5026 .5035 .5023
4 .5008 .5034 .5024 .5015
5 .5041 .5056 .5034 .5047
 Example

Sample 1 2 3 4 R     X bar
Number

1 .5014 .5022 .5009 .5027 .0018 .5018

2 .5021 .5041 .5024 .5020 .0021 .5027

3 .5018 .5026 .5035 .5023 .0017 .5026

4 .5008 .5034 .5024 .5015 .0026 .5020

5 .5041 .5056 .5034 .5047 .0022 .5045

Average .0021 .5027

 Example

Compute the range for each

sample and the control limits

UCLR = D4 R2.282(0.0021)
= = 0.00479 in.

LCLR = D3 R = 0(0.0021) = 0 in.

 Example

Process variability is in statistical control.

 Example

Compute the mean for each sample

and the control limits.

UCLx = X + A2 R = 0.5027 + 0.729(0.0021) =

0.5042 in.
LCLx = X – A2 R = 0.5027 – 0.729(0.0021) =
0.5012 in.
 Example

Process average is NOT in statistical

control.
 Example 2

Thermostats are subjected to rigorous testing

before they are shipped to air conditioning
technicians around the world. Results from the last
five samples are shown in the table. Is the process
under control? Draw the control charts to describe
the answer. Take A2 as 0.577, D3 as 0.00 and D4
as 2.115
 Example 2

Unit Sample 1 Sample 2 Sample 3 Sample 4 Sample 5

1 73.5 70.8 72.2 73.6 71.0

2 71.3 71.0 73.1 72.7 72.2

3 70.0 72.6 71.9 72.4 73.3

4 71.1 70.6 70.3 74.2 73.6

5 70.8 70.7 70.7 73.5 71.1

 Control Charts for Attributes

 p-charts are used for controlling the proportion of

defective services or products generated by the process.
 The standard deviation is

p  p 1  p  / n

p = the center line on the chart

z = number of standard deviations

UCLp = + zσp and LCLp = – zσp

 p-Chart Example
A production manager for a 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
using p-Chart.
Sample No. of defective tires
1 3
2 2
3 1
4 2
5 1
Total 9
 p-Chart Example

Sample No. of defective tires No. of tires in each Proportion defects

sample
1 3 20 .15
2 2 20 .10
3 1 20 .05
4 2 20 .10
5 1 20 .05
Total 9 100 .09

p  p 1  p  / n =0.064

UCLp = + zσp = 0.09 + 3 x 0.064 = 0.282

LCLp = - zσp = 0.09 - 3 x 0.064 = -0.102 = 0
 p-Chart

p-Chart
0.3

0.25

0.2

0.15

0.1

0.05

0
1 2 3 4 5

p p bar UCL LCL

 Control Charts for Attributes

 c-charts – A chart is used for controlling the number of

defects when more than one defect can be present in a
service or product.

• The mean of the distribution is and the

standard deviation is

UCLc = c + z  c LCLc = c – z  c
 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 below:
No. of
Week
Complaints
1 3
2 2
3 3
4 1
5 3
6 3
7 2
8 1
9 3
10 1
Total 22
 c-Chart

c = 22/10 = 2.2
UCLc = c + z  c = 2.2 + 3 x  2.2 = 6.65
LCLc = c - z  c = 2.2 - 3 x  2.2 = -2.25 = 0
c-Chart
7

0
1 2 3 4 5 6 7 8 9 10

c c bar UCL LCL

 Work Measurement

Work measurement is the process of establishing the

time that a given task would take when performed by
a qualified worker working at a defined level of
performance.
There are various ways in which work may be
measured and a variety of techniques have been
established.
 Work Measurement

The basic procedure, irrespective of the particular

measurement technique being used, consists of three
stages;
 an analysis phase in which the job is divided into
convenient, discrete components, commonly known as
elements;
 a measurement phase in which the specific measurement
technique is used to establish the time required by a
qualified worker working at a defined level of performance
to complete each element of work;
 a synthesis phase in which the various elemental times are
added together with appropriate allowances to construct
the standard time for the complete job.
 Work Measurement Techniques

Various techniques of work measurement are:

Time study (stop watch technique),
Work sampling,
Synthesis,
Predetermined motion and time study,
Analytical estimating.

Time study and work sampling involve direct

observation and the remaining are data based and
analytical in nature. 
 Work Measurement Techniques

Time study (stop watch technique)

A work measurement technique for recording the
times and rates of working for the elements of a
specified job carried out under specified conditions.
It is used for analysing the data so as to determine
the time necessary for carrying out the job at the
defined level of performance.
 Work Measurement Techniques

Work sampling: 
A technique in which a large number of observations
are made over a period of time of one or group of
machines, processes or workers.
Each observation records what is happening at that
instant and the percentage of observations recorded
for a particular activity, or delay, is a measure of the
percentage of time during which that activities delay
occurs. 
 Work Measurement Techniques

Synthetic data: 
A work measurement technique for building up the
time for a job or plans of the job at a defined level of
performance by totaling element times obtained
previously from time studies on other jobs
containing the elements concerned or from synthetic
data. 
 Work Measurement Techniques

Predetermined motion time study (PMTS): 

A work measurement technique whereby times
established for basic human motions (classified
according to the nature of the motion and conditions
under which it is made) are used to build up the time
for a job at the defined level of performance.
 Work Measurement Techniques

Analytical estimating: 
A work measurement technique whereby the time
required to carry out elements of a job at a defined
level of performance is estimated partly from
knowledge and practical experience of the elements
concerned and partly from synthetic data. 
 Business Process Reengineering

 Process Reengineering: the fundamental rethinking

and radical redesign of the business process.
 Can boost efficiency by directing efforts to activities
that add value to the good or service produced.
 While Kaizen focuses on continuous enhancements,
process reengineering considers wholesome change.
 Top managers must support operations enhancement
tools for them to be accepted by workers.
 Usually, a successful operations change means a
complete change in the organizational culture.
 Without a supporting culture, change will not succeed.
 Business Process Reengineering

The five major steps involved in BPR are:

 Refocus the company values on customer needs.

 Redesign core processes of a business.

 Recognize that a business consist of cross

functional teams which have individual
responsibilities.
 Rethink about the basic organizational and people
issues.
 Improve the business process across the
organization.
What is a Kanban?

Kanban

A Japanese word
meaning “card” or
“visible record” that
refers to cards used to
control the flow of
production through a
factory
 Kaizen

Kaizen is the practice of continuous

improvement.
Kaizen was originally introduced to the
West by Masaaki Imai in his book Kaizen:
The Key to Japan’s Competitive Success in
1986.
Today kaizen is recognized worldwide as an
important pillar of an organization’s long-
term competitive strategy.
 Kaizen

Kaizen is based on certain guiding principles:

Good processes bring good results
Go see for yourself to grasp the current situation
Speak with data, manage by facts
Take action to contain and correct root causes of
problems
Work as a team
Kaizen is everybody’s business
One of the most notable features of kaizen is
that big results come from many small changes
accumulated over time.