The Importance of

Understanding Type I
and Type II Error in
Statistical Process
Control Charts

Phillip R. Rosenkrantz, Ed.D., P.E.

California State Polytechnic University
Pomona
ASQ Orange Empire Section
October 11, 2016
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Goals

 Provide a brief review of the concepts of process control

and process capability

 Explain Type I and Type II error with colorful examples

 Give examples of Type I and Type II error for common

decision rules

 Illustrate how the improper use of decision rules creates

excessive Type I error and creates mistrust in the use of
SPC

 Suggest simple approaches for reducing Type I error in SPC

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Assignable vs. Common Cause

Variation

 Dr.
Walter Shewhart developed Statistical Process
Control (SPC) during the 1920s. Dr. W. Edwards
Deming promoted SPC during WWII and after.

 Premiseis that there are three types of variation

 Common Cause Variation
 Assignable (or Special Cause) variation
 Tampering (or over-adjusting)

 Eachof these types of variation require a different

approach or type of action.
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Quinconx Demonstration

 Common cause (natural) variation - Built-in random

variation in the system. Difficult to reduce without changing
the system or process. Responsibility of management
because they are responsible for the system.
 Assignable or Special cause variation - Variation caused
by identifiable events usually under control of the work
group
 Tampering - Over adjusting of the process resulting in
increased variation.
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Common Cause vs. Assignable

Cause Variation

 According to Dr. Deming’s research, more than 85% of

problems are the result of “common cause” variation.
Management is responsible for the system and it is
their responsibility to work on reducing this type of
variation. Later research puts the estimate at over
94%.
 Thework group is responsible for preventing and
reducing “assignable cause” variation.
 Management needs to understand these concepts.
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Tampering – The Third Type of

Variation
 Tampering is over-adjusting the system caused by a
lack of understanding of variation.
 Sometimes large built in variation is mistaken for a
process going “out of calibration” and needing
adjustment
 Over adjusting actually increases variation by adding
more variation each time the process is changed
 Tampering is a difficult habit to break because many
machine operators consider it their “job” to constantly
adjust their machine.

 SPC reduces or eliminates unnecessary adjustments.

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Major Concept #1: Process

Capability
 Theability of a process to produce within
specification limits
 Able to produce within specifications – process is
“capable”
 Not able to produce within specifications – “not
capable”

 Oftenquantified with process capability

indices
 Cp,Pp – Ability to stay within specs if centered
 Cpk, Ppk – Ability based on current distribution
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Major Concept #2: Process Control

Process Control refers to how stable and

consistent the process is.
 “In-control”- stable and only experiencing systematic or
“common cause” variation.
 “Not in-control” – Process is not stable. Mean and
variation are changing due to identifiable or “special”
causes (usually controllable by those running the
operation).

 Represents <10% of the problems

Process Capability
What it is
Process Control
Note - no reference to
specs !
In Control
(Special Causes Eliminated)

Out of Control
(Special Causes Present)

Process Capability

In Control and Capable

(Variation from Common
Lower Spec Limit
Causes Reduced)
Upper Spec Limit

In Control but not Capable

(Variation from Common Causes
Excessive)
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Control Charts

 WalterShewhart developed control charts that help

management and workers identify common cause and
special cause variation
 Management’s responsibility to reduce common cause
variation
 The work group is primarily responsible for controlling special
or assignable cause variation

 Smallsamples are taken periodically with statistics (e.g.,

average, range) plotted on charts and reveal the amount
and type of variation. Control limits are traditionally +/- 3
standard deviations from the process average.
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Sample Statistical Process Control

(SPC) Chart
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Use of Control Charts

When the process remains within control limits

with only a random pattern, process variation can
be attributed to common cause variation (random
variation in the system) and is deemed “in
control.” The process is stable and continues.
When the process goes beyond control limits or
is non-random, it is assumed that an assignable
cause is present and deemed “out of control.”
The process is not stable and predictable. Find
and eliminate the assignable cause.
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Implementing SPC

 SPC was designed to be a tool for first line workers

to monitor for the presence of assignable causes

 Requires that management not to use results for

evaluating performance, but rather only for
improving processes--otherwise data will be biased

 Impliesthat the work group and support personnel

take time from their other duties to permanently
eliminate assignable causes that reoccur

 Requires a culture of trust to work effectively

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Where to Use SPC

 Use strategically on:

 Critical customer requirements
 Major problems
 Six Sigma project related processes

 Use tactically on:

 Processes that are not “capable” and need to be
monitored closely
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Managing SPC

 Any Black Belt or Master Black Belt should be able

to set up the proper SPC Charts and monitor them.

 Issues to address when designing SPC charts:

 Proper type of chart to use for the situation
 Sample size and sample frequency
 Sampling method
 Decision rules being used
 How assignable causes will be resolved
 Is the process capable or not capable
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Decision or Sensitizing Rules

 Decision Rules (a.k.a. Sensitizing rules) are used by

operators to determine if a pattern of points indicates a
process is no longer stable, that is: “out-of-control”.
 Some rules are designed to detect changes or shifts in
the process center (mean)
 Some rules are designed to detect changes in the
process variation (standard deviation)
 Some rules are designed to detect a non-normal
patterns (e.g. trends or cycles)
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Types of error when you use

sampling

 Control charts are based on sampling. Sampling is

subject to two kinds of error:
 Type I error (α): “False Alarm” – The sample
indicates the process is “out-of-control” but is not
 Type II error (β): “Failure to detect” – The sample
indicates the process is stable, but it really is “out-of-
control”

 Inmost quality situations the larger concern is avoiding

Type II error: “Failure to detect”. However, with SPC
probably the larger concern is Type I error: “False
alarms”
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Types of Error

Test Says
H0 True H0 False

Type I error: a
H0
No error
State of True False alarm,
producer’s risk
Reality Type II error: b
H0
False No error
Failure to detect,
consumer’s risk
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Examples

 Ho:Part is good
Ha: Part is bad

 Ho:Person did not commit the crime

Ha: Person did commit the crime

 Ho:The appendix is good

Ha: The appendix is bad

 Ho:The process is in control

Ha: The process in not in control
A look at two decision rules and
the probability of Type I and Type
II errors

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The Central Limit Theorem is the basis for

assuming that a process “in control” follows a
Normal Distribution
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Probability zones for the normal

distribution
Rule 1 – Any point outside the 3σ control limits
(probability shown for a sequence of 8 points)

False Alarm

Failure
To Detect

Failure
To Detect
Rule 4 – A run of 8 points on the same side of the
centerline but within the 3σ control limits

False Alarm

Failure
To Detect

Failure
To Detect
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Overall Type I Error for both rules

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Cumulative effect of Type I error on a sequence

of 8 points as decision rules are added

The probability of a False Alarm

Increases dramatically as decision rules
are added. It does not take too many
false alarms before operators begin
to lose faith in control charts and
start to ignore them.
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Type I Error - A Common Problem

That Makes SPC Ineffective

 Too much Type I error eventually renders SPC

ineffective. People get tired of chasing false alarms.

 Many experts recommend using two decision rules

(three at the most) to minimize Type I error. Rules 1 and
4 are commonly used.

 Often, upon set up, software installers toggle on all

decision rules thinking that is desirable.

 Ifyou use SPC software, ask to see which rules are in

effect.
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Tactics for Managers

 Ask to see SPC Charts

 Ask how it was decided which type of chart to use.

 Ask which decision rules are being used.

 Lookfor out-of-control points on the chart and what the

response was in removing the causes.

 Askif the work group is having trouble resolving

assignable causes. Were Pareto Charts, Cause & Effect
Diagrams, or other tools used to prioritize efforts?