QUALITY CONTROL AND CUSTOMER

SERVICE – CUSTOMER CARE

ESAN

SIX SIGMA

Session 20
October 25th, 2017

achoy@esan.edu.pe
Prof. Augusto Choy 1
 Control Charts
for Attributes
 p-chart: A chart used for controlling the
proportion of defective services or
products generated by the process.
p = p(1 – p)/n
Where
n = sample size
p = central line on the chart, which can be either the historical
average population proportion defective or a target value.
– –
Control limits are: UCLp = p+zp and LCLp = p−zp

z = normal deviate (number of standard deviations from the average)

 Hometown Bank
Example
The operations manager of the booking services department of Hometown Bank
is concerned about the number of wrong customer account numbers recorded by
Hometown personnel.
Each week a random sample of 2,500 deposits is taken, and the number of
incorrect account numbers is recorded. The results for the past 12 weeks are
shown in the following table.

Is the booking process out of statistical control? Use three-sigma control limits.
 Hometown Bank
Using a p-Chart to monitor a process
n = 2500 Sample Wrong Proportion
147 Number Account # Defective
p= = 0.0049
12(2500) 1 15 0.006
2 12 0.0048
p = p(1 – p)/n 3 19 0.0076
4 2 0.0008
p = 0.0049(1 – 0.0049)/2500 5 19 0.0076
6 4 0.0016
7 24 0.0096
p = 0.0014
8 7 0.0028
UCLp = 0.0049 + 3(0.0014) 9 10 0.004
= 0.0091 10 17 0.0068
11 15 0.006
LCLp = 0.0049 – 3(0.0014)
12 3 0.0012
= 0.0007
Total 147
 Hometown Bank
Using a p-Chart to monitor a process

Example
In class Problem
 Control Charts
Two types of error are possible with control
charts
• A type I error occurs when a process is
thought to be out of control when in fact
it is not
• A type II error occurs when a process is
thought to be in control when it is
actually out of statistical control
These errors can be controlled by the choice
of control limits
 Process Capability

• Process capability is the ability of the

process to meet the design specifications
for a service or product.
• Nominal value is a target for design
specifications.
• Tolerance is an allowance above or below
the nominal value.
 Process Capability

Nominal
value

Process distribution
Lower Upper
specification specification

20 25 30

Process is capable
 Process Capability

Nominal
value

Process distribution
Lower Upper
specification specification

20 25 30

Process is not capable

 Process Capability Ratio, Cp

Process capability ratio, Cp, is the tolerance width divided by 6 standard

deviations (process variability).

Upper specification - Lower specification

Cp =
6
 Process Capability Index, Cpk

Process Capability Index, Cpk, is an index that measures the potential

for a process to generate defective outputs relative to either upper
or lower specifications.

=x – Lower specification
Upper specification – x=
Cpk = Minimum of ,
3 3

We take the minimum of the two ratios because it gives the worst-
case situation.
 Intensive Care Lab
Example
The intensive care unit lab process has an average turnaround time
of 26.2 minutes and a standard deviation of 1.35 minutes.
The nominal value for this service is 25 minutes with an upper
specification limit of 30 minutes and a lower specification limit of 20
minutes.
The administrator of the lab wants to have three-sigma performance
for her lab. Is the lab process capable of this level of performance?

Upper specification = 30 minutes

Lower specification = 20 minutes
Average service = 26.2 minutes
 = 1.35 minutes
 Intensive Care Lab
Assessing Process Capability
Example Upper specification = 30 minutes
Lower specification = 20 minutes
Average service = 26.2 minutes
 = 1.35 minutes

= =
Cpk = Minimum of
x – Lower specification ,
Upper specification – x
3 3

26.2 – 20.0 30.0 – 26.2

Cpk = Minimum of
3(1.35)
, 3(1.35)
Process
Cpk = Minimum of 1.53, 0.94 = 0.94 Capability
Index
 Intensive Care Lab
Assessing Process Capability
Example
Upper specification - Lower specification
Cp =
6
30 - 20
Cp = = 1.23 Process Capability Ratio
6(1.35)

Does not meet 3 (1.00 Cpk) target due to a shift in mean

(Note variability is ok since Cp is over 1.0)

Before Process Modification

Upper specification = 30.0 minutes Lower specification = 20.0 minutes
Average service = 26.2 minutes
 = 1.35 minutes Cpk = 0.94 Cp = 1.23
In Class Problem
In Class Problem
 Effects of Reducing
Variability on Process Capability

Nominal value
Six sigma

Four sigma

Two sigma

Lower Upper
specification specification

Mean
What it means to operate at 6-sigma
Expected frequency outside Approx. frequency for daily
Range Population in range
range event

μ ± 1σ 0.682689492137 1 in 3 Twice a week

μ ± 2σ 0.954499736104 1 in 22 Every three weeks

μ ± 3σ 0.997300203937 1 in 370 Yearly

Every 43 years (twice in a

μ ± 4σ 0.999936657516 1 in 15,787
lifetime)

Every 5,000 years (once in

μ ± 5σ 0.999999426697 1 in 1,744,278
history)

μ ± 6σ 0.999999998027 1 in 506,842,372 Every 1.5 million years

 Six Sigma
• 3.4 defects per million
• Cpk = 2
• Impact of number of parts or production steps
on yield:
– 6 sigma 4 sigma 3 sigma
• 1 100% 99% 99%
• 5 100% 97% 71%
• 10 100% 94% 50%
• 100 99.97% 54% 0%
 Designing in 6-sigma

• Reduce the number of parts in a product

• Reduce the number of steps in a process
 Six Sigma

• Six Sigma is a comprehensive and flexible system for

achieving, sustaining, and maximizing business success
by minimizing defects and variability in processes.
• It relies heavily on the principles and tools of TQM.
• It is driven by a close understanding of customer needs;
the disciplined use of facts, data, and statistical analysis;
and diligent attention to managing, improving, and
reinventing business processes.
 Six Sigma
Improvement Model
1. Define Determine the current process
characteristics critical to customer satisfaction
and identify any gaps.
2. Measure Quantify the work the process does
that affects the gap.
3. Analyze Use data on measures to perform
process analysis.
4. Improve Modify or redesign existing methods to
meet the new performance objectives.
5. Control Monitor the process to make sure high
performance levels are maintained.
 Six Sigma Implementation

 Top Down Commitment from corporate leaders.

 Measurement Systems to Track Progress
 Tough Goal Setting through benchmarking best-
in-class companies.
 Education: Employees must be trained in the
“whys” and “how-tos” of quality.
 Communication: Successes are as important to
understanding as failures.
 Customer Priorities: Never lose sight of the
customer’s priorities.
 Six Sigma Education

• Green Belt: An employee who achieved the first level of

training in a Six Sigma program and spends part of his or
her time teaching and helping teams with their projects.

• Black Belt: An employee who reached the highest level

of training in a Six Sigma program and spends all of his
or her time teaching and leading teams involved in Six
Sigma projects.

• Master Black Belt: Full-time teachers and mentors to

several black belts.
 International Quality
Documentation Standards

A set of standards governing documentation

ISO of a quality program.

9000
Documentation standards that require participating

ISO companies to keep track of their raw materials use

and their generation, treatment, and disposal of
hazardous wastes.

14000
 Malcolm Baldrige National Quality
Award
Named after the late secretary of commerce, a strong proponent of
enhancing quality as a means of reducing the trade deficit. The
award promotes, recognizes, and publicizes quality strategies and
achievements.
1. Category 1 ─ Leadership 120 points
2. Category 2 ─ Strategic Planning 85 points
3. Category 3 ─ Customer and Market Focus 85 points
4. Category 4 ─ Measurement, Analysis, and
Knowledge Management 90 points
5. Category 5 ─ Human Resource Focus 85 points
6. Category 6 ─ Process Management 85 points
7. Category 7 ─ Business Results 450 points