QUALITY MANAGEMENT AND SPC

Renfro India
QUALITY MESSAGE
▪ The market is becoming more and more
competitive and quality focused. Quality is no
longer a differentiator. It has become a basic
requirement.

Guenter Butschek, CEO and MD, Tata Motors,

2016
HISTORY OF QUALITY MANAGEMENT
▪ Rooted in Post-World war II Japan
▪ Japanese in an effort to build their nation adopted the US
manufacturing practices
▪ Embraced and suppported the work of two American
researchers: Joseph Juran (1904-2008) and W Edwards
Deming (1900-1993)
▪ Juran blamed the culture of the firm and management
for poor quality
▪ Deming developed SPC for industries
▪ Japanese industry leaders embraced the idea that
efforts to improve quality can actually reduce costs
HISTORY OF QUALITY MANAGEMENT
▪ By 1970s and 1980s, US market was invaded by
Japanese electronic and automobile products
▪ Toyota was already using advanced quality
management system, and TPS became the
international superstar of manufacturing practice
▪ In late 1980s, Motorola developed the Six Sigma
(SS) approach, others (GE, Seagate, AlliedSignal)
adopted SS
▪ TQM, another well-known method adopted by
industry
WHAT IS QUALITY?
▪ Degree to which performance of a product or
service meets or exceeds customer expectations
▪ Performance - Expectations>0, performance has
exceeded customer expectations
▪ Performance = Expectations, expectations have
been met
▪ Performance – Expectations <0, expectations
have not been met
WHAT IS QUALITY MANAGEMENT?

▪Set of activities that an organization performs

to maintain and improve the quality of its
products and services
PERFORMANCE AND CONFORMANCE
QUALITY
▪ Different kinds of quality
▪ Performance quality
▪ Refers to the ability of the product to excel along
one or more performance dimensions
(“attributes”)
▪ Conformance quality
▪ Because of inherent variability in production
processes, nothing is produced exactly according
to specifications. The degree of match between
specifications and the actual product or service is
what we call as conformance quality
QUALITY ARTICLE
▪ “Competing on eight dimensions of quality” (Harvard Business
Review, Nov-Dec 1987) by David Garvin
DIMENSIONS OF QUALITY: MANUFACTURED
PRODUCTS
Product quality is often judged on eight dimensions:

▪ Performance – primary product characteristics

▪ Features – secondary characteristics that supplements the
primary characteristics
▪ Reliability – How often does the product fail? Consistency of
performance
▪ Conformance to standards – meeting design specifications
▪ Durability – How long the product lasts; its life span before
replacement
▪ Serviceability – ease of repair, speed of repair
▪ Aesthetics – sensory characteristics (sound, feel, look)
▪ Perceived Quality – past performance, reputation,
recognition
ARTICLE – KEY POINTS
▪ Eight dimensions of quality
▪ Companies need not pursue all eight dimensions
▪ If pursued, products become costly
▪ Companies need to find what dimensions customers
care for and work on those dimensions
▪ Proper market research is key
QUALITY GURUS
▪ Walter Shewart
▪ W. Edward Deming
▪ Joseph Juran
▪ Armand V. Feigenbaum
▪ Philip Crosby
▪ Kaoru Ishikawa
▪ Taguchi
KEY CONTRIBUTORS TO QUALITY
MANAGEMENT
Shewart Control Charts
Deming 14 points, special vs. common cause
variation

Juran Quality is fitness-for-use

Feigenbaum Customer defines quality
Crosby Quality is free, zero defects
Ishikawa Cause-and-effect diagrams
Taguchi Taguchi loss function
Ohno and Shingo Continuous improvement
MODERN DEFINITION OF QUALITY
▪ Quality is inversely proportional to variability
Reduction of variability is the fundamental idea in
quality control.
DESCRIBING VARIABILITY
▪ Measures of variability (or spread out)
▪ Range
▪ Variance and the standard deviation
▪ Stem-and-leaf plot
▪ Histogram
▪ Box Plot
▪ Coefficient of variation
QUALITY IMPROVEMENT
▪ Quality improvement is the reduction of variability in
processes and products
DESCRIBING VARIABILITY
▪ Stem-and-leaf display (Graphical display about a data
set)
▪ Shape
▪ Spread
▪ Central tendency

▪ Box Plot (Graphical Display)

▪ Central tendency
▪ Spread or variability
▪ Departure from symmetry
▪ Identification of outliers

▪ Histogram
▪ Same as above
COEFFICIENT OF VARIATION
▪ Coefficient of Variation, c = σ / µ
▪ Where σ = standard deviation
µ = mean

▪ If c<0.75 , low variability

▪ If 0.75 <= c <=1.33, moderate variability
▪ If c >= 1.33, High variability
WHERE IN THE PROCESS TO INSPECT?

▪ Raw materials and purchased parts

▪ Finished products
▪ Before a costly operation or where significant
value is added to the product
▪ Before an irreversible process
▪ Before a covering process

Note: Inspection is an appraisal activity that compares goods and services to a

standard
HOW MUCH TO INSPECT AND HOW OFTEN?
▪ The amount of inspection can range from no inspection
whatsoever to inspection of each item.
▪ Low –cost, high volume items require less inspection
▪ High-cost, low volume items require intensive inspection
▪ Majority of the quality control applications lie somewhere
between the two
▪ Most require some inspection, but it is neither possible nor
economically feasible to examine every part of a product or every
aspect of a service for control purposes

As a rule, operations with high proportion of human involvement necessitate

more inspection than mechanical operations
COSTS OF QUALITY
▪ Prevention Costs (costs associated with tasks intended to prevent
defects from occurring)
▪ Quality Planning (developing & implementing quality management
program)
▪ Process monitoring
▪ Training
▪ Purchasing better equipment that produces less variation
▪ Working with vendors to increase the quality of input materials
▪ Process redesign to reduce errors
▪ Quality data acquisition and analysis
▪ Quality improvement projects
COSTS OF QUALITY
▪ Appraisal Costs (assessing the condition of
materials and processes at various points in
process)
▪ Inspection and testing of incoming materials
▪ Product inspection and test at various stages
▪ Maintaining accuracy of test equipment
(calibration)
▪ Laboratory testing

Costs of quality estimated to be between 15%-20% of sales at most companies

Crosby
COST OF QUALITY
▪ Internal failure costs (defects discovered before shipment)
▪ Scrap
▪ Rework
▪ Process downtime
▪ Retest
▪ Failure analysis
▪ Disposition
▪ External failure costs (defects discovered after shipment)
▪ Customer complaint
▪ Warranty charges
▪ Liability costs
▪ Returned product/material

External and internal failure costs together accounted for 50%-80% of COQ
Juran
THE COSTS OF QUALITY
COST OF QUALITY
QUALITY COST TREND PREDICTION AS A
FUNCTION OF TIME
COST OF QUALITY

It is estimated that the cost to fix a problem at the customer end is about 5 times the
cost to fix a problem at the design stage
COST OF QUALITY
Ce + Ci + Ca + Cp
▪ Cost of Quality= --------------------------------------
Cb + Ce + Ci + Ca + Cp
Ce = External failure cost
Ci = Internal failure cost
Ca = appraisal cost
Cp = prevention cost
Cb = measured base production cost ( no costs for quality)
CONSEQUENCES OF POOR QUALITY
▪ Loss of business
▪ Liability
▪ Productivity
▪ Costs
PROCESS CONTROL
▪ Starts with measuring an important variable. This
can be a
▪ Product attribute
▪ Diameter of a metal component, weight of a bag
of potato chip
▪ Process Attribute
▪ Temperature in a restaurant’s oven, length of
waiting time in a ticket booth, pressure applied
in a molding process
STATISTICAL PROCESS CONTROL (SPC)
▪ A statistical process control involves testing a random
sample of output from a process to determine whether
the process is producing items within a pre-selected
range

▪ SPC uses statistical tools to observe the performance of

the production process in order to detect significant
variations before they result in the production of a sub-
standard article.

▪ SPC is about monitoring consistency and repeatability of

a process
MAJOR OBJECTIVES OF SPC
▪ Quickly detect the occurrence of assignable
causes of process so that investigation of the
process and corrective action may be
undertaken before non-conforming units are
manufactured

▪ Reducing variability in the process

WHY QUALITY PROBLEMS?
▪ Variation in output is due to two
reasons:

▪ Common Cause or random variation

▪ Assignable or Special cause or

controllable variation
STATISTICAL PROCESS CONTROL TOOLS (SPC)
▪ Variation in output is due to:
▪ Common causes (also known as natural
variation)
▪ Inherent variation present in every process
▪ Causes may difficult to distinguish or wholly unidentifiable
▪ Resulting degree of variation is minor

▪ Assignable causes (known as special variation)

▪ Variations due to specific causes

▪ A process subject to assignable variation is out of

control
STATISTICAL PROCESS CONTROL TOOLS
(SPC)
▪ Control (or in control or stable)
▪ A process that exhibits only common cause variation is said to be in
control or stable
▪ A process is said to be out of control when it exhibits
assignable variation
▪ Examples: less experienced worker has replaced an experienced
worker, machine malfunctioning, change of machine settings
CONTROL CHARTS
▪ A control chart is a time ordered plot of sample statistics
▪ Sometimes called “the voice of the process”
▪ Graphical display of a quality characteristics (for example, level of
beer in each bottle in a bottling plant)
▪ Distinguish between random and non-random variability
▪ Chart contains a center line and two limits
▪ Upper control limit
▪ Lower control limit

▪ If the process is in control, all sample points will fall between them
▪ As long as points fall within control limits – the process is in
statistical control
▪ However, any point outside limits – investigate the assignable
causes
CONTROL CHARTS
▪ If all the points plot inside the limits, but
behave in a nonrandom manner – indication
that process is out of control and needs
investigation
A CONTROL CHART
QUALITY CONTROL CHART
QUALITY CONTROL CHART
IN STATISTICAL CONTROL
▪ A process that is operating with only chance cause of variation
present is said to be in statistical control
▪ If the process is in control, all the plotted points should have an
essentially random pattern
REASONS FOR POPULARITY OF CONTROL
CHARTS
▪ Proven technique for improving productivity
▪ Effective in defect prevention
▪ Prevents unnecessary process adjustment
▪ Provides diagnostic information
▪ Provides information about process
capability
STATISTICAL PROCESS CONTROL TOOLS
▪ Control Charts for variables (Characteristics that are expressed on a
numerical scale: density, weight, diameter, resistance, length, time,
volume)
▪ X-bar Chart and R-Chart
▪ X-bar chart for process average
▪ R-chart for process variability

▪ Control Charts for attributes (characteristic that can’t be measured on

a numerical scale: smell of cologne acceptable or not acceptable,
color of a fabric acceptable or not)
▪ p-chart and c-chart
▪ p-charts for percent defective in a sample
▪ c-charts for counts (e.g. # of defects)
SPC TOOLS
▪ Control Charts for variables (X-chart, R-Chart)
▪ Variables data are measured on continuous scale
▪ Length
▪ Width
▪ Weight
▪ Voltage
▪ Viscosity
▪ Amount of time needed to complete a task
R-CHART CONTROL LIMITS

D3, D4 = constants that provide 3 standard deviations (3σ) limits

for a given sample size
X-BAR CHART LIMITS

A2 = constant to provide three sigma limits for the sample mean

STEPS IN DEVELOPING X-BAR AND R-CHART
▪ Collect data on the variable measured (time, weight,
diameter). Collect at least 20-25 samples randomly.
Sample size should be of 4 to 5 units.
▪ Compute range for each sample, and average R-bar
▪ Calculate the UCL and LCL
▪ Plot the sample ranges. If all are in control, process is
in statistical control
▪ Calculate UCL and LCL for x-bar chart
▪ Plot the sample means. If all are in control, process is
in statistical control.
CONTROL LIMITS ARE BASED ON
SAMPLING DISTRIBUTION
ZONES FOR IDENTIFICATION OF
NONRANDOM PATTERN
CONTROL CHART PATTERNS
CONTROL CHART PATTERNS
PATTERN RECOGNITION IN CONTROL
CHARTS
▪ Recognizing non-random patterns on the
control chart
▪ One point plots outside 3σ limits
▪ Two or three consecutive points plot beyond 2σ limits
▪ Four out of 5 consecutive points plot at a distance of 1σ or beyond
from the centre line
▪ Eight consecutive points on one side of centre line
P-CHART
▪ Control charts for attributes (quality characteristics that are counted
rather than measured)
▪ p-chart measures % defective items or proportion defective items
in a sample

Total # defects from all samples

▪ p-bar = ----------------------------------------
# samples × Sample size
▪ Appropriate when data consists of two categories of items
▪ Good or bad, pass or fail
▪ Examples: # bad light bulbs and good light bulbs in a given lot
▪ # of bad glass bottles and good glass bottles
P-CHART LIMITS
C-CHART
▪ Appropriate when number of defects are counted
because not possible to compute proportion
defective
▪ Examples
▪ Number of accidents per day
▪ Number of crimes committed in a month
▪ Blemishes on a desk
▪ Complaints in a day
▪ Typo errors in a chapter of the text book
▪ # customer invoice errors
C-CHART LIMITS

C-bar = average no. of defects per unit = Total number of defects

No of samples
CONTROL CHARTS – TWO ISSUES
▪ ISSUE ONE: SAMPLE SIZE
▪ For attribute control chart, samples should be
fairly large, frequently in the range of 50-300
observations. As a general rule, the sample must
be at least large enough to allow for the detection
of one defective unit.
▪ Control chart for variables require much smaller
sample size, usually in the range of 3 to 10 items
CONTROL CHARTS – TWO ISSUES
▪ ISSUE 2: HOW FREQUENTLY TO SAMPLE
▪ A high volume production process should be sampled frequently
since a large number of defective units could be produced
between samples, provided the cost of sampling is not too high
CONTROL CHART IS SERVICES
▪ In service sector control charts are used to control
the time or the percentage of defects from various
processes – for example, the time it takes to answer a
phone, the time it takes to serve a customer, or time
it takes to collect accounts receivables.

▪ Control charts are also used to monitor and control

the percentage of dissatisfied customers or the
percentage of late payments
PROCESS CAPABILITY
▪ Specifications: A range of values imposed by
designers of the product or service based on
customer requirements
▪ Control limits and based on production process, and
they reflect process variability
▪ Process variability: Natural or inherent variability in
a process due to randomness
▪ Process capability: The inherent variability of
process output relative to the variation allowed by
the design specifications
MEASURES OF PROCESS CAPABILITY

▪ Measures of Process Capability

▪ Process Capability Ratio
▪ Process Capability Index
PROCESS CAPABILITY RATIO
▪ Cp = (Upper Spec – Lower Spec) / 6σ

▪ If Cp < 1, process range > tolerance range

▪ Process not capable of producing within design
specifications
▪ If Cp = 1, Tolerance range and process range are
same
▪ If Cp > 1, Tolerance range > process range
▪ A desirable situation
▪ Ideally Cp > 1.33
PROCESS CAPABILITY
PROCESS CAPABILITY
PROCESS CAPABILITY
▪ Cp does not take into account where the process mean is
located relative to the specifications

▪ Cp simply measures the spread of the specifications relative to

the six sigma spread in the process
PROCESS CAPABILITY INDEX

Generally, if Cp = Cpk, the process is centered at the midpoint of the specifications

When Cpk < Cp, the process is off center

PROCESS CAPABILITY
(SEQUENTIAL STEPS)
1. Calculate Cpk to check centrality
2. Calculate Cp to check whether the process variation are
within design specifications