QUALITY MANAGEMENT

1 Quality Management
  What do you mean by “Interchangeable Parts”? Any Organisation
associated with the same?

 Who is Walter Shewhart? What is his contribution?

 How you define “Quality”? How it is defined by Deming / Juran /

Crosby / Garvin / ISO?

 Difference between Quality Control / Quality Assurance / Total Quality

Control / Total Quality Management/

 What is Japanese approach to making quality as National Movement?



2 Quality Management
 What is the process of implementing TQM in above
cases?

Difference between Certifications and self-assessment?

What is SPC?

Difference between Common Cause and Special

Cause?

What Cost of Poor Quality? With Examples?

3 Quality Management
 EVOLUTION OF QUALITY
MANAGEMENT

4 Quality Management
 EVOLUTION OF QUALITY

TIME DEVELOPMENTS
Prior to 20th Quality is an Art. An era of workmanship
Century
1800s Interchangeable Parts
1924 Walter Shewhart :Statistical Approach to Quality/
Control Charts
1950 Visit of Deming in Japan at the invitation of
K.Ishikawa
1954 TQC in Japan ( Visit of Juran to Japan)
A.V.Feigenbaum conceptualized TQC / Systems Approach
to quality
1961 The Martin (Marietta) Co. in USA introduces the zero-
defects ‘approach’ while developing and producing
Missiles (Philip Crosby’s Approach to Quality).

5 Quality Management
 EVOLUTION OF QUALITY
TIME DEVELOPMENTS
1962-70 The concept of Total Quality is affirmed and devised in Japanese
industries./Quality circle introduced in Japan ( By K. Ishikawa)

1970-80 A large number of US and European corporations are beginning to

appreciate the advance of Japan’s industries.
G.Taguchi popularises the use of environmental design to design
robust systems and products. /
SMED/POKA YOKE – Shigeo Shingo
1987 Introduction of :
•ISO 9000 standard
•Malcolm Baldgridge Excellence Model
•Six Sigma

6 Quality Management
 WALTER A SHEWHART
 40,000 people, out of which 5,200 people were in the
Inspection Department (Western Electric, Hawthorne
Works)
 In 1924 he proposed the Control Chart as a method to
determine when a process was in a state of Statistical
control
 Economic Control of Quality of Manufactured Product,
published in 1931, is regarded as a complete and
thorough exposition of the basic principles of quality
control
 Visited India in 1947-48 under the sponsorship of P. C.
Mahalanobis
 Shewhart is referred to as the “father of statistical quality
control
7 Quality Management
 PHASES OF QUALITY

QUALITY CONTROL (QC) PHASE : QC focuses on product

defect detection through post production inspection. It is
concerned with the adherence to standards and sorting out rejects.

QUALITY ASSURANCE (QA) PHASE : Quality assurance is a

system of activities whose purpose is to provide an assurance that
the overall quality control is in fact being done effectively.(ANSI).
 PHASES OF QUALITY

TOTAL QUALITY CONTROL (TQC)/ CWQC PHASE :

TQC attempt to expand the QA philosophy beyond
manufacturing operations into other areas of organization life.
System of methods (and Organizations) for producing goods
and Services of good quality conforming to customer or
consumers Requirement at the most economical level.

CWQC is a means to provide good and low cost products,

dividing the benefits among the consumers, employers and
stock holders while improving the quality of people’s lives.

9 Quality Management
 PHASES OF QUALITY
Total Quality Management:
Management approach of an Organization ,centered on
quality, based on the participation of all its members and
aiming at long term Success through customer
satisfaction and benefits to all members of the
organization and to the society.(ISO).

10 Quality Management
 SYSTEMS IN QUALITY MANAGEMENT

Evolution of Quality Management (along with Quality

Gurus):

W. Edward Deming / Joseph Juran /Crosby

Ishikawa /Genechi Taguchi/ Shoji Shiva
ISO 9000 standards
The Malcolm Baldrige National Quality Award Criteria
The Six Sigma System

11 Quality Management
 WHAT IS QUALITY
MANAGEMENT

12 Quality Management
 6.50 6.55 7.00

6.55 a.m.  5 minutes.

This man wants to reach his work place by 6.55 a.m.. But he can not
do so, exactly at 6.55 a.m. daily. Sometimes he reaches earlier (but
almost never before 6.50 a.m.). Sometimes he reaches later (but
almost never after 7.00 a.m.). WHY ?

13
 THIS IS BECAUSE....
OF CERTAIN FACTORS WHICH
 Affect the time he takes
 He cannot control
 Vary randomly
e.g. The traffic you encounter under normal course of travel

THE VARIATION THAT OCCURS DUE TO

THESE KIND OF FACTORS IS CALLED
INHERENT VARIATION OR COMMON CAUSE
VARIATION OR WHITE NOISE.
e.g.. m/c vibration,tool wear etc.

14
 UNDER NORMAL SCHEME
OF OPERATION

Maximum deviation
Inherent
Variability
Aimed value
(white noise)

Minimum deviation

15
 PROBABLY BECAUSE :
TODAY HE IS EARLY ! • His watch was running fast.
WHY ? • He got a lift.
• His bus driver took a shortcut.
• He stayed over in the colony.
• He had some important work to be finished
before 7.30.

These causes are characteristic of a specific

circumstance and do not occur in the normal
6.30 scheme of actions.

Variation due to these types of reasons is

called assignable or special cause variation
or black noise

16
 GRAPHICAL DISPLAY OF
VARIABILITIES
CASE I
T
Assignable O
Assignable (Black noise)
Variability T
Variability A
L
Inherent
Variability
Aimed Value V
A
R
I
A
Assignable Assignable B
Variability Variability I
L
I
CASE II CASE III
T
Y
17
 TYPES OF CAUSES
 The variation which is due to natural variability (due to
background noise and cumulative effect of many small, essentially
uncontrollable causes) is called stable system of CHRONIC/
COMMON CAUSES
 The occasional variation which may be present in the output of a
process and generally large when compared to the background
noise and usually Represents an unacceptable level of process
performance. This variation is Called ASSIGNABLE
/SPECIAL /SPORADIC CAUSES.
 The process that is operating with only chance causes of variation
present is said to be in STATISTICAL CONTROL
 A process that is operating in the presence of assignable causes is
said to be OUT OF CONTROL.

18
 TYPES OF CAUSES

COMMON CASUES SPECIAL CAUSES

• Unassignable Causes • Findable Causes
• Chronic to Process • No body knows when it occur
• Difficult to eliminate • Visible to anyone
• Sum of all small causes • Detected in Control Chart
• Many causes contribute • Assignable Causes
little • One or Two causes contribute
to mail

19
 Total Process Variation
Common Cause Variation
nature System Deficiency
Scope of Influence All production output are
affected similarly
Sources Many small sources
Process Behavior Stable and predictable
Improvement action Requires fundamental
change
Responsibility Management
20
Special Cause Variation
Process Detail failure
Not all production output
are affected similarly
A few major sources
Sporadic and unpredictable
Requires point of
production change
Supervisor/ Operators
 Deming’s 14 Points for Management

21 Quality Management
 W. EDWARD DEMING
1927 introduced to Shewhart in Bell Labs
From June–August 1950, Deming trained
hundreds of engineers, managers, and
scholars in statistical process control (SPC)
and concepts of quality
Deming Award
Deming’s 14 Points for Management
Deming’s 7 deadly disease
Deming’s System of Profound Knowledge

22 Quality Management
 QUALITY CHAIN RECATION

23 Quality Management
 Deming’s 14 Points for Management
1. Create constancy of purpose for improvement of Product and
services

2. Adopt the new philosophy

3. Cease dependence on mass inspection

4. End the practice of awarding business on price tag alone

5. Constantly and forever improve the system of production and

service (Improve every process)

6. Institute modern methods of training on the job

7. Institute modern methods of supervision and leadership

8. Drive out fear

24 Quality Management
 Deming’s 14 Points for Management

9. Break down barriers between departments. (Everybody wins if the system wins)

10. Eliminate numerical goals for the workforce

11. Eliminate workstandards and numerical quotas(The focus is not on how many you
make, it is on how well you make them.)

12. Permit pride of workmanship (We need people to have pride in their work, not in
their ability to meet ratings)

13. Encourage education and training

14. Top management commitment and action for all above points

25 Quality Management
 Deming’s 14 points for Management

The way not to depend on mass inspection (point 3) is to

continually improve the process (point 5), to do that you will
need quality supplies (point 4), finding a quality supplier takes
time (point 1), to do so you will need to adopt the philosophy
(point 2). We want our people to work together, but its hard to do
so without point 8, 9, 10, 11 and 12.

26 Quality Management
 JOSEPH M JURAN

Juran is widely credited for adding the human

dimension to quality management
Juran was one of the first to write about the
Cost of Quality
Juran's concept of quality management
extended outside the walls of the factory to
encompass nonmanufacturing processes
This was illustrated by his "Juran trilogy", an
approach to cross-functional management,
which is composed of three managerial
processes: quality planning, quality control
and quality improvement. ( Six Sigma
Programme)
27 Quality Management
 Juran’s Approach
Three Prolonged Approach to maintain this minimum
cost of quality
Breakthrough Projects
Control Sequence
Annual Quality Programme

28 Quality Management
 JURAN TRIOLOGY
QUALITY PLANNING
The process for developing quality goals and a plan to meet them. It involves
understanding customer requirement and creating the process for meeting the
requirement

QUALITY CONTROL
On going measurement of process quality through measuring current performance
and the gap between performance and targets. Action steps are taken to close the
gaps and keep the process in statistical control.

QUALITY IMPROVEMENT
Identifying improvement projects based on quality control measurement, organizing
improvement teams, diagnosing and proposing solutions to the problem, proving
their effectiveness and implementing them with quality control measure in place for
the new process.

29 Quality Management

Quality Planning
Determine who the
Customers are
Determine the needs of the
customer
Develop product features
that respond to customer’s
need
Develop processes able to
produce the product feature
Transfer the plans the
operating forces
30 Quality Management
Juran’s Triology
Quality Control Quality Improvement
Evaluate actual product Establish the infrastructure
performance
Compare actual performance Identify the improvement
to product goal projects
Act on the difference Establish project Teams
Provide the teams with
resources, training and
motivation to:
(Diagnose the causes ,
Stimulate remedies,
Establish controls to hold the
gains)
 Phillip Crosby
The Fun Uncle of Quality Management
FOUR ABSOLUTES OF QUALITY

 The definition of quality is conformance to requirements,

which are established by management.

 Quality is reached through prevention. It is therefore

necessary to understand the process and eliminate all
opportunities to make errors.( Failure Modes)

 The performance standard is zero. Thus, even if we do not

reach it, it is important to strive towards zero defects.

 The measurement of quality is the price of non-

conformance.
31 Quality Management
 What is Quality..

The Degree to which a set of inherent characteristics

fulfills the requirement (ISO 9001:2005)

32 Quality Management
 KAORU ISHIKAWA

He was a very influential person in the development of Japanese

attitudes and practices in relation to quality

He is acknowledged as the father of quality control circles

ISHIKAWA’s concept of total quality control contains six

fundamental principles :
1. Quality First – not short term profits first
2. Consumer orientation – Not producer orientation
3. The next process is your customer– breaking down the barriers of
sectionalism
4. Using facts and data to make presentations- utilizing of statistical
methods
5. Respect for humanity as a management philosophy, full
participatory management
6. Cross functional management

33 Quality Management
 Japanese Approach to Quality

By 1967 Japanese quality control could be

distinguished from that practiced in West by six
characteristics :
1. Company Wide Quality Control (CWQC)
2. Education and Training in quality control
3. Quality Control Circle Activities
4. Quality Control Audits
5. Utilization of Statistical Methods
6. Nationwide quality

34 Quality Management
 Cost of Quality
Joseph Juran first discussed cost of quality analysis in
1951 in the first edition of Quality Control Handbook.

Armand Feigenbaum identified the four cost categories

in 1956 in “Total Quality Control” in the Harvard
Business Review, Vol. 34, No 6

Crosby’s categories
• Price of Conformance (POC/COC)
– Prevention costs
– Appraisal costs
• Price of Nonconformance (PONC/CONC)
– Internal defect costs
35 – External defect costs
Quality Management
 PREVENTIVE COST

Costs relate to efforts to prevent failures. These are the costs that are
incurred on preventing a quality problem from arising. The cost of planning,
introduction and maintenance of a quality system, and costs of any action
taken to investigate, prevent or reduce non-conformities or defects would be
included in this category.

Planning Capability Studies Design Review

Vendor Surveys Customer Surveys

Procedure Writing

Market Analysis Training

36 Quality Management
 APPRAISAL COST
APPRAISAL COSTS relate to testing, execution an examination to assess
whether specified quality is being maintained. These are the costs that are
incurred in assessing that the products or service conform to the requirements.
costs can be contained or reduce when there is emphasis on quality
improvement. Also called Detection Cost.

Final Inspection
Drawing Checking

In process Inspection Receiving Inspection

37 Quality Management
 INTERNAL FAILURE COST
INTERNAL FAILURE COSTS: arise due to internal failures.
Such costs result from a product or service failing to meet the
quality requirement prior to delivery. These costs arise within
the organization because of the failure to achieve the specific
quality, before transfer of ownership to the customer.

Redesign Reinspection Repair Costs

Rework Scrap Allowance

Retesting

38 Quality Management
 EXTERNAL FAILURE COST

EXTERNAL FAILURE COSTS: It arises from the rejection of the products or

services by the customers due to poor quality. These are the costs that arise outside
the organization, i.e. after the transfer of ownership to the customer, because of
failure to achieve the quality specified.

Customer Dissatisfaction: Warranty Cost

Pricing Errors

Penalties

39 Quality Management
 COST OF POOR QUALITY CONTRIBUTION

COQ Category Estimated Contribution

Internal Failures 25 to 40 %

External Failures 25 to 40%

Appraisal 10 to 50%

Prevention .5 to 5%

Quality Management 40
 Deming, Juran, Crosby on COQ
• Deming – the cost of nonconformance, and the
resulting loss of good will, is so high that
measuring it is not necessary

• Juran – as defect prevention increases, the cost of

scrap/rework decreases faster. Need to know
where to look

• Crosby – money is the language of management,

you need to show them the numbers

41 Quality Management
 Something to think about
Net profits for many companies is less than 5% of sales
• COPQ on the average is 17% of sales

• COPQ is some companies is as high as 40%

of sales

• COPQ is typically 3 to 6 TIMES as large

as profits

42 Quality Management
Process Capability
Six Sigma
The best performance:

The worst performance:

As you can see, even the best performance has
variation, although small.

VARIATION

Is inevitable in Real life

 Characterization

1 1
68.27%
2 2
95.45%
3 3
99.73%
Do you mean to say, whether you like it or not, 99.73%
of the observations will lie within Average +/- 3 s.d.?
 Characterization of the pattern
Variability is estimated through standard deviation.

Variation /
Standard deviation Mean or Average

 
Center / Location

How do you calculate standard deviation?

PROCESS CAPABILITY
 Historically, the use of the capability indices was first explored within the Ford
Motor Company (1984)
 The first process capability index appeared in the literature as “The precision index
Cp” defined by Kane (1986)
 Finley (1992) refers to this index as CPI (Capability Potential Index)
 Montgomery (1996) uses the term PCR (Process Capability Ratio)

Process capability refers to the natural variation of a process relative to the variation
allowed by the design specifications. It is defined as the ratio of the range of the design
specifications (the tolerance range) to the range of the process variation, which for
most firms is typically 6sigma.
Cp = Tolerance Range/ Process Range
Tolerances are design specifications reflecting customer requirements for a product.
They specify a range of values above and below a designed target value (also referred
to as the nominal value), within which product units must fall to be acceptable.
 PROCESS CAPABILITY

Process Capability
= USL-LSL/6

Mean = 85.8

Standard Deviation = 6.8

65.4 106.2
PROCESS CAPABILITY
PROCESS CAPABILITY

LSL USL
VARIATION
ACTUAL
PERFORMANCE
Vs.
SPECIFICATIONS
Or
Customer Requirements
PROCESS CAPABILITY
A second measure of process capability is the
process capability index (Cpk). The Cpk differs from
the Cp in that it indicates if the process mean has
shifted away from the design target, and in which
direction it has shifted—that is, if it is off center.
Exercise on Cp/Cpk
The Patanjali Food Company packages potato chips in bags.
The net weight of the chips in each bag is designed to be 9.0
oz, with a tolerance of +/- 0.5 oz.
The packaging process results in bags with an average net
weight of 8.80 oz and a standard deviation of 0.12 oz. The
company wants to determine if the process is capable of
meeting design specifications.
Interpretation of Cpk
Cpk < 1.00 Inadequate it indicates that the process is not adequate with
respect to the production tolerances
(specifications), and either process variation
needs to be reduced or process mean

1.00 < Cpk < 1.33 Capable some caution needs to be

taken regarding to the process distribution, and
certain process
control is required.

1.33 < Cpk < 1.50 Satisfactory it indicates that process quality is adequate,
material substitution may be allowed, and no
stringent quality
control is needed.

1.50 < Cpk < 2.00 Excellent it indicates that process quality exceeds
"Satisfactory"
 Actual vs Specified Comparison

Scenario: Specified tolerance

(T) exactly equals to the
process capability, i.e. 6

4 ft. wide vehicle running with

a 4 ft. wide road

6

Tolerance(T) 2700 ppm

LSL USL

Are you comfortable with the status quo? You want to reduce
the variability from  to 1?
 Reduce the variation by improving the process:

Now, the situation is bit

comfortable. 3 ft. wide
vehicle running on 4 ft. wide
road.

Have 1 sigma gap from the

boundaries of the road
1 1 1 1
T=8 1
6 1
Tolerance(T)
LSL USL 64 ppm

Are you comfortable with the status quo? You still want to
further reduce the variability from 1 to 2?
 Reduce the variation by improving the process:

2 ft. wide vehicle

running on 4 ft. wide
road
Have 2 sigma gap from
the boundaries of the
road.

2 2 2 2 T=10 2

6 2
Tolerance(T)
LSL USL 0.6 ppm
Looking for reducing variability further 2 to 3 ?
 Six Sigma without Shift:

Oh, Yes!
You have got it!!!

3 3 3 3
T=12 3

6 3 0.002 ppm
Tolerance(T) or 2 ppb
LSL USL
Wait a bit! Every time you are assuming that average has always
been maintain at target. Is it practical? What happens if the
average shifts to a distance of 1.5 3 from the target to the worse
side?
Process Shift
The reason for this discrepancy was determined by Motorola
in their early days in developing Six Sigma. Motorola
determined , through their own experience that process drifts
overtime and they referred to this phenomenon as “Long
Term Dynamic Mean Variation”. This variation generally
falls between 1.4 to 1.6 sigma.
 Six Sigma with Shift (Short-term):
Let us assume, average can go as away as 1.5 times s.d.
from the target.

T=12 3
(with 1.5 3 shift)

3.4 ppm
4.5 3 1.5 3 1.5 3
Today we thought that
the sigma level to be of
6 3 Six, in the long run it
Tolerance(T)
LSL USL becomes 4.5 .
 Six Sigma as a Goal

Sigma Rating PPM

2 308,537
3 66,807
4 6,210
5 233
6 3.4
Process Defects per
Capability Million Opportunities

The Sigma scale of measure is perfectly correlated to such

characteristics as defects-per-unit, parts-per-million defective,
and the probability of a failure/error.
Understanding the Impact of Six Sigma Quality

ERROR 3 Sigma Process 6 Sigma Process

Wrong drug prescription 5400 every year. 1 in every 25 years
Unsafe drinking water 2 hours each month 1 second every 16 years.

No TV transmission 27 minutes each 6 seconds in year

week
Short or long landing at an 5 per day 1 in 10 years
average airport
Incorrect surgical 1350 per week 1 in 20 years
operations.
Articles of mail lost 54000 per hour 35 per year
 SIX SIGMA MEASURE
Unit = The item produced or processed
Defect = Any event that does not meet a customer specification
DPU = Defects per Unit is the average number of defects observed
when sampling a population ( Total No. of Defects / Total population)
DPO = Defects per Opportunity (Defects per Opportunity is the
probability of units produced with zero defects by the process.
DPMO : Defects per Million Opportunities. DPMO is considered
long-term measurement of a process and this can be directly
converted
D: No. of defects /O: No. of opportunities for a defect /
U: No. of units /
TOP: Total number of opportunities = U * O, /
DPO= D/TOP
Example of a Nail
 The Process Sigma Scale
Process
DPMO Sigma
308,537 2
66,807 3
Increase in Process
6,210 4
Sigma requires 233 5
exponential defect
reduction 3.4 6
Defects per Process
Million Capability
Opportunities

(distribution shifted ±1.5 s)

Yield
Process sigma can be
Process
calculated on either the Step 1

number of items that make it

through defect-free the “first
time through” or on the final No
number of items that are Correct? Errors
reworked
defect-free once errors are
corrected
Yes

In most situations, it makes

sense to base sigma
calculations on First Pass
Yield First Pass Yield = Final Yield =
Number of items Number of items that
that make it through are defect free
error-free (no AFTER errors are
corrections) corrected
SIX SIGMA MEASURE
THROUGHPUT YIELD: Probability of producing a defect free
component. Throughput Yield measures the ability of the process to
produce defect-free units

ROLLED THROUGHPUT YIELD: Is a multiplication of throughput

yields of each process step that a product goes through. If we calculate
the Throughput Yield for n process steps as Yt1, Yt2, Yt3,…..Ytn,
then:
RTY = Yt1 * Yt2 * Yt3…Ytn
Rolled Throughput Yield (RTY)
Example:
There are six possible Critical to Quality steps required to
process a customer order, with the Throughput Yields of
99.7%, 99.5%, 95%, 89%, 92.3%, 94%. The Rolled
Throughput Yield is calculated as:
 RTY = 0.997 * 0.995 * 0.95 * 0.89 * 0.923 * 0.94 = 0.728

It is interesting to see how bad the Throughput Yield will be,

even though none of the CTQ steps are that bad. It all adds
up! You can see that as processes become more complex (i.e.
more CTQ steps), the defect rates can climb rather quickly.
How to Calculate Process Sigma
1) Compute actual First Pass Yield
Yield = (
1–
defects
)
total opportunities
x 100

(total opportunities = number of units x opportunities per unit)

2) Look up Yield in Process Sigma Table

EXAMPLE: 100 units
5 opportunities
7 defects

7
Yield = 1 –( 5 x 100 ) x 100

= (1 – .014) x 100 = 98.6% = 3.7 s

Calculating Process Sigma
1. Determine number of defect opportunities O=
5
______
per unit

2. Determine number of units processed N= 100

______

3. Determine total number of defects D= 7

______
made (include defects made and later fixed)
D .014
4. Calculate Defects Per Opportunity DPO= = ______
NxO

5. Calculate Yield Yield = (1-DPO) x 100 = 98.6

______

6. Look up Process sigma in the Process Sigma Table

Process Sigma =
3.7
______
Exercise
An insurance company has collected data of
particular category of insurance proposals. In the
last 3 months , 101 errors were noticed in 600 of
these proposals. A proposal can have three types of
errors . What is the probability of an error free
proposal. What is the sigma level of the process.