F O U R T H E D I T I O N

Quality Control Tools for

Improving Processes
The McGraw-Hill Companies, Inc., 2003
supplement 6
DAVIS

AQUILANO

CHASE












PowerPoint
Presentation
by
Charlie
Cook

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S62
Supplement Objectives
Introduce the different quality control tools that are
used in analyzing and improving the quality of
processes.
Describe in detail the two major approaches (that is,
acceptance sampling and statistical process control)
in which statistical analysis can be used to improve
process quality.
Define the two different types of errors that can occur
when statistical sampling is used.
Distinguish between attributes and variables with
respect to the statistical analysis of processes.

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S63
Supplement Objectives (contd)
Discuss Taguchi methods and how they are different
from traditional statistical quality control methods.
Describe the quantitative methodology behind six
sigma.

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S64
The Basic Quality Control Tools
Seven Basic Quality Control (QC) Tools
Process flowcharts (or diagrams)
Bar charts and histograms
Pareto charts
Scatterplots (or diagrams)
Run (or trend) charts
Cause-and-effect (or fishbone) charts
Statistical process control

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S65
Checksheet for Recording Complaints
Exhibit S6.1

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S66
Checksheet for Group Sizes in a Restaurant
Exhibit S6.2

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S67
Bar Chart of Daily Units Produced
Exhibit S6.3

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S68
Histogram of Hole Diameters
Exhibit S6.4

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S69
Pareto Chart of Factors in an Emergency Room
Exhibit S6.5

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S610
Scatterplot of Customer Satisfaction and
Waiting Time in an Upscale Restaurant
Exhibit S6.6

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S611
Run Chart of the Number of Daily Errors
Exhibit S6.7

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S612
Cause-and-Effect Diagram for
Customer Complaints in a Restaurant
Exhibit S6.8

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S613
Statistical Analysis of Processes
Statistical Analysis
Requires less labor (reduces costs)
Useful when testing destroys products
Categories of Statistical Tools
Acceptance sampling
Assesses the quality of parts or products after they
have been produced.
Statistical process control
Assesses whether or not an ongoing process is
performing within established limits.

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S614
Attributes and Variables
Types of Data
Attribute data
Data that count items, such as the number of defective
items in a sample.
Variable data
Data that measure of a particular product characteristic
such as length or width.


Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S615
Statistical Quality Control Methods
Exhibit S6.9

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S616
Sampling Errors
Type I ( Error or Producers Risk)
Occurs when a sample says parts are bad or the
process is out of control when the opposite is
true.
The probability of rejecting good parts as scrap.
Type II ( error or Consumers Risk)
Occurs when a sample says parts are good or
the process is in control when the reverse is
true.
The probability of a customer getting a bad lot
represented as good.

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S617
Types of Sampling Errors
Exhibit S6.10

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S618
Acceptance Sampling
Designing a Sampling Plan for Attributes
Costs to justify inspection
Costs of not inspecting must exceed costs of
inspecting.
Purposes of sampling plan
Find quality or ensure quality is what it is supposed to
be.
Acceptable quality level (AQL)
Maximum percentage of defects that a company is
willing to accept.



Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S619
Attribute Sampling
Defining an Attribute Sampling Plan
N: number of units in the lot
n: number of units in the sample
c: the acceptance number (the maximum
number of defectives allowed in the sample
before the whole lot is rejected.
LTPD
Lot tolerance percentage defective: the
percentage of defective units that can be in a
single lot.

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S620
Excerpt from a Sampling Plan Table
for = 0.05, = 0.10
Exhibit S6.11

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S621
Operating Characteristic Curves
Operating Characteristic (OC) Curves
Curves that illustrate graphically the probability
of accepting lots that contain different percent
defectives.





Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S622
Operating Characteristic Curve for AQL=.020,
= 0.05, LTPD= 0.80, = 0.10
Exhibit S6.12

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S623
Developing a Sampling Plan for Variables
Control Limits
Points on an acceptance sampling chart that
distinguish the accept and reject region(s).
Also, the points on a process control chart that
distinguish between a process being in or out of
control.
Factors to Consider in Designing a Plan
The probability of rejecting a good lot ( error)
The probability of accepting bad lot ( error)
The size of the sample (n)

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S624
Establishing Control Limits for Acceptance
Sampling Using Variables
Exhibit S6.13

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S625
Determining the Probability of Committing a
Type II error ( error)
Exhibit S6.14

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S626
Statistical Process Control
Statistical Process Control (SPC)
A quantitative method for determining whether a
particular process is in or out of control.
Central Limit Theorem
Sample means will be normally distributed no
matter what the shape of the distribution.
Variation
Random variation
Nonrandom (assignable) variation


Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S627
Areas Under the Normal Distribution Curve
Corresponding to Different Numbers of
Standard Deviation from the Mean
Exhibit S6.15

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S628
Control Chart Evidence for Investigation
Exhibit S6.16a
Source: Bertrand L. Hansen, Quality Control: Theory and Applications, 1963, p.
65. Reprinted by permission of Prentice Hall, Inc., Englewood Cliffs, NJ.

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S629
Control Chart Evidence for Investigation
(contd)
Exhibit S6.16b Source: Bertrand L. Hansen, Quality Control: Theory and Applications, 1963, p.
65. Reprinted by permission of Prentice Hall, Inc., Englewood Cliffs, NJ.

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S630
SPC Using Attribute Measurements
Calculating Control Limits
The centerline for an attribute chart is the long-
run average for the attribute in question.
p-chart: percent defective chart
Centerline =
p
= Long-run average
Standard deviation of sample =
Upper control limit = UCL=
p
s p 3 +
( )
n
p p
s
p

=
1
p
s p 3 Lower control limit = LCL=

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S631
Variable Measurements Using
X-bar and R Charts
Variable Data
Data that are measured, such as length or
weight.
Main Issues
Size of Samples
Number of Samples
Frequency of Samples
Control limits

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S632
Constructing X-bar Charts
X-bar Chart
A chart that tracks the changes in the means of
the samples by plotting the means that were
taken from a process.
n
X
X
n
i
i

=
=
1
Total number of items in the sample
Item number
Mean of the sample
=
=
=
n
i
X
m
X
X
m
j
j

=
=
1
Total number of samples
Sample number
The average of the means of the samples
=
=
=
m
j
X

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S633
Constructing R Charts
R Chart
A chart that tracks the change in the variability
by plotting the range within each sample. The
range is the difference between the lowest and
highest values in that sample.
m
R
R
m
j
j

=
=
1
Total number of samples
Difference between the highest
and lowest values in sample j

Average of the measurement
differences R for all samples

=
=
=
m
R
j
R

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S634
Exhibit S6.17
Note: All factors based on the normal distribution.
Source: E. L. Grant, Statistical Quality Control, 6th ed. (New York:
McGraw-Hill, 1988). Reprinted by permission of McGraw-Hill, Inc..

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S635
Exhibit S6.18

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S636
Exhibit S6.19
Chart R
and Chart X

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S637
A Framework for Applying Different
Quality Control Tools
Exhibit S6.20

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S638
Six Sigma
Process Capability
A comparison of control chart limits to design
specification limits to determine if the process
itself is (or is not) capable of making products
within design specification (or tolerance) limits.
Process capability ratio
C
p
=
Upper tolerance
limit
-
Lower tolerance
limit
6s

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S639
Six Sigma
Capability Index
A calculation to determine how well the process
is performing relative to the target dimensions:
is the process closer to the upper specification
limit (USL) or the lower specification limit (LSL).
Capability Index
(

=
s
X USL
s
LSL X
C
pk
3
,
3
min

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S640
Reducing Process Variance So that All Parts
Are within Specification (Tolerance)*
Exhibit S6.21a
*Tolerance: The range within which all individual measurements of units produced is desired to fall.
Source: Robert W. Hall, Attaining Manufacturing Excellence: Just-in-Time Manufacturing, Total Quality, Total People
Involvement (Homewood, IL: Dow Jones-Irwin, 1987), p. 66. By permission of The McGraw-Hill Companies.

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S641
Reducing Process Variance So that All Parts
Are within Specification (Tolerance)* (contd)
Exhibit S6.21b
*Tolerance: The range within which all individual measurements of units produced is desired to fall.
Source: Robert W. Hall, Attaining Manufacturing Excellence: Just-in-Time Manufacturing, Total Quality, Total People
Involvement (Homewood, IL: Dow Jones-Irwin, 1987), p. 66. By permission of The McGraw-Hill Companies.

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S642
The Goal of Six Sigma
Exhibit S6.22

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S643
Impact of 1.5o Shift on 3o Process
Exhibit S6.23a

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S644
Impact of 1.5o Shift on 6o Process
Exhibit S6.23b

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S645
Defect Rates for Different Levels of
Sigma (o) Assuming a 1.5 Shift in
Actual Mean from Design Mean
Exhibit S6.24

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S646
Taguchi Methods
Taguchi Methods
Used for identifying the cause(s) of process
variation that reduces the number of tests that
are necessary.
Use to conduct experiments to determine the
best combinations of product and process
variables to make a product at the lowest cost
with the highest uniformity.
Quality loss function
Relates the cost of quality directly to variation in a
process.
Any deviation from target quality is a loss to society.

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S647
A Traditional View of the Cost of Variability
Exhibit S6.25

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S648
Taguchis View of the Cost of Variability
Exhibit S6.26

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S649
Exhibit CS6.1
Why Customers Has to Wait

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S650
Exhibit CS6.2
Cause and Effect Diagram

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S651
Exhibit CS6.3A
Causes of Callers Waits
ChecklistDesigned to identify the problems

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S652
Exhibit CS6.3B
Causes of Callers Waits (contd)
Reasons Why Callers Had to Wait

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S653
Exhibit CS6.3C
Causes of Callers Waits (contd)
Reasons Why Callers Had to Wait
(Pareto Diagram)

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S654
Exhibit CS6.4A
Effects of QC
A. Effects of QC (Comparison Before and After QC)
Total number Daily average
Reasons why callers had to wait Before After Before After
A One operator (partner out of the office) 172 15 14.3 1.2
B Receiving party not present 73 17 6.1 1.4
C No one present in the section receiving the call 61 20 5.1 1.7
D Section and name of receiving party not given 19 4 1.6 0.3
E Inquiry about branch office Locations 16 3 1.3 0.2
F Others 10 0 0.8 0
Total 351 59 29.2 4.8
Period: 12 days from Aug. 17 to 30.
Problems are classified according to cause and presented in order of the amount of time
consumed. The are illustrated in a bar graph. 100% indicates the total number of time-
consuming calls.

Fundamentals of Operations Management 4e The McGraw-Hill Companies, Inc., 2003 S655
Exhibit CS6.4b
Effects of QC (contd)