Measure Phase Slides PDF

Process Flow Metrics
❖ Work in progress (WIP)

❖ Work in queue (WIQ)
❖ Touch time
❖ Takt time
❖ Cycle time
❖ Throughput
Work In Progress (WIP)
❖ Partially finished goods waiting for
completion and eventual sale of these
items.
❖ These items are either just being
fabricated or waiting for further
processing.
Work in Queue (WIQ)
❖ Material at work station waiting to be
processed.
❖ Some of the Work in Progress may not
be in the queue.
Touch Time
❖ Time that material is actually being
worked on.
❖ This excludes moving, waiting time.
Takt Time
❖ Takt time is the time in which a product
needs to be produced in order to satisfy
customer demand.
❖ Takt time =
Net Operating time per period
Customer demand per period
Takt Time
❖ For example
❖ Customer wants 10 units per week,

❖ Plant operates 40 hour per week
❖ Takt Time = 40/10 = 4 hrs.
❖ Takt time is not related to how much time it

takes to make the unit.
Takt Time
❖ For example
❖ Customer wants 10 units per week,

❖ Plant operates 40 hour per week
❖ Two breaks of 10 minutes and 40 minutes
lunch break daily. (5 days week)
❖ Net operating time = 40 hrs – 5x(1 hr)= 35
hrs
❖ Takt Time = 35/10 = 3.5 hrs.
❖ Takt time is not related to how much time it

takes to make the unit.
Cycle Time
❖ Actual time to produce one piece.
Process 1 Process 2 Process 3
3.5 Hours 3.5 Hours 3.5 Hours
❖ Takt time = 3.5 hrs

❖ Cycle time = 10.5 hrs
Cycle Time
❖ Actual time to produce one piece.
1 Hours 3.5 Hours 3.5 Hours
❖ Takt time = 3.5 hrs

❖ Cycle time = 8 hrs
Cycle Time
❖ Cycle time is value added time only.
1 Hours 3.5 Hours 1 Hours

Lead Time
❖ Total time a unit takes from the time the
work is requested to the time it is
delivered.
❖ Includes processing and waiting time.
❖ Lead Time = WIP/Throughput
❖ Example:
❖ WIP is 50 units
❖ Throughput is 10 units per day
❖ Lead Time = 50/10 = 5 days
Throughput Rate
❖ Throughput is the average number of
units processed per time unit.
❖ Throughput rate = 1/ Cycle time
❖ Example:
❖ Cycle time = 20 minutes
❖ Throughput rate = 1/20 per minutes
❖ Or 60/20 per hour = 3 per hour
❖ Or 3x8 per day (for 8 hour shift) = 24 per
day
Process Analysis Tools
❖ Flowcharts
❖ Process maps
❖ Value stream maps
❖ Work instructions
❖ Spaghetti diagrams
❖ Circle diagrams
❖ Gemba walk
Flow Chart
❖ Shows the processes as boxes connected
by arrows and decision boxes.
Types of Flowcharts
❖ Basic Flowcharts
❖ Swim Lane
❖ Value Stream Maps
Process Mapping
❖ Flow chart and process map are used
interchangeably
❖ Process mapping is the process of

creating a diagram; the diagram itself is
called a flow chart.
Value Stream Maps
❖ Type of Flow Chart showing how value
flows through the organization
❖ Flow of material
❖ Flow of information
Value Stream Maps
Value Stream Maps
❖ SigmaXL demonstration
❖ Symbols
Value Stream Maps
❖ Used to analyze waste
Current Lean Future

State Principles State
Work Instructions
❖ Steps to do a job
❖ Brings consistency
❖ Helps in orienting new hire
❖ Generally in text but could be in the
form of a flow chart, illustrations as well
❖ Should be easy to understand
Spaghetti diagrams
❖ Trace the path of a product/activity
❖ To reduce the transport and motion waste
Waiting X-ray Reception Doctor
Exam
Reception Waiting
Exam Doctor X-ray

Circle Diagrams
❖ Venn Diagram
❖ Pie Chart
Sales
Knowledge 9%
1st Qtr
10%
2nd Qtr
58% 3rd Qtr
23%
Experience Attitude 4th Qtr
Gemba Walk
❖ Gemba = work area or shop floor
❖ Originated from “gembutsu”, which
means “real thing.”
❖ Gemba walk is the action of going to see
the process, observe, understand, ask
questions and learn.
Qualitative vs Quantitative
Data
Qualitative Data Quantitative Data
Description Numbers
Continuous vs Discrete
❖ Continuous Data
❖ Measurements: Length, height, time
❖ More information with less samples
❖ More sensitive
❖ Provide more information
❖ More expensive to collect
❖ Discrete Data
❖ Count: Number of students, Number of
heads
Measurement Scales
Data
Nominal Ordinal Interval Ratio

Measurement Scales
Data
Example:
Color: Blue, Green, Red
Measurement Scales
Data

Example:
Pass/Fail
Good, Bad, Worst
Measurement Scales
Data
Example:
Temperature: Celsius
Measurement Scales
Data
Example:
Height, mass, volume
Measurement Scales

Ordered N Y Y Y
Difference N N Y Y
Absolute Zero N N N Y
Example Red, Blue Good, Bad, Temperature Length,
Worst : Degree C Weight
Central Tendency Mode Mode, Mode, Mode,
Measurement Median Median, Median,
Mean Mean
Qualitative vs Quantitative
Data
Qualitative Data Quantitative Data

Sampling
Sample: Part
Population: Sampling of population
Complete Process
collection to
be studied
Inference
Parameter Statistic
Characteristic of Characteristic
a population of a sample
N number of members n
μ mean x̅
σ standard deviation s
Sampling
Sample: Part
Complete Process
collection to
be studied
Inference
Parameter Statistic
μ mean x̅
Why Sampling?
❖ Because of the cost and time involved in
studying the entire population.
Sampling
❖ Probability Samples
❖ Everyone in the population has an equal
chance of being selected
❖ Non-Probability Samples
❖ Where the probability of selection can't be
accurately determined.
❖ Sample may not be (generally isn’t)
representative of the general population
Sampling
Simple Random Sampling
Probability Systematic Random Sampling
Sampling
Stratified Random Sampling
Cluster Sampling
Accidental / Convenience Sampling

Probability
Sampling
Judgemental Sampling
Non
Quota Sampling
❖ Each item in the population has an equal
chance of being selected.
❖ Examples: Using random tables, Random
draw of lot (lottery)
Systematic Random Sampling

Probability
Sampling
Cluster Sampling
❖ Select elements at regular intervals through
that ordered list.
❖ Example: Checking every 6th piece produced
by the machine.

Probability
Sampling
Cluster Sampling
❖ Used to ensure that sub-groups within a
population are represented proportionally
in the sample.
❖ Example: If 10 people are drawn to
represent a country, 5 of them are male and
5 females to avoid the sex bias.

Probability
Sampling
Cluster Sampling
Cluster Sampling
❖ Sometimes it is more cost-effective to select
respondents in groups ('clusters'). Sampling
is often clustered by geography, or by time
periods.
❖ Example: Survey all customers visiting
particular stores on particular days.

Probability
Sampling
Cluster Sampling
Convenience Sampling
❖ The researcher selects whomever is
convenient. The samples are being drawn
from that part of the population which is
close to hand
❖ Example: A researcher at the mall selects
the first five people who walk by to get
their opinion of a product.

Probability
Sampling
Non
Quota Sampling
Judgmental Sampling
❖ The researcher chooses the sample based
on who they think would be appropriate for
the study.
❖ Example: Auditor selects a sample based on
the concerns he/she had in the earlier audit

Probability
Sampling
Non
Quota Sampling
Quota Sampling
❖ A quota is established and auditor are free
to choose any sample they wish as long as
the quota is met.
❖ Example: 2% of the calibration records.

Probability
Sampling
Non
Quota Sampling
Data Collection Plan
❖ Why you need to collect data?
❖ Goal and Objective
❖ Operational Definition
❖ How much? How? Where? When? Etc.
❖ Type of data – NOIR
❖ Manual or Automatic
❖ Past data vs Future
❖ Is data reliable?
Data Collection Plan
Measurement Operational How is it Type of Data Sample size Who? Data Comments
Definition measured? Recording
Form
Time to Time from Using a stop Continuous Every 10th Operator Assembly
assemble picking up watch piece Record
the first Ratio F-0156
piece to
placing the
assembled
item in tray
Data Coding
❖ Adding, Subtracting
❖ Example: -95, -97, -98, -90
❖ Add 100 to each: 5, 3, 2, 10
❖ Coded mean: 5
❖ Un-coded mean: 5-100 = -95
❖ Standard deviation remains same and is not
affected by addition and subtraction.
❖ s = 3.559
Data Coding
❖ Multiplying or dividing
❖ Example: 1.05, 1.03, 1.02, 1.10
❖ Multiply 100 to each: 105, 103, 102, 110
❖ Coded mean: 105
❖ Un-coded mean: 105 / 100 = 1.05
❖ Standard deviation need to divided by you
multiplied for coding.
❖ For coded data s = 3.559
❖ For original data s = 3.559/100 = 0.03559
Data Coding
❖ By truncation of repetitive terms
❖ Example: 0.555, 0.553, 0.552, 0.550
❖ Truncate 0.55 from all: 5,3,2,0
❖ This means we multiplied it by 1000 and
subtracted 550
❖ Coded mean: 2.5
❖ Un-coded mean: (2.5+550)/ 1000 =.5525
❖ Standard deviation need to divided by you
multiplied for coding.
❖ For coded data s = 2.0816
❖ For original data s = 2.0816/1000 =
0.0020816
Data Cleaning – M issing Data
❖ In statistics, imputation is the process of
replacing missing data with substituted
values.
❖ Missing data can introduce bias.
❖ Missing randomly
❖ Reason for missing
❖ Delete the row

❖ Replace with the average value
Measurement System Analysis (MSA)
❖ You need measurement to see how the
process is performing.
❖ Process has variation.
❖ What about measurement error /
variation?
❖ Measurement System includes –
operator, measuring instrument and
procedures.
M easurement System A nalysis (M SA )
❖ True Value – Actual value, which is
unknown
❖ Reference Value – Accepted value or
substitute of true value.
Resolution
❖ Resolution/ Discrimination
❖ Smallest readable unit of the measuring
instrument.
❖ 10 to 1 Rule of Thumb:
❖ “Rule of Ten” or “one to ten” is that the
discrimination (resolution) of the measuring
instrument should divide the tolerance of
the characteristic to be measured into ten
parts.
Resolution
❖ Which of these two would you use if the
part tolerance is 52.00 +/- 0.05 (51.95 –
52.05)
Resolution
❖ Which of these two would you use if the
part tolerance is 52.00 +/- 0.05 (51.95 –
52.05)
❖ Tolerance Range = 0.10
❖ Minimum Reading of Digital Vernier = 0.01
❖ Digital Vernier divides the tolerance into 10
parts, hence acceptable.
M easurement System A nalysis (M SA )
❖ Resolution
❖ Accuracy
❖ Bias
❖ Linearity
❖ Stability
❖ Precision
❖ Repeatability
❖ Reproducibility
A c c urac y vs Prec ision
❖ Accuracy
❖ “Closeness” to the true value, or to an
accepted reference value.
❖ Bias
❖ Linearity
❖ Stability
❖ Precision
❖ “Closeness” of repeated readings to each
other
❖ Repeatability
❖ Reproducibility
❖ Resolution
❖ Accuracy
❖ Bias
❖ Linearity
❖ Stability
❖ Precision
❖ Repeatability
❖ Reproducibility
Bias
❖ Bias is the difference between the
observed average of measurements
and the reference value.
Reference Measured
Value (psi) Value (psi)
100 100
100 101
100 102
100 102
100 101
100 100
Average 101
Bias = 101 psi -100 psi = 1 psi
Bias
❖ Bias is the difference between the
observed average of measurements
and the reference value.
Average
Reference
Value
Bias
Bias
❖ Bias is the systematic error.
❖ Bias is addressed by calibration.
Linearity
❖ Linearity measures the bias across
the operating range of a tool or
instrument.
Reference Average Bias BIAS
Value (psi) Measured 2.5
Value (psi)
2
0 0 0 1.5
50 50.5 0.5
1
100 101 1
0.5
150 151.5 1.5
0
200 202 2 0 50 100 150 200 250
Stability
❖ Stability measures the bias over time.
Also known as drift.
Time
Time 2
Bias 2
Time 1
Bias 1
Accuracy vs Precision
❖ Accuracy
❖ “Closeness” to the true value, or to an
accepted reference value.
❖ Bias
❖ Linearity
❖ Stability
❖ Precision
❖ “Closeness” of repeated readings to each
other
❖ Repeatability
❖ Reproducibility
Repeatability
❖ Variation in measurements obtained
with one measuring instrument when
used several times by an appraiser.
❖ Also called Equipment Variation (EV)
❖ It’s the capability of the gauge to
produce consistent results.
Reproducibility
❖ Variation in the average of the
measurements made by different
appraisers using the same gage
❖ Also called Appraiser Variation (AV)
❖ It’s the capability of the appraiser to
produce consistent results.
Gage R&R (GRR)
❖ Combined estimate of repeatability and
reproducibility.
Gage R&R (GRR)
❖ Combined estimate of repeatability and
reproducibility.
Precision to Tolerance Ratio
❖ How capable your measurement system
is?
❖ Precision/Tolerance (P/T) is the ratio
between the estimated measurement
error (precision) and the tolerance of
the characteristic being measured.
❖ P/T ratio is the most common
estimate of measurement system
precision Measurement
Tolerance System
Variation
P/T = 10%
P/T = 100%
P/T = 200%
LSL USL
PTR
❖ PTR = 5.15 σms
USL-LSL
Why not 6σms ?

6 sigma includes 99.73% area
5.15 sigma includes 99% area
Gage R&R (GRR)
Gage R&R Studies
❖ Repeatability and reproducibility
(R&R) studies are a method for
determining the variation of a
measurement system.
❖ There are three methods of
conducting GRR Studies.
❖ Range
❖ Average and Range
❖ ANOVA
Gage R&R (GRR)
❖ The range method quantifies both
repeatability and reproducibility
together.
❖ The average and range method
provides separate estimate of
repeatability and reproducibility.
❖ The analysis of variance method
(ANOVA) estimates variation due to
repeatability and reproducibility and
parts, and also looks at the
interaction between those these.
Gage R&R (GRR) – Range Method
❖ Provides quick estimate of GRR.
❖ This method does not split the GRR into
Repeatability and Reproducibility
❖ Two operators usually measure 5 parts
one time each.
Gage R&R (GRR) – Range Method
❖ Two operators usually measure 5 parts
one time each.
Part Appraiser A Appraiser B Range
❖ GRR = R-bar/d2 = 1.6/1.19 = 1.34 #
❖ Process standard deviation = 2.23 1 100 101 1
2 99 102 3
❖ (From previous study)
3 97 99 2
❖ %GRR = 100 (GRR/process std dev) 4 103 103 0
❖ %GRR = 100 x 1.34 / 2.23 = 0.60 5 101 103 2
R-bar = 1.6
❖ Measurement variation consumes 60%
of the process variation. Measurement
system needs improvement.
GRR – Average and Range Method
❖ Average and Range method provides the
estimate of both repeatability and
reproducibility.
❖ Interaction between appraiser and gage
is not computed (ANOVA method does
that)
GRR – ANOVA Method
❖ ANOVA is Analysis of Variance
Number of Distinct Categories (NDC)
❖ Resolution:
❖ Using a meter stick to measure the height of
the students: (100cm to 130cm heights)
❖ Round to height to the nearest meter
❖ All students will have the same height.
❖ Round to the nearest decimeter
❖ We are 3 different heights.
❖ Round to the nearest centimeter
❖ We are 30 different heights.
❖ NDC = 1.414 x σparts
σgage
❖ NDC is the number of buckets your data
values would naturally drop into.
❖ What if The NDC is low?
❖ Analyze more distinct parts that truly
represent the entire range of the process.
❖ Increase the precision on your
measurement tool.
❖ Value of NDC
❖ Less than 2, the measurement system is of
no value for controlling the process, since
one part cannot be distinguished from
another.
❖ Equal to 2, the data can be divided into two
groups, say high and low.
❖ Equal to 3, the data can be divided into 3
groups, say low, middle and high.
❖ More than 5, denotes an acceptable
measurement system.
Crossed gage R&R study
A study in which each operator
measures each part. (Non-destructive)
Nested gage R&R study

A study in which only one operator
measures each part, usually because
the test destroys the part. (Destructive)
Measurement Systems
❖ Organizations need measurement
systems to track the progress.
❖ These are also called KPIs – Key
Performance Indicators.
❖ All functions in the business have
measurement systems in place.
❖ Focus on those measurements which
ensure the overall business success, not
the one which are easy to measure.
Measurement Systems - Sales
❖ Number of customer complaints
❖ Percent of items returned
❖ Percent sales from returning customers
❖ Sales growth
❖ Market share
❖ Customer satisfaction rating
Measurement Systems - Purchase
❖ Average number of suppliers for key
components
❖ Number of strategic alliances
❖ Rejection rate
Measurement Systems - Production
❖ Value added per person
❖ Internal repair/rejection rate
❖ Work in Progress
❖ Equipment Utilization
Measurement Systems
❖ Ensure that your measurements are free
from bias
❖ Repeatability and Reproducible of
measurements
Metrology
❖ Metrology is the science of
measurements. (Meteorology is science
of weather forecasting)
❖ Involves three Main activities:

❖ Definition of internationally accepted units
of measurement
❖ Realisation of these units of measurement
in practice
❖ Application of chains of traceability linking
measurements made in practice to
reference standards
Seven Base Units
Unit name Unit symbol Quantity name Dimension symbol
metre m length L
kilogram kg mass M
second s time T
ampere A electric current I
thermodynamic
kelvin K Θ
temperature
mole mol amount of substance N
candela cd luminous intensity J

Seven Base Units
Unit name Unit symbol
metre The distance travelled by light in vacuum in 1/299792458 second.
kilogram The mass of the international prototype kilogram.

The duration of 9192631770 periods of the radiation corresponding to
second the transition between the two hyperfine levels of the ground state of the
caesium-133 atom.
The constant current which, if maintained in two straight parallel
conductors of infinite length, of negligible circular cross-section, and
ampere
placed 1 m apart in vacuum, would produce between these conductors a
force equal to 2×10−7 newtons per metre of length.
kelvin 1/273.16 of the thermodynamic temperature of the triple point of water
The amount of substance of a system which contains as many elementary

mole
entities as there are atoms in 0.012 kilogram of carbon-12
The luminous intensity, in a given direction, of a source that emits
candela monochromatic radiation of frequency 5.4×1014 hertz and that has a
radiant intensity in that direction of 1/683 watt per steradian.
Derived Units
❖ The derived units in the SI are formed by
powers, products or quotients of the
base units.
❖ For example velocity is a quantity that is
derived from the base quantities of time
and length, so in SI the derived unit is
metres per second (symbol m/s).
Calibration
❖ Purpose:
❖ To ensure consistency
❖ To determine the accuracy readings
❖ Can measurements be trusted
Traceability
❖ “Property of a measurement result
whereby the result can be related to a
reference through a documented
unbroken chain of calibrations, each
contributing to the measurement
uncertainty.”
Traceability
SI Units
National Labs
Third Party Labs
Metrology Department
Working Instruments
Basic Statistical Terms
Sample: Part
Complete Process
collection to
be studied
Inference
Parameter Statistic
μ mean x̅
Notations
Population Sample
Parameters Statistics
Mean μ x̄
Standard Deviation σ s
Variance σ2 s2
Proportion of population P p
having an attribute
Proportion of population not Q q
having an attribute (=1-P) (=1-p)
Correlation coefficient ρ r
Number of elements N n
Central Limit Theorem
❖ For almost all populations, the
sampling distribution of the mean
can be approximated closely by a
normal distribution, provided the
sample size is sufficiently large.
Distribution of
Individual Observations
Distribution of
Sample Means
Standard Error of Means
❖ Standard deviation of the sampling
distribution of the sample mean
❖ Called “standard error of the mean”
Desc riptive Statistic s
Descriptive
Statistics
Central
Variability
Tendency
Mean Range
Standard
Mode
Deviation
Interquartile
Median
Range
Percentile
Mean
❖ Also known as Average Central
Tendency
❖ Affected by extreme values Mean Mode Median Percentile
❖ Example: 10, 11, 14, 9, 6

Quartile
❖ Mean = (10+11+14+9+6)/5 = 50/5 = 10
Mode
❖ Most occurring item Central
Tendency
❖ Example: 10, 11, 14, 9, 6, 10 Mean Mode Median Percentile
❖ Mode = 10 Quartile
Median
❖ Middle value when put in ascending or Central
Tendency
descending order.
❖ Example: 10, 11, 14, 9, 6
Mean Mode Median Percentile
❖ In ascending order - 6,9,10,11,14 Quartile
❖ Median = 10
❖ Example: 10, 11, 14, 9, 6, 11

❖ In order - 6,9,10,11, 11,14
❖ Median = 10.5
Percentile
❖ Median divides the data in two equal Central
Tendency
parts when arranged in ascending or

Mean Mode Median Percentile
descending order
❖ Percentile divides data in 99 parts Quartile
❖ Quartile divides data in 4 parts

❖ Example: 6,9,10,11, 11,14
❖ Q1=9, Q2=10.5, Q3=11
Percentile/Quartile Steps
❖ Arrange in ascending or descending Central
Tendency
order
❖ Calculate location(i) = P.(n)/100 Mean Mode Median Percentile
❖ P=percentile, n=numbers in data set Quartile
❖ If i is whole number – Percentile is

average of (i)th and (i+1)th location
❖ If i is “not” a whole number – Percentile
is located at (i+1)th whole-num.
❖ Example: 6,9,10,11, 11,14
❖ Q1=9, Q2=10.5, Q3=11
Descriptive Statistics
Variability
Interquartile Standard
Range
Range Deviation
Range
❖ Difference between lowest and the Variability
highest value.
Range
❖ Example: 6,9,10,11, 11,14 Range Deviation
❖ Range = 14-6 = 8
Interquartile Range
❖ Range of middle 50% data Variability
❖ IQR = Q3-Q1 Interquartile Standard

Range
Range Deviation
❖ Example: 6,9,10,11, 11,14
❖ Q1=9, Q2=10.5, Q3=11
❖ IQR = 11-9 = 2
❖ Box-and-Whisker Plot
Standard Deviation
❖ Variance = average of squared deviation Variability
about the arithmetic mean.

Range
❖ Square root of variance is standard Range Deviation
deviation
Standard Deviation
x x-x̅ (x-x̅ )2
100 0 0 ∑(x-x̅ )2
S2 =
101 1 1 n-1
99 -1 1
102 2 4 S 2 = 10/5 = 2
98 -2 4
S = √ 2 = 1.414
100 0 0
x̅ =100 ∑(x-x̅ )=0 ∑(x-x̅ )2=10
Graphic al M ethods
❖ Box-and-whisker plots
❖ Scatter diagrams
❖ Histograms
❖ Normal probability plots
❖ Frequency distributions
❖ Cumulative frequency distributions.
Box and W hisker Plots
❖ Also known as Box Plot
❖ Shows the median
❖ Shows Q1, Q3 and IQR
70
60
50 Median
25th
40
75th
30 Mean
20 Outliers
10 Avg No. of
orders per
0 mo
Box and Whisker Plots
❖ Demonstration: SigmaXL > Customer
Data > Average number of
orders/month
70
60
50 Median
25th
40
75th
30 Mean
20 Outliers
10 Avg No. of
orders per
0 mo
Sc atter Diagram
❖ One of seven basic quality tools
❖ To see relationship between two
variables
❖ Relationship should make practical
sense
❖ Temperature(X) vs Ice cream sale (Y)
❖ Some times relationship between two
variables is because of a third variable.
(ice cream sale vs heat stroke cases)
❖ Correlation/Regression is covered in the
Analyze Phase
Histogram
❖ Graphical representation of the
distribution of numerical data
❖ Values are assigned “bins” and
frequency for each bin is plotted.
Histograms
Frequency
10
15
20
0
5
7.1
11.7
16.2
Excel
20.8
25.4
30.0
34.5
39.1
43.7
Avg No. of orders per mo

48.2
52.8
57.4
Histogram
Frequency
10
15
20
30
25
0
5
7.1
12.58
18.06
23.54
29.02
34.5
Bin
39.98
45.46
50.94
56.42
❖ Demonstration Using SigmaXL and MS
More
Frequency
Valid Statistic al Conc lusions
❖ Hypothesis:
❖ A claim that we want to test
❖ Null Hypothesis - H0
❖ Default position / Currently accepted
position / Assumed / Status Quo
❖ Alternate Hypothesis – Ha
❖ Claim to be tested. Also known as Research
Hypothesis or the other option.
Valid Statistical Conclusions
❖ Null Hypothesis and Alternate
Hypothesis are pair and cover all
possibilities.
❖ Only one of these has to stand and not
both.
Types of Errors
True State of Nature
H0 Ha
Is true Is true
Support H0 /
Reject Ha Correct Type II Error
Conclusion
Conclusion Support Ha /
Reject H0 Type I Error Correct
Conclusion
Probability
❖ Classic Model
Number of outcomes in which the event occurs

Total Number of possible outcomes of an experiment
Probability
❖ Relative Frequency of Occurrence
Number of times an event occurred

Total number of opportunities for an event to occur
Probability
❖ Experiment/Trial: Some thing done with
an expectation of result.
❖ Event or Outcome: Result of experiment
❖ Sample Space: A sample space of an

experiment is the set of all possible
results of that random experiment.
{1, 2, 3, 4, 5, 6}
Probability
❖ Union: Probability that events A or B
occur: P(A ∪ B)
❖ Intersection: Probability that events A

and B occur: P(A ∩ B)
Probability
❖ Mutually Exclusive Events: When two
events cannot occur at the same time
❖ Independent Events: The occurrence of

Event A does not change the probability
of Event B
❖ Complementary Events: The probability

that Event A will NOT occur is denoted
by P(A').
Probability
❖ Rule of Addition
The probability that Event A or Event B occurs
=
Probability that Event A occurs
+
Probability that Event B occurs
-
Probability that both Events A and B occur
P(A ∪ B) = P(A) + P(B) - P(A ∩ B)

Probability
❖ Rule of Multiplication:
The probability that Events A and B both occur
=
Probability that Event A occurs
x
Probability that Event B occurs, given that A has
occurred
P(A ∩ B) = P(A) P(B|A)

Probability
❖ Independent Events
Probability
❖ Dependent Events
Fac torial
❖ Factorial of a non-negative integer n,
denoted by n!, is the product of all
positive integers less than or equal to n
Permutation/ Combination
❖ Permutation: A set of objects in which
position (or order) is important.
❖ e.g. Lock combination: 3376
❖ Combination: A set of objects in which

position (or order) is NOT important.
❖ e.g. Selecting 2 students out of 5
Continuous Probability Distributions
❖ Normal probability distribution
❖ Student's t distribution
❖ Chi-square distribution
❖ F distribution
❖ In case of a Continuous Distribution:
❖ The probability of a specific value is zero?
❖ You should be looking for the probability of

a range in case of Continuous Distribution.
Normal Probability Distribution
❖ Symmetrically distributed
❖ Long Tails / Bell Shaped
❖ Mean/ Mode and Median are same

❖ Two factors define the shape of the
curve:
❖ Mean
❖ Standard Deviation
❖ About 68% of the area under the curve
falls within 1 standard deviation of the
mean.
❖ About 95% of the area under the curve

falls within 2 standard deviations of the
mean.
❖ About 99.7% of the area under the

curve falls within 3 standard deviations
of the mean.
❖ The total area under the normal curve =
1.
❖ The probability of any particular value is
0.
❖ The probability that X is greater than or
less than a value = area under the
normal curve in that direction
❖ The value of the random variable Y is:
Y = { 1/[ σ * sqrt(2π) ] } * e -(x - μ)2/2σ2
❖ where X is a normal random variable,

❖ μ = mean,
❖ σ = standard deviation,
❖ π is approximately 3.14159,
❖ e is approximately 2.71828.
❖ Z Value / Standard Score
❖ How many standard deviations an

element is from the mean.
❖ z = (X - μ) / σ
❖ z is the z-score,
❖ X is the value of the element,
❖ μ is the population mean,
❖ σ is the standard deviation.
Z Table
Z Table in Excel
❖ NORMSDIST(z) returns p
❖ NORMSINV(p) returns z.
❖ Normal probability distribution
❖ Student's t distribution
❖ Chi-square distribution
❖ F distribution
Continuous vs Disc rete Variable
❖ If a variable can take on any value
between two specified values, it is called
a continuous variable; otherwise, it is
called a discrete variable.
Discrete Probability Distributions
❖ Binomial Probability Distribution
❖ Bernoulli Distribution
❖ Hypergeometric Probability Distribution
❖ Geometric Distribution
❖ Negative Geometric Distribution
❖ Poisson Probability Distribution

Binomial Probability Distribution
❖ A binomial experiment has the
following properties:
❖ The experiment consists of n repeated
trials.
❖ Each trial can result in just two possible
outcomes. We call one of these outcomes a
success and the other, a failure.
❖ The probability of success, denoted by p, is
the same on every trial.
❖ The trials are independent; that is, the
outcome on one trial does not affect the
outcome on other trials.
❖ A binomial experiment has the
❖ The experiment consists of n repeated
trials.
❖ Each trial can result in just two possible
outcomes. We call one of these outcomes a
success and the other, a failure.
❖ The probability of success, denoted by p, is
the same on every trial.
❖ The trials are independent; that is, the
outcome on one trial does not affect the
outcome on other trials.
❖ x: The number of successes that result from the P(x) = nCx . px . (1 - p)n - x
binomial experiment.
❖ n: The number of trials in the binomial
experiment.
❖ p: The probability of success on an individual
trial.
❖ q: The probability of failure on an individual
trial. (This is equal to 1 - p.)
❖ n!: The factorial of n (also known as n factorial).
❖ P(x) : Binomial probability - the probability that
an n-trial binomial experiment results in exactly
x successes, when the probability of success on
an individual trial is p.
❖ nCx: The number of combinations of n things,
taken x at a time.
❖ The binomial probability refers to the
probability that a binomial experiment
results in exactly x successes.
❖ Suppose a binomial experiment consists
of n trials and results in x successes. If
the probability of success on an
individual trial is p, then the binomial
probability is:
❖ P(x) = nCx . px . (1 - p)n - x
or
P(x) = { n! / [ x! (n - x)! ] } . px . (1 - p)n - x
❖ The mean of the distribution (μx) is n: The number of trials in the
binomial experiment.
n.p
p: The probability of success on an
❖ The variance (σ2x) is individual trial.
n.p.(1-p)
❖ The standard deviation (σx) is

sqrt[ n . p . ( 1 - p ) ]
Five Conditions - Binomial
❖ 1. There is a fixed number, n , of P(x) = nCx . px . (1 - p)n - x
identical trials.
❖ 2. For each trial, there are only two
possible outcomes (success/failure).
❖ 3. The probability of success, p, remains
the same for each trial.
❖ 4. The trials are independent of each
other.
❖ 5. x = the number of successes observed
for the n trials.
Bernoulli Distribution
❖ Distribution of successes on a single
trial.
❖ What is the probability of getting head in
tossing of a coin once?
Hypergeometric Distribution
❖ There is a fixed number, n , of identical P(x) = nCx . px . (1 - p)n - x
trials.
❖ For each trial, there are only two possible
outcomes (success/failure).
❖ The probability of success, p, remains the
same for each trial.
❖ The trials are independent of each other.
❖ Finite and known population without
replacement.
❖ Number of successes in population are
known
❖ x = the number of successes observed for
the n trials.
❖ N: size of population P(x) = ACx . N-ACn-x / NCn
❖ A: number of successes in population
❖ x: The number of successes that result from the
experiment.
❖ n: The number of trials without replacement.
❖ p: The probability of success on an individual
trial.
❖ q: The probability of failure on an individual
trial. (This is equal to 1 - p.)
❖ P(x) : The probability that an n-trial experiment
results in exactly x successes
❖ nCx: The number of combinations of n things,
taken x at a time.
❖ Out of 10 people (6M, 4F), 3 people are P(x) = ACx . N-ACn-x / NCn
selected without replacement. What is
the probability that two of them are
females?
❖ P(2) = 4C2 . 10-4C3-2 / 10C3
❖ = 4C2 . 6C1 / 10C3 = 6x6/120 = 0.3
❖ In Excel use: HYPGEOM.DIST function

❖ When sample size is less than 5%
population then can use Binomial.
Geometric Distribution
❖ Number of trials needed to get the first
success.
❖ What is the probability that if the coin is
tossed repeatedly the first head appears on
5th trial?
Negative Binomial Distribution
❖ Generalization of the Geometric
distribution
❖ Number of trials needed to get the first
number of successes.
❖ What is the probability that if the coin is
tossed repeatedly the first third time head
appears on 5th trial?
❖ In Binomial distribution trials are fixed,

in Negative Binomial number of
successes are fixed.
Poisson Distribution
❖ A Poisson experiment has the following
properties:
❖ The experiment results in outcomes that can
be classified as successes or failures.
❖ The average number of successes (μ) that
occurs in a specified region is known.
❖ Outcomes are random. Occurrence of one
outcome does not influence the chance of
another outcome of interest.
❖ The outcomes of interest are rare relative to
the possible outcomes.
❖ e: A constant equal to approximately P(x; μ) = (e-μ) (μx) / x!
2.71828. (Actually, e is the base of the
natural logarithm system)
❖ μ: The mean number of successes that
occur in a specified region.
❖ x: The actual number of successes that
occur in a specified region.
❖ P(x; μ): The Poisson probability that
exactly x successes occur in a Poisson
experiment, when the mean number of
successes is μ.
❖ Poisson Formula. Suppose we conduct a
Poisson experiment, in which the average
number of successes within a given region is
μ. Then, the Poisson probability is:
❖ P(x; μ) = (e-μ) (μx) / x!
❖ where x is the actual number of successes

that result from the experiment, and e is
approximately equal to 2.71828.
❖ The Poisson distribution has the
❖ The mean of the distribution is equal to
μ.
❖ The variance is also equal to μ .
❖ On a booking counter on the average 3.6
people come every 10 minute on
weekends. What is the probability of
getting 7 people in 10 minutes?
❖ μ = 3.6, x=7
❖ P(x; μ) = (e-μ) (μx) / x! = (e-3.6) (3.67) / 7!
❖ =0.02732 x 7836.41 / 5040 = 0.0424
Process Capability Indices
❖ Ratio of the spread between the process
specifications to the spread of the
process values, (6 process standard
deviations) .
Proc ess Capability Indic es
❖ LSL – Lower Specification Limit
❖ USL - Upper Specification Limit
❖ LCL – Lower Control Limit

❖ UCL - Upper Control Limit
❖ Cp = (USL – LSL)/(6*σ within)
❖ Cp = (USL – LSL)/(6*σ within)
❖ CpL = (Process Mean – LSL)/(3* σ within)
❖ CpU = (USL – Process Mean)/(3* σ within)
❖ Cpk = Min (CpU, CpL )

❖ Why to do Process Capability study?
❖ Understand the behaviors of new/repaired/

adjusted equipment
❖ Review of tolerances
❖ Allocation of equipment
Proc ess Capability Indic es
❖ Conditions to be met:
❖ Sample to represent the population
❖ Normal distribution of data
❖ The process must be in statistical control
❖ Sample size must be sufficient
❖ Process Capability vs Rejections
USL−LSL 6σ 8σ 10σ 12σ

Cp 1.00 1.33 1.66 2.00
Rejects 0.27 % 64 ppm 0.6 ppm 2 ppb
Process Performance Indices
❖ Conditions to be met:
❖ Sample to represent the population
❖ Normal distribution of data
❖ The process must be in statistical control
❖ Sample size must be sufficient
Process Performance Indices
❖ Pp = (USL – LSL)/(6* σ overall)
❖ PpL = (Process Mean – LSL)/(3* σ overall)
❖ PpU = (USL – Process Mean)/(3* σ overall)
❖ Ppk = Min (PpU, PpL )

Differenc e Between Cpk and Ppk
❖ Cpk is calculated using “within”
standard deviation, while Ppk is using
“overall” standard deviation.
❖ Cpk is for short term and Ppk is for long
term.
Taguchi Capability Index - Cpm
❖ Process Capability
Process Capability Studies
❖ Select the process
❖ Data Collection Plan
❖ Measurement System Analysis
❖ Gather data
❖ Confirm normality of data
❖ Confirm that the process is in control
❖ Estimate the process capability
❖ Continually improve process
Process Capability – Attribute Data
❖ When your data is pass/fail instead of
values, you are looking for Attribute
Data Process Capability.
❖ Common way to do this is to use p, np, c
and u charts. We will cover these charts
later in the Control section.
Proc ess Capability for Non Normal
❖ What if the data is not normal?
❖ Check for Normality – Anderson Darling

Test
❖ Transformation Basics
❖ Box-Cox Power Transformation
25
20
Check for Normality
Frequency
15
10
5
0
❖ Non Normal Cycle Time File from SigmaXL
804
1561
2319
3077
3834
4592
5349
6107
46
Cycle Time (Minutes)
❖ Histogram 1.83
NSCORE
0.83
❖ SigmaXL > Customer Data > Graphical -0.17
-1.17
Tool> Basic Histogram -2.17
0.00
-4000.00
-2000.00
2000.00
4000.00
6000.00
8000.00
Cycle Time (Minutes)
Anderson-Darling Normality Test 5.357
❖ Anderson-Darling Test P-Value (A-D Test) 0.0000
❖ SigmaXL > Customer Data > Graphical

Tool> Normal Probability Plot
Transformation Basics
Transformation Basic s
Transformation Basics
Box-Cox Power Transformation
SigmaXL Demonstration
Process Performance Metrics
❖ Percent Defectives
❖ PPM
❖ DPMO
❖ DPU
❖ Rolled Through Yield
Percent Defectives
❖ Percent of parts having one or more
defects
❖ 2 percent – 2 pieces per 100 pieces
Parts per M illion (PPM )
❖ Defective parts per million.
❖ 2 percent – 2 pieces per 100 pieces
❖ 0.02 x 1,000,000 = 20,000 PPM
Defect vs Defective
❖A nonconforming unit is a defective
unit
❖Defect is nonconformance on one of

many possible quality characteristics of
a unit that causes customer
dissatisfaction.
Defect Opportunity
❖Circumstances in which CTQ can fail to
meet.
❖Number of defect opportunities relate to
complexity of unit.
❖Complex units – Greater opportunities of
defect than simple units
❖Examples:
❖ A units has 5 parts, and in each part there are 3
opportunities of defects – Total defect
opportunities are 5 x 3 = 15
Defects Per Opportunity (DPO)
❖Number of defects divided by number of
defect opportunities
❖Examples:
❖ In previous case (15 defect opportunities), if 10
units have 2 defects.
❖ DPO = 2 / (15 x 10) = 0.0133333

Defec t Per M illion Opportunities (DPM O)
❖DPO multiplies by one million
❖Examples:
❖ In previous case (15 defect opportunities), if 10
units have 2 defects.
❖ DPO = 2 / (15 x 10) = 0.0133333

❖ DPMO = 0.013333333 x 1,000,000 = 13,333
❖13,333 DPMO is 3.7 Sigma

❖Six Sigma performance is 3.4 DPMO
Defects Per Unit
❖ Number of Defects / Number of Units
❖ In 3,000 welds defects observed were:

❖ 10 Cracks
❖ 15 Porosity
❖ 5 Undercut
❖ DPU = (10+15+5)/3,000 = 30/3,000

= 1/100 = 0.01
Rolled Through Yield
❖ Units entering a process = P
❖ Defective Units = D
❖ Yield = (P-D)/P
❖ Y1 = 0.99, Y2 =0.95, Y3=0.98
❖ RTY = Y1 . Y2 . Y3 = 0.99x0.95x0.98
=0.92169
Short Term vs Long Term Capability
❖ Cp Cpk – Short term
❖ Pp Ppk – Long term
❖ In both of these measurements the

difference lies in the calculation of
sigma.

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Process Flow Metrics

❖ Work in progress (WIP)

❖ Customer wants 10 units per week,

❖ Takt time is not related to how much time it

❖ Customer wants 10 units per week,

❖ Takt time is not related to how much time it

Process 1 Process 2 Process 3

3.5 Hours 3.5 Hours 3.5 Hours

❖ Takt time = 3.5 hrs

Process 1 Process 2 Process 3

1 Hours 3.5 Hours 3.5 Hours

❖ Takt time = 3.5 hrs

❖ Cycle time is value added time only.

Process 1 Process 2 Process 3

1 Hours 3.5 Hours 1 Hours

❖ Process mapping is the process of

Current Lean Future

Waiting X-ray Reception Doctor

Exam Doctor X-ray

Qualitative Data Quantitative Data

Nominal Ordinal Interval Ratio

Nominal Ordinal Interval Ratio

Nominal Ordinal Interval Ratio

Nominal Ordinal Interval Ratio

Nominal Ordinal Interval Ratio

Nominal Ordinal Interval Ratio

Nominal Ordinal Interval Ratio

Qualitative Data Quantitative Data

Accidental / Convenience Sampling

Simple Random Sampling

Systematic Random Sampling

Stratified Random Sampling

Simple Random Sampling

Systematic Random Sampling

Stratified Random Sampling

Systematic Random Sampling

Stratified Random Sampling

Systematic Random Sampling

Stratified Random Sampling

Accidental / Convenience Sampling

Accidental / Convenience Sampling

Accidental / Convenience Sampling

❖ Delete the row

Why not 6σms ?

Nested gage R&R study

❖ Involves three Main activities:

ampere A electric current I

candela cd luminous intensity J

metre The distance travelled by light in vacuum in 1/299792458 second.

kilogram The mass of the international prototype kilogram.

kelvin 1/273.16 of the thermodynamic temperature of the triple point of water

The amount of substance of a system which contains as many elementary

Third Party Labs

❖ Affected by extreme values Mean Mode Median Percentile

❖ Example: 10, 11, 14, 9, 6

❖ Example: 10, 11, 14, 9, 6, 10 Mean Mode Median Percentile

❖ In ascending order - 6,9,10,11,14 Quartile

❖ Example: 10, 11, 14, 9, 6, 11

parts when arranged in ascending or

❖ Quartile divides data in 4 parts

❖ P=percentile, n=numbers in data set Quartile

❖ If i is whole number – Percentile is

❖ IQR = Q3-Q1 Interquartile Standard