Managing Operations: A Focus on Excellence

Inputs Transformation Process Throughput

Cox, Blackstone, and Schleier, 2003

Chapter 14 The Tools of Quality: Exceeding Customers Expectations

The Seven Tools of Quality

1. 2. 3. 4. 5. 6. 7. Control chart Run chart Pareto chart Flow chart Cause and effect diagram Histogram Scatter diagram
14-2

CBS Chapter 14

Statistical Process Control

A method of inspection by which it can be determined whether a process is in control Differs from Acceptance Sampling in that SPC does not make judgements about the quality of the item processed. Key tool is the Control Chart of which several types exist.
CBS Chapter 14 14-3

SPC Defined
All processes are affected by multiple factors and, therefore, SPC can be applied to any process. There is inherent variation in any process which can be measured and controlled. SPC does not eliminate variation, but it does allow the user to track special cause variation. SPC is a statistical method of separating variation resulting from special causes from natural variation and to establish and maintain consistency in the process, enabling process improvement. (Goetsch & Davis, 2003. p. 631)
CBS Chapter 14

14-4

Variation in Processes
Common Cause variation - the variation which in inherent in the process itself; when sampled, a normal distribution is found; a process is said to be in statistical control when only common cause variation exists. Special (or Assignable) Cause variation - the variation in process output that might be traced to a specific cause; the process is said to be out of control when a special cause variation exists.
CBS Chapter 14 14-5

Rationale for SPC

Control of Variation Continuous Improvement Predictability of Processes Elimination of Waste Product Inspection

CBS Chapter 14

14-6

Creating Control Charts

All control charts rely on the periodic sampling and measurement of items. The data collected will allow the calculation of a centerline, and upper and lower control limits. The centerline is the mean of all samples, whereas the control limits are, conceptually, the mean +/- three standard deviations.
CBS Chapter 14 14-7

Interpreting Control Charts

SPC is based upon the Central Limit Theorem which tells us, in effect, that the samples will follow a normal distribution regardless of the shape of the parent distribution.

2 (68%)
4 (95.5%) 6 (99.7%)

Interpreting control charts is, then, all about probabilities if the observations arent probable, then there must be a special cause variation.
CBS Chapter 14 14-8

Interpreting Control Charts

Special Cause Variation is assumed to exist if: 1. Any point falls outside the control limits. 2. Nine consecutive observations fall on one side of the mean. 3. Six consecutive observations are increasing (or decreasing.) 4. 14 observations alternate above and below the mean. 5. Two of three consecutive points fall in zone C in one-half of the chart. 6. Four of five consecutive points fall in zone B in one-half of the chart.

+3x +2 +1

UCL C = 2.1%

B = 13.75% A = 34% A = 34% +1 B = 13.75% +2 C = 2.1% -3x LCL

7. 15 consecutive observations in the A zones. 8. Eight consecutive points outside of the A zones.

CBS Chapter 14

14-9

Risks of SPC
SPC has the same Type I and Type II risks as acceptance sampling If the process if in fact in control but we conclude that it is out of control, we have committed a Type I error. If the process if in fact out of control but we conclude that it is in control, we have committed a Type II error.
CBS Chapter 14 14-10

Common control charts for variables & attributes

Data Category Variables data Chart Type X-bar & R X-tilde & R X-Rs Attributes data P-chart Np-chart C-chart U-chart Statistical Qty Mean & Range Median & Range Individual values Percent defective Number of defectives Number of defects Number of defects per unit (area, time, length, etc.)
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CBS Chapter 14

What SPC does not do

SPC only determines whether a process is in statistical control NOT whether the process is producing within specifications nor whether the process is even capable of producing within specifications. We must rely on another measure AFTER we have assured that the process is in control using SPC.
CBS Chapter 14 14-12

Process Capability
Process capability is the ability of the process, as it currently exists, to product within specifications. One measure known as Cp compares the natural variation of the process to the specification width. Another, more precise, measure known as Cpk compares the natural variation of the process to the specification width and target.
CBS Chapter 14 14-13

Process Capability
Process Capability (PC) is the range in which "all" output can be produced the inherent capability of the process.

Definition: PC = 6

6 (99.7%)
CBS Chapter 14 14-14

Process Capability and Process Specifications

Process output distribution Output out of spec
5.010 4.90 4.95 5.00 5.05 5.10 5.15 cm

Output out of spec

Tolerance band LSL USL

CBS Chapter 14

Inherent capability (6 )

14-15

Process Capability and Process Specifications

This process is CAPABLE of producing all good output. Control the process. Lower Spec Limit Upper Spec Limit

This process is NOT CAPABLE.

INSPECT - Sort out the defectives

CBS Chapter 14 14-16

Process Capability Index

Index Cpk compares the spread and location of the process, relative to the specifications.

Cpk =

the smaller of:

OR

Upper Spec Limit - X 3 X - Lower Spec Limit 3

CBS Chapter 14

14-17

Cpk Values
Cpk = 1.0 Cpk = 1.33 Cpk = 3.0

LSL

USL

LSL

USL

LSL

USL

Cpk = 1.0

Cpk = 0.60

Cpk = 0.80

LSL
CBS Chapter 14

USL

LSL

USL LSL

USL
14-18

Run Charts
Number of defectives

x x

x x

x x

x x
Time

Figure 14.13. Run chart

CBS Chapter 14

14-19

Pareto Chart
Comments

200 180 160 140 120 100 80 60 40 20

x x x

Crust too hard

Few toppings

Need more cheese

Too much sauce

Service too slow

Figure 14.14. Pareto Analysis of problems at a pizza parlor

CBS Chapter 14 14-20

Time (distance) Brief Description 5 min. Sale is made. Items sold are entered into POS terminal. D 4 hours Average delay until the end of the day. 1 min. Inventory records are updated for sales and receipts by computer. D 14 hours Delay until order review. 20 min. Manager builds an order to maximize discount/minimize freight costs by ordering reorder items and other items required to reach discount. 3 days Mail order to vendor. 3 days Vendor processes order. 3 days Vendor ships order. 5 min. Inspect shipment for damage. 5 min. Move shipment to stock room. D 2 days Temporarily placed in stock room until time is available to stock shelf. 2 min. Move coffees to proper shelves. 30 minutes Coffees/teas placed in correct display containers. 15 days Wait until time to pay invoice. 5 min. Pay invoice. Summary of Work Elements Element Number Time/distance Percentage 6 3 days 61 min. 11 D 3 2 days 18 hrs. 11 4 6 days 7 min. 22 1 15 days 56 1 5 min. 0 Figure 11.7. Process flow chartcurrent method of inventory replenishment

Element

Flow Chart

CBS Chapter 14

14-21

Cause and Effect Diagram

Out of Gas FUEL Old Dead Fuel Line Closed Lights Left On BATTERY Cable Corroded

CAR WONT START

Loose Wire STARTER SOLENOID WIRES

Wires Corroded

Figure 14.15. Ishikawa (cause and effect) diagram for car wont start

CBS Chapter 14

14-22

Histogram
18 16 14 12 Frequency 10 8 6 4 2 0 3 8 6 14 11 17
25

14
20

23

11
Frequency

8 6 3

15

15 14

11 10 9

11

10

5 2

2 3 4 5 6 7 8 9 10 11 12 Result Figure 14.16a. Histogram of expected results

0 2 3

Result Figure 14.16b. Histogram of actual results

10

11

12

CBS Chapter 14

14-23

Possible Histogram Shapes

14 12 12

14 12

12

12

Frequency

10 9 8 6 6 9

10 9

Frequency

8 6

4 3 2

4 3

4 3 2 2

Figure 14.18. Bimodal histogram

10 9 8

Category

C a te g o r y

F ig u r e 1 4 .1 9 . C liff-lik e h isto g r a m

14 12

6 5 4 3 2 1 0 1 2 3 4 5 6 7 8 9 10 11 Category 12

Frequency

Frequency

10 8 6 4 2 0 1 2 3 4 5 6 7 8 9 10

CBS Chapter 14

Figure 14.20. Saw-toothed histogram

Figure 14.21. Skewed histogram

Category
14-24

Scatter Diagram
Points Scored 40 35 30 25 20 15 10 5 0 0 50 100 150 200 250 300 350 400 450 Yards Gained Rushing
14-25

Figure 14.22. Scatter diagram

CBS Chapter 14

The Seven New Tools

1. 2. 3. 4. 5. 6. 7. Affinity diagram Relational diagram Tree diagram Matrix diagram Program decision process chart Arrow diagram Matrix data analysis
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CBS Chapter 14

Affinity Diagram
A method to get your arms around a complex problem. Similar to a brainstorming session wherein each participant writes his/her idea for a cause on an index card. 2 7 1 8 6 13 3 10
CBS Chapter 14

5 12 14 15
14-27

11

16

Affinity Diagram
A method to get your arms around a complex problem. Similar to a brainstorming session wherein each participant writes his/her idea for a cause on an index card. The possible causes are then arranged into groups of similar causes. The groups might be functional areas. Group 1 4 6 11
CBS Chapter 14

Group 2 8 10

Group 3 2 3 7 13 15

Group 4 1 5 9 12 14 16
14-28

Relational Diagram
Used to logically examine the interrelationships among the causes within a particular grouping. The problem is written to the left and the causes are placed according to their relationship to the problem -- the further away the weaker the relationship. 1 Statement of problem 16
CBS Chapter 14

5 12

14
14-29

Relationship Diagram Example

Losses not defined Accepting current reality Status quo is rewarded Busy maximizing department profit Planning work Schedule is overloaded

Too many projects

Employees lack understanding

Lack time to develop employees Improvement work competes with day-to-day work

Short-term profit goals

Lack incentive for improvement

Management is not setting a good example

CBS Chapter 14

Figure 14.23. Relational diagram

14-30

Tree Diagram
Used to identify and sequence the tasks necessary to accomplish an objective (the opposite of the problem) using the affinity diagram and the relationship diagram as a reference. 1 5 Objective 10 7 11
CBS Chapter 14

4 3

6 13 15 9

2 12 14 16

14-31

Tree Diagram Example

Improve interaction among functional areas represented in the group, in the creation and implementation of an effective business plan

Make group meetings more Effective Develop procedures to assure team effectiveness Provide system to communicate progress

Interaction must occur with frequency Publish and adhere to agenda, with team input Require each function to periodically report status Distribute tracking charts of team performance Each function shows its plan to fulfill overall plan Identify relationships in dependencies in project plan Participate in joint training of planning methods Use facilitator approach at meetings 14-32

Show functional interdependencies in plan development Interaction techniques Use consensus building techniques in plan development and implementation Figure 14.24. Example tree diagram

CBS Chapter 14

Matrix Diagram
A\B A1 A2 A3 A4 A5 C5 C4 C3 C2 C1 B1 A1 A2 A3 A4 A5 B2 B3 B4 B5 D5 D4 D3 D2 D1 A1 A2 A3 A4 A5 B1 B2 B3 B4 B5

L-shaped

C5 C4 C3 C2 C1 B1 B2 B3 B4 B5

T-shaped
CBS Chapter 14

X-shaped
14-33

Dept 1 Dept 2 Dept 3 1 1 2 5 1 3 1 2 T 10 2 3 1 A 3 4 1 S K 6 1 2 13 1 3 2 2 2 1 8 2 1 12 1 2 14 1 7 3 2 1 11 3 1 2 9 2 1 16 1 2 15 1 2 CBS Chapter 14

Matrix Diagram Example

The matrix L-diagram is often used to identify and assign responsibility for tasks identified in the tree diagram. 1 = primary 2 = secondary 3 = tertiary
14-34

Program Decision Process Chart

Case received via mail. Case scanned by paralegal Conflict of interest No conflict of interest Attorney and paralegal meet with client Attorney and paralegal "discover evidence A settlement offer is made Plaintiff settles File motion to dismiss case Plaintiff doesn't settle File trial motions Hold hearing on motions Judge orders mediation Judge doesn't order mediation No settlement Mediate settlement Set trial date Depose witnesses Go to trial Figure 14.27. Sample program decision process chart

Sent to another attorney

CBS Chapter 14

14-35

Arrow Diagram
Operations Foundation Framework Scaffolding Exterior Interior walls Plumbing and electrical work Doors and windows Interior painting Interior finished Final inspection and delivery
CBS Chapter 14

10

11 12

Figure 14.28a. Gantt chart to plan the construction of a house

14-36

Arrow Diagram
4 5

10

7
CBS Chapter 14

9
14-37

Figure 14.28b. Arrow diagram for construction of a house

What is QFD?
A specialized method for making customers part of the product development cycle. It translates customer wants into what the organization produces enabling the organization to: Prioritize customer needs; Find innovative responses to those needs; and, Improve processes to maximize effectiveness.

CBS Chapter 14

14-38

Structure of QFD
6 2

1 Customer Input 2 Manufacturers Current Requirements/Specifications to Suppliers 3 Planning Matrix importance rating competition rating target values scale-up needed sales points 4 Relationships 5 Prioritized list of manufacturers critical process requirements 6 Process requirement trade-offs

5
CBS Chapter 14

14-39

QFD Example
X

X = conflicting requirement + = supporting requirement

Product characteristics

PRIORITY

3 Color choices

Tape recorder

Plastic handle

6 Speakers

Plastic case

A = Competitor 1 B = Competitor 2 C = Our Boom Box

WORST BEST

Tapes from CD Large speakers Light weight Good balance Good sound Inexpensive Attractive

4 5 6 4 1 2 4 +

A B B C A B C B C + BC A C C

B AC A AB

CBS Chapter 14

Figure 14.29. House of quality for a boom box

14-40

Customer Requirements Technical features Applied technologies Manufacturing processes Quality control processes Statistical process control
CBS Chapter 14

Technical features Matrix 1 Matrix 2

QFD Process

Applied technologies Manufacturing processes Matrix 3 Quality control processes Matrix 4 Statistical process control Matrix 5 Specifications for the finished product Matrix 6

14-41

Taguchi Loss Function

COSTS $

L = k(T-x)2 where: L = loss k = a constant (typically a measure of intolerance of deviation) T = target x = observed value

12 OUNCE

AMOUNT

Figure 14.30. The Taguchi loss function

CBS Chapter 14 14-42

Business System Model

NT O L ME TR GE ON CE NA & C AN TS MA ING RM EN N FO REM AN N PL ER U IO P T AS TA ME EN EM PL N IM SIG DE

THE ENVIRONMENT: GLOBAL COMPETITORS AND SUPPLIERS, GOVERNMENTS, ECONOMIES, CONSUMER TASTES, UNIONS, ETC.
GE NT ME

PH

SO ILO

Y PH

NA MA

RA ST

ORGANIZATION

MA NA G

INFORMATION SYSTEMS

SUPPLIERS

PHYSICAL RESOURCES

PEOPLE

BUSINESS PROCESSES

INPUT

TRANSFORMATION

THROUGHPUT

FIGURE 1.6g. BUSINESS SYSTEM MODEL

CBS Chapter 14 14-43

EM EN T

CUSTOMERS

PO

L IC Y

S AL GO &

GY TE

CT JE OB

ES IV