Quality

Management

By
Himan Punchihewa

Industrial Engineering 1
University of Moratuwa
 Aim and objectives
Aim: to introduce basic concepts in quality
managements and tools used for quality
improvement
Objectives:
To emphasise the importance of quality
management
To learn quality control tools to achieve quality
assurance objectives
Key Questions:
What is quality & quality cost?
What is Total Quality and TQM?
What are the quality tools?
What is ISO standards?
What are the QC procedures

Industrial Engineering University of Moratuwa 2

 What is quality?
Oxford American dictionary:
A degree or level of excellence
American society for quality:
Totality of features and characteristics of a product
or service that bears on its ability to satisfy stated
or implied needs
Philip Crosby:
Conformance to requirements
W.E. Deming:
A predictable degree of uniformity and
dependability at low cost and suited to the market

A subjective term for which each person has

his or her own definition
Industrial Engineering 3
University of Moratuwa
 What is quality?
(Customers perspective)

Customers look at design specifications

Fitness for use
How well a product does what it is intended to do?
Quality of design
What or how it looks like?
Is the product good or bad? feeling/sense, etc.
Example
A Mercedes and a Ford car
Both equally fit for use
But with different quality of design i.e. dimensions of
quality

4
Industrial Engineering University of Moratuwa
 Dimensions of quality of
goods
Performance
What are the basic operating characteristics of the
product?
How well a car handles its mileage?
Features
What are the basic features?
What are the extra items added to basic features?
Is a stereo CD included? Or is the interior leather?
Reliability
Probability that a product will operate properly within an
expected time frame
Will the TV work without repair for about seven years?
Conformance
Degree to which a product meets preestablished
standards
Durability
How long the product lasts before replacement?
Industrial Engineering University of Moratuwa 5
 Dimensions of quality of goods
Serviceability
Ease of repairing
Speed of repairs
Courtesy and competence of repair person
Aesthetics
How a product looks, feels, sounds, smells, or tastes?
Safety
Assurance that customer will not suffer injury or harm
An especially important consideration in machines
Perceptions
Subjective perceptions based on brand name, &
advertising

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 Dimensions of quality of
services
Time and timeliness
How long must a customer wait for service?
Is it completed on time?
Is an overnight package delivered overnight?
Completeness
Is everything customer asked for provided?
Is a mail order from catalogue shop complete in
delivery?
Courtesy
How are customers treated by employees?
Are catalogue phone operators nice and pleasant?
Consistency
Is the same level of service provided to each customer
each time?
Is your newspaperUniversity
Industrial Engineering deliveredof Moratuwaon time every morning?
7
 Dimensions of quality of services
Accessibility and convenience
How easy is it to obtain a service?
Does the service representative answer your calls quickly?
Accuracy
Is the service performed right every time?
Is your bank or credit card statement correct every month?
Responsiveness
How well does the company react to unusual situations?
How well is a telephone operator able to respond to a
customers request?

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 What is quality?
(Producers perspectives)
Quality of products
Does it conform to requirements?
What is the cost of quality?
Can the profit be increased by increasing conformance?
Focus on quality of conformance
Making sure goods/services are produced according to
design specifications
if new tyres do not conform to specifications, they
wobble
if a hotel room is not clean when a guest checks in, hotel
is not functioning according to specifications
Focus on quality conformance to make sure to
comply with design specifications
Industrial Engineering 9
University of Moratuwa
 Meaning of quality

Customers & producers perspectives depend on each other

Producers perspective focus on
Production process and COST
Customers perspective focus on
Fitness for use and PRICE
But, customers view must dominate
Industrial Engineering University of Moratuwa 10
 Quality costs
Cost of achieving good quality
Prevention costs
Costs incurred during product design and manufacture
Keep appraisal cost at minimum
Appraisal costs
Costs incurred to discover the condition of the product
Cost of poor quality
Internal failure costs
Costs for defects incurred within the system
Such cost would disappear if no defects existed prior to
delivery
External failure costs
Cost of defects found after delivery

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 Prevention cost
Quality planning Training costs
costs Quality training programs
Developing and Information costs
implementing quality Acquiring and
management maintaining data and
programs analysis of reports
Product-design Purchase costs
costs Buy new equipment or
Designing products modifications
with quality
characteristics
Process costs
Making production
process conform toUniversity of Moratuwa
Industrial Engineering 12
 Appraisal cost
Inspection and testing
Testing and inspecting materials, parts and
product at various stages and at end of
process
Test equipment costs
Maintaining equipment used in testing
quality characteristics of products
Operator costs
Time spent by operators to gather data for
testing product quality, to make
adjustments, and to stop work to assess
quality

Industrial Engineering University of Moratuwa 13

 Internal failure cost
Scrap costs Process failure costs
Discarded products, Determining/
labour, material and investigating why
other indirect costs production process is
producing poor-quality
products
Rework costs
Fixing defective
products
Price-downgrading
costs
Discounting poor-quality
Process downtime products - that is,
costs selling products as
Shutting down of seconds
process
Industrial Engineering University of Moratuwa 14
 External failure cost
Customer complaint Product liability
costs costs
Investigating and Litigation, liability
responding to customer and customer injury
complaints Lost sales costs
Product return costs Dissatisfaction, not
Handling and replacing
making additional
poor-quality products
returned by customers purchases
Warranty claims costs
Complying with
warranties

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 Contribution to total quality
cost
Total Total cost
cost
External failure

Internal failure

Prevention

Appraisal

Quality improvement

Industrial Engineering University of Moratuwa 16

 What is total quality?
Different definitions
Continuous improvement quality of products/ processes
Totally integrated environment
Improving performance at all levels
To maximise competitiveness

Contributors:
People: empower people to do the job
Processes: improve the processes continually and forever
Measures: use quality tools to measure the quality and
benchmark standards

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 How total quality is
achieved?
Strategically-based approach: competitiveness
Customer focus: external & internal customers,
processes & environment
Obsession to quality: How can we do this better
Scientific approach: Use of hard data for
improvement, monitoring and benchmarking
Long-term commitment: A corporate culture
Teamwork: Partnerships
Continuous process improvement
Education & training, unity of purpose at all
levels

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 Total quality pioneers
W.E. Deming, J.M. Juran, P.B. Cosby along with
others

Demings contributions:
14 points in Demings philosophy
Demings 7 deadly diseases

Industrial Engineering University of Moratuwa 19

 The Deming cycle

Steps in the cycle

(PDCA):
Plan: Conduct consumer
research, use it to plan
Do: Produce the product

Check: Check products to

make sure it was

produced in accordance
with the plan
Act: Market the product

Analyze how the product

is received in the
marketplace in terms of
quality, cost and other
criteria (Research) University of Moratuwa
Industrial Engineering 20
 Demings 14 points
To develop a new attitude towards work and work
environment for continuous improvement
14 Points:
1. Create constancy of purpose towards improvement
2. Adopt new philosophy: Learn new things, awaken to
challenges, take responsibilities as a leader
3. Stop depending on inspection to achieve quality: i.e.
build in quality from start
4. Stop awarding contracts on the basis of low bids: i.e.
select suppliers based on quality
5. Constantly improve system and workers: increase
quality & reduce quality costs
6. Institute on the job training: improve the skills and
know what they are doing & why

Industrial Engineering 21
University of Moratuwa
 Demings 14 points
7. Instill or inspire leadership among supervisors: help
the people, but not to harass the workers
8. Eliminate fear among employees: working as a team
9. Eliminate barriers: (between departments) so that
workers could work as a team
10.Eliminate slogans (targets for the work force): which
create adverse relationships
11.Eliminate quota to management
12.Enhance worker pride: which increases contribution
13.Institute vigorous training and education programs:
to improve not only know-how, but also know-why
14.Develop a commitment from top management: to
implement above 13 points

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 Demings 7 deadly
diseases
1. Lack of constancy (unfaithful) of purpose to plan
products and services that have a market sufficient to
keep the company in business and provide jobs
2. Emphasis on short-term profits: short-term thinking that
is driven by external pressure (shareholders, loans, etc.)
3. Personnel review systems for managers: without
providing methods to accomplish objectives
(performance evaluations, annual appraisal are
diseases)
4. Job hopping by managers (to go on the ladder)
5. Use of unavailable or predicted data for decision making
6. Excessive medical costs (getting leave more often)
7. Excessive costs of liability driven by lawyers
Industrial Engineering 23
University of Moratuwa
 Common errors in TQ
Senior management delegation & poor leadership:
hired consultant rather than leadership to get all involved
Team mania: Team leaders and team players are the key
Deployment process: quality initiatives without a
development plan to integrate all elements
Taking a narrow, dogmatic approach: without
considering tailor-made quality programmes to individual
needs
Confusion about the difference among education,
awareness, inspiration and skill building: not
providing them at right time at right level (e.g. 5 day
training programme does not guarantee practical skills,
unless they practically use what they are taught)

Industrial Engineering 24
University of Moratuwa
 What is total quality
management?
Definition:
Managing the entire organisation from supplier to
customer so that it excels in all dimensions of
goods/services that are important to the customer

Two fundamental operational goals:

Careful design of the product or service

Ensuring that the organisations systems consistently

produce design
Industrial Engineering 25
University of Moratuwa
 TQM and other
developments
With TQM, major attention was given to promote
TQM
Other developments:
ISO standards
ISO 9000: quality management
ISO 1400: environmental management
Each focus on continuous improvement of organisation
with respect to quality and environment
Both concern the way an organisation goes about its
work.
They are not goods/services standards
They are process standards and can be used by product
manufacturers and service providers
Malcom Baldrige national quality award
Established in 1988 by the US government
Designed to promote TQM practices
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 Tools in TQM
Tools for generating ideas (may be used for
organising as well)
Checksheets
Scatter diagrams
Cause-and-effect diagrams
Cause-and-effect matrix (e.g. QFD)
Tools to organise data (may be used for
generating ideas as well)
Pareto charts
Flowcharts & process flow charts
Tools for identifying problems
Histogram
Statistical process control chart

Industrial Engineering University of Moratuwa 27

 Checksheets
An organised method to record data
Generate the idea looking at the pattern
Incorporate with histograms

Hour
Defect 1 2 3 4 5 6 7 8
A /// / / / / /// /
B // / / / // ///
C / // // ////

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 Histograms
A distribution showing the frequency of
occurrences of a variable
Generate ideas and help to identify the problem

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 Scatter diagrams
A graph of the value of one variable vs. another variable
Generate the idea looking at the pattern
Help to identify the problem
Productivity

Absenteeism

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 Cause-and-effect
diagrams
Also known as fish-bone diagram
A tool that identifies process elements (causes)
that might effect an outcome
Generate the idea about the causes and their
effect
Cause
Materials Methods
Effect

Manpower Machinery
Industrial Engineering University of Moratuwa 31
 Example for cause-&-
effect
Material Method
(ball) (shooting process)
Grain/Feel Aiming point
(grip)
Size of ball
Air pressure Bend knees
Hand position
Balance
Lopsidedness
Follow-through
Missed
Training Rim size free-throws

Conditioning Motivation Rim height

Consistency Rim alignment Backboard

stability
Concentration

Machine
Manpower
(hoop &
(shooter)
backboard)
Industrial Engineering University of Moratuwa 32
 Cause-and-effect matrix
Grid used to prioritise causes of quality problems
ex: quality issues in service (hospital) sector
Rank and weight for each variable

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 Pareto charts
A graph to identify and plot problems or defects in
descending order of frequency
Organise by looking at the pattern
Frequency

Percent

A B C D E

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 Pareto analysis in quality
cost
Quality costs are distributed in differently for different
products, plants, etc.
Some cost component may contribute largely to
Quality
Example: Breakdown of annual quality losses in
terms of various accounting categories inCumulative
a workshop% of
Accounting Annual quality % of Total quality
total quality
category loss (Rs00) loss in the category
loss
Scrap cost 556 61 61
Customer claim 122 14 75
Rework cost 78 9 84
High material cost 67 7 91
Down time cost 37 4 95
Retuned items
28 3 98
cost
High testing cost 19 2 100
Industrial Engineering University of Moratuwa 35
 Pareto analysis for scrap
losses
Break-down of scrap losses by product type
Cumulative
Annual scrap % of Cumulative %
Product type scrap loss
loss (Rs00) scrap loss of scrap loss
(Rs00)
A 132 132 24 24
B 96 228 17 41
C 72 300 13 54
D 68 368 12 66
E 47 415 8 74
F 33 448 6 80
12 other Types 108 556 20 100
Worst six types of products account for Rs. 44,800
which is 80% of the scarp
Decision: continue the analysis to find out the

main defects that contributes to scraps on above 6

Industrial Engineering University of Moratuwa 36
products
 Flowcharts
A chart that describes the steps in a process
Generate the idea looking at the pattern
ExampleMRI flowchart

1. Physician schedules MRI 7. If unsatisfactory, go to 5

2. Patient taken to MRI 8. Patient taken back to room
3. Patient signs in 9. MRI read by radiologist
4. Patient is prepped 10. MRI report transferred to
5. Technician carries out MRI physician
6. Technician inspects film 11. Patient and physician discuss

8
80%
1 2 3 4 5 6 7 11
9 10
20%
Industrial Engineering University of Moratuwa 37
 Process flowcharts
Chart that clearly describes the steps in a
process, displaying different operations (see next
slide)
Generate the idea looking at the pattern
Different process flowcharts
Outline process chart
Flow process chart
- workflow process chart
- material process chart
- equipment process chart
Two handed process chart
Procedure flowchart

Industrial Engineering University of Moratuwa 38

 Process chart symbols
Symbol Name Description
Indicates main steps in a process,
OPERATION
method or procedure
Indicates an inspection for quality
INSPECTION
and/or check for quantity
Indicates the movement of workers,
TRANSPORT material or equipment from place to
place
Indicates a delay in the sequence of
DELAY (Temporary
events: e.g. waiting between
storage)
consecutive operations
STORE Indicates a controlled storage in which
(Permanent material is received into or issued from
storage) a store
Indicates the decision point for other
DECESION
operation

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 Statistical process control
charts
Indication about the problem
Uses statistics and control charts to tell when to
take corrective action
Drives to process improvement

Four key steps

Upper control limit
Measure the
Target value
process
Lower control limit
When a change is

indicated, find the Time

assignable cause
Eliminate the

cause
Restart the

revised process
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 TQM services
Service quality is more difficult to measure than
the quality of goods
Service quality perceptions depend on
Intangible differences between products
Intangible expectations that customers have of
those products

The operations manager must recognise

Importance of tangible components of services
Significance of service process
Judgment of services against the customers
expectations

Industrial Engineering University of Moratuwa 41

Service specifications
united parcel service

Production & Operations

Management University of Moratuwa 42
Industrial Engineering
 ISO 9001: Quality
management
ISO 9001 is for quality management

Quality management:
Means what the organisation does to ensure that
its products or services satisfy the customer's
quality requirements and to enhance customer
satisfaction
Comply with any regulations applicable.
Achieve continual improvement

Adopted in 1987 with ISO 9000, use > 160 countries

A prerequisite for global competition
Many overseas companies will not do business with
a supplier unless it has ISO 9000 certification

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University of Moratuwa
 Different ISO 9000 certifications
ISO 9000 series directs you to "document what you
do and then do as you documented
Different Series:
ISO 9000 QM & QA standards and guidelines for selection
& use
ISO 9001 model for quality assurance in design and
development, production, installation and servicing
ISO 9002 model for quality assurance in production and
installation
ISO 9003 model for quality assurance in final inspections
and tests
ISO 9004- quality management and quality system
elements: guidelines
Read ISO 9000 first and select appropriate module
depending on requirement
Industrial Engineering University of Moratuwa 44
 Different standards
USA different notations Q9 series
EC different notation EN2900 series
ISO 14001 is for environmental management
ISO 14001 standard to make sure
Minimize harmful effects on the environment
caused by its activities
To conform to applicable regulatory requirements,
and
To achieve continual improvement of its
environmental performance

Industrial Engineering University of Moratuwa 45

 ISO certification
ISO 9001:2000 - only
standard that carries
third-party certification
ISO 9000
accreditation process
First party: A firm audits
itself against ISO 9000
standards
Second party: A customer
audits its supplier
Third party: A "qualified"
national or international
standards or certifying
agency serves as auditor
Industrial Engineering University of Moratuwa 46
 Quality management
Quality Control
Procedure

Industrial Engineering University of Moratuwa 47

 Quality control (QC)
procedure
QC procedure is to ensure the conformity to the
specifications during manufacture
Typical functions of QC department:
Testing designs for reliability in the lab and the field
Planning and bugging the QC program
Designing and overseeing QC systems & inspection
Three basic stages in QC procedure:

To make sure To prevent To prevent

arrival of only manufacturing bad defectives from
good inputs quality products reaching market
Industrial Engineering University of Moratuwa 48
 Inspection of incoming
materials
Some parts are bought or sub-contracted
Typically, all should be checked & tested for
specification
Procedure varies with types of materials & QC
standard
Inspection of incoming materials
Purchase items from reliable suppliers without inspection
Inspection in the own premises or supplier premises
Inspection of all parts (full inspection) or samples
Vendor rating - to decide upon a reliable supplier
Factors to be considered in vendor rating
% of acceptable parts received
% warranty claim applicable
Quality of packaging
Achieving delivery dates
Price, including discounts etc.
Industrial Engineering University of Moratuwa 49
 Inspection of WIP items
To ensure that faulty/defective items do not
proceed
Also, to predict when the processes are likely to
produce defective items & then to take remedial
action

Type of inspection:
In jobbing: every item after most operations
In batch, first & last items may be sufficient
In mass, sampling inspection is frequently undertaken
e.g. in chemical industries - final product - reactions of
several products: check composition, properties at different
stages

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 Inspection of output
products
Last chance to find defects
Final inspection may be considered as
unfortunate
All previous inspections were to ensure that
defectives or faulty products are not manufactured
But, components can be damaged at any time
during process
So, final inspection is not a reflection of
ineffectiveness of earlier
Final Inspection: either sampling/exhaustive
checking

Inadequate control at one stage will necessitate

greater effort at subsequent stages

Industrial Engineering University of Moratuwa 51

 Assessment of quality

Variables (measurable parameters like length,

weight)
Attributes (appearance, taste, etc., which are
non-measurable

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 Statistical quality control
procedure
Common procedures:
Acceptance sampling (AS) for input & output
products
Statistical process quality control during the
manufacture
Both techniques can be used for variables and
attributes
Statistical quality control process:

Industrial Engineering University of Moratuwa 53

 Acceptance sampling
(AS)-1
Evaluating a sample of product for the purpose of
accepting or rejecting the entire lot
Perform on goods that already exist to determine what
percentage of products conforms to specifications
AS is executed through a sampling plan
Inference is made on the quality of the batch based on sample

AS is used when:
The cost of inspection is high
100% inspection is monotonous, causing inspection errors
The inspection is destructive (e.g.: destructive testing)
There will be sampling errors that will cause costs to the
producer and the consumer
Less information available than in 100% inspection

Industrial Engineering University of Moratuwa 54

 Acceptance sampling
(AS)-2
Monitoring quality of incoming materials and
outgoing finished products
Quality of the lot is determined by:
One sample- a single sampling plan
Two samples- double sampling plan
Multiple samples- multiple sampling plan
Two main parameters in sampling plans:
Sample size (No. of units in the sample n)
Acceptance number (maximum No. of defective units
for acceptance c)
Sample size n may vary up to all the items in the
lot (N)

The batch is accepted when No. of defectives x

<= c
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 Sampling risk or errors
Neither sampling nor 100% inspection guarantee
no defects or every defect in a lot were found
Sampling involves a risk that the sample will not
adequately reflect the conditions in the lot
100% inspection has the risk that monotony which will
result in inspectors missing some of the defectives
Two kinds of sampling risks:
Good lots can be rejected: risk to producer and the
probability of rejecting a high-quality lot- producers
risk denoted by Alpha
Bad lots can be accepted: risk to customer and the
probability of accepting a low-quality- customers risk
denoted by Beta
These risks can be quantified using the
Operating Characteristic (OC) curve for the
sampling plan
Industrial Engineering University of Moratuwa 56
 OC curve
A graph of the probability that the sampling plan will
accept the lot vs. % defectives in a lot
Ideally, customer would like 100% of the products
free from defects
Some lower quality level has to be accepted
Known as Acceptable Quality Level (AQL)
Even with AQL, it is not 100% certain that batch
conforms to the standard.
If 100% inspection (i.e. n=N) is carried out- 100%
certain that the batches do or do not conform to the
agreed quality

If max. % of defectives per batch (AQL) is x (say 20%),

then the OC curve can be represented by a rectangle.

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 Construction of OC
curve

Sample size (n) & acceptance number (c) should be

known
If the lot size (N) is large compared to the sample size
(n):
Probability of finding c or less defectives P(a) is based on
n! probability
Binomial c (n - c)
Where, c number of defectives found
distribution for a given % of defectives
P(c) = Pq n Sample size
p Proportion of defectives in batch
c!(n - 1)! (1-p)
q Proportion of good items in batch

P(c) Probability of finding c

defectives
Industrial Engineering University of Moratuwa 58
 Example for OC curve
construction
Sample of 10 (n) is drawn from a batch. If acceptable number
of defectives (c) is 1 or less, and actual percentage defectives
in the batch is 10% (p=0.1, q=0.9), find the probability of
finding 1 or less defectives
P(<1) = P(1) + P(0) = 0.392 + 0.352 = 0.744 = 74.4%
Similar calculation for various values for p (20%,30%,40%,
etc.)
e.g.: P(<1) = 0.149, when p is 30%
[P(<1)] decreases as percentages of defectives increases

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 Use of Thorndike chart

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 Simplification by Thorndike
chart
When n is large, use of Binomial is difficult
When number of defectives (n) is small relative to the lot
size (N), the Poison distribution can be used
To simplify further, Thorndike Chart is used to construct
the OC curve
Thorndike chart shows:
Probability of occurrence of c or less defects [P(a)]
[PD x n /100]
Using the Thorndike chart, P(a) can be calculated for a
given value of c, at different PD levels to construct OC
Example: If c is 2% (i.e. 2 defects from sample size of
100), using Thorndike chart, construct the OC curve for
sample sizes (n) of 100, 200 and 300 (i.e. c=2, 4 & 6)
For construction purpose, assume actual PD varies from 1 to
7
Industrial Engineering University of Moratuwa 61
 Thorndike chart to construct OC
curve
For each (PDxn/100), trace P(a) values from Thorndike
chart for c=2, 4 and 6
n = 100 (c=2) n = 200 (c=4) n = 300 (c=6)
PD in P(a) P(a)
a lot (PD x (PD x (PD x P(a)
[from [from
n)/100 n)/100 n)/100 [from chart]
chart] chart]
1 1 0.92 2 0.95 3 0.97
2 2 0.65 4 0.65 6 0.65
3 3 0.44 6 0.30 9 0.20
4 4 0.26 8 0.10 12 0.05
5 5 0.13 10 0.03 15 0.008
6 6 0.06 12 0.007 18 0.0004
7 7 0.04 14 0.0005 21 0.0001

Based on PD and P(a), three OC curves can

be constructed
Industrial Engineering University of Moratuwa 62
 OC curve using Thorndike
chart

When the sample size becomes larger, OC curve

reaches to ideal situation
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 Behaviour of OC curve
The decision on acceptance or rejection of the lot
or batch depends on:
Sample size (n)
Acceptance number (c)
Lot size (N) - in a minor way
Effect of sample size:

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 Lot tolerance percent
defective
With increase of n (c-constant), OC curve reach

to ideal
Similar results, when c or AQL increases (n-

constant)
Increase of AQL depends on the product
Producers objective: to ensure
that thee.g. for safety related products, c should be 0

sampling plan has a low
probability of rejecting good lots
Consumers objective: to
ensure that the sampling plan has
a low probability of accepting bad
lots
Lots defined with lowest quality
level- Lot Tolerance Percent
Defective (LTPD) or Limiting
Quality
Industrial (LQ)
Engineering University of Moratuwa 65
 Quality indices in AS
Accepted quality level (AQL):
Maximum % defectives or maximum No. of defects per
hundred accepted as high quality lot
Worst quality level that is still considered satisfactory
As AQL is an acceptable level, P(a) at AQL should be high
Lot tolerance percent defectives (LTPD):
Also known as Rejectable Quality Level (RQL)
Definition of unsatisfactory quality
As LTPD or RQL is an unacceptable level, P(a) should be
low
Consumers risk ():
Probability at LTPD is referred as consumers risk
Risk that actually customer has if the unaccepted quality
range lot is accepted

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 Quality Indices in AS
Producers risk ():
This is the probability associated with rejecting high
quality lot
Graphical representation of quality indices:

Acceptable Indifferent quality Unacceptable

quality range quality range

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 Design of sampling
plans
Choices for n and c determine characteristics
of plan
Standard procedures are available to determine
n &c
Needs four items of information: AQL, LTPD,
and
Assigning numeric values to these 4 parameters
is largely a matter of managerial judgment
Once values are assigned, n and c can be
determined
Example:
High-Tech produces industries scanners to detect speed
traps
The PCB of scanners are purchased from an outside

vendor
Industrial Engineering University of Moratuwa 68
Vendor produces boards to an AQL of 2% defectives and
 Design of sampling plans
Parameters AQL=0.02, = 0.05, LTPD = 0.08 &
= 0.10
To find n and c, pre-defined standard tables are
used
Acceptanc
(LTPD)
Excerpts /
from Acceptance (LTPD) /
e number n xstandard
AQL value table n x AQL
(AQL) number (c) (AQL)
(c)
0 44.890 0.052 5 3.549 2.613
1 10.946 0.355 6 3.206 3.286
2 06.509 0.818 7 2.957 3.981
3 04.890 1.366 8 2.768 4.695
4
Ratio of04.057
LTPD/AQL1.970
= 0.08/0.02 9= 4 2.618 5.426
Look same ratio or higher value in table
Nearest value is 4.057, which gives c as 4
In the same raw, n*AQL = 1.970 and it n = 98.5 (or 99)
Industrial Engineering University of Moratuwa 69
 Sampling plan for the
example
P ro b ab ility of accep tan ce
1
0.9 = .05 (producers risk)
0.8
0.7 n = 99
0.6 c=4
0.5
0.4
0.3 =.10
0.2 (consumers risk)
0.1
0
1 2 3 4 5 6 7 8 9 10 11 12
AQL LTPD
Percent defective

Choosing what PD in a sampling plan is a vital

If managers are strict in defining good quality, the

costs of purchasing such high quality can become

extremely high
Accepting high percent defectives can result in

Industrialproduction
Engineering difficulties, high
University scarp and rework
of Moratuwa 70 costs,
 Various sampling plans
Published sampling tables give a choice among
single, double and multiple planning
Single sampling plan:
A random sample of n items is dawn from the lot
If the number of defectives is less than or equal to the
acceptance number (c), then the lot is accepted
Double sampling plan:
First, a smaller number of sample is drawn from the lot
Decision is reached on the basis of first sample regardless
of size
Second sample is taken, if result from first sample is not
decisive
Since 2nd second sample is only necessary to inspect in
broader-line cases, the average inspection per lot is
generally smaller
Multiple sampling plans:
One or two of several
Industrial Engineering
smaller samples are taken
University of Moratuwa 71
 Double sampling plans

Double/Multiple sampling plans mean less inspection

but are more complicated to administer
Industrial Engineering University of Moratuwa 72
 Characteristics of good sampling
plan
The success of QC depends on the sampling plan
chosen

Characteristics of a good sampling plan:

Quality indices should reflect the needs of both parties
Plan should minimize the total cost of inspection
Plan should have built-in flexibility to reflect changes in
lot sizes, quality of products & any other factors
The plan should be simple to explain and administer

Industrial Engineering University of Moratuwa 73

 Statistical process control
(SPC)
Controlling the quality during the manufacturing is
particularly important, since:
It is during manufacture that steps should be
taken to prevent the production of defective
items
QC is done by means of checking the variation of
the process (results in variation in products as
well)
Variations are obvious among processes,
products or items in real world
If variation is reduced, quality is improved

Industrial Engineering University of Moratuwa 74

 Variation around us
In an engineering point of view:
Pistons must fit the cylinders
Doors must fit the openings
Electrical components must be compatible
Boxes of tea must have the right amount of tea
Otherwise:
Quality will be unacceptable and customers will be
dissatisfied
But, variation of above or deviations from stds are
obvious
Variation is due to variation of operating system
Variation in all operating systems necessitates
quality analysis and quality control
Industrial Engineering University of Moratuwa 75
 Variation and uniformity
Quality analysis and control is essential because of
the inherent conflict between following two factors:
Variation (non-uniformity) is inevitable in every system:

No two units of output can be produced alike

It is impossible to have zero variability
The production and use of products and services are
most economical when they are of uniform quality (but
impossible)
Variation cannot be eliminated,
It can be reduced and controlled
Then, number of products conform to usage
requirements could be increased
As the uniformity is impossible to achieve, key
questions are:
How much variation
Industrial Engineering exists?
University of Moratuwa 76
 Types of variations
Reasons for variation may not always identified
Two types of variations:
Assignable variation:

Variation caused by factors that are clearly identifiable

and even managed to control
e.g. variation caused by workers (not equally trained or
improper machine adjustment)
Such variation (the quality) can be controlled through
training
Common or random or chance variation:
Variation that is inherent in the process itself falls into

this
e.g. Vibrations in machinery and random variations in

drives
Only random variations should be present in a
process
Industrial
If no assignable var.,
Engineering process is in a state of
University of Moratuwa 77
statistical
 Design specification for
variations
Zero variability - impossible
Establish specifications by designers:
Target value & acceptable limits about the
target
e.g. if the aimed value of a dimension is 10mm, the
design specifications might then be 10mm
0.01mm
Aim or target is producing 10 mm
Anything between 9.98 mm and 10.02 mm is
acceptable
Design limits are referred to as:
Upper and lower specification limits OR
Industrial Engineering University of Moratuwa 78

 Cost of variability
Interpreting design specifications:
Traditional way:
Good quality: any part falls within allowed limit
Bad quality: any part falls outside the rage
Genichi Taguchi (quality expert) view:
No difference between a product just inside or just
outside
But, far greater difference in the quality of a product
targeted and the quality of one that is near a limit
With higher demand, pressure is to reduce the variation
There is no yes/no decision to quality or tolerance,
but it is rather a continuous function
Customer sees not a sharp line, but rather a

graduation of acceptability from the designed

specifications
Industrial Engineering University of Moratuwa 79
 Traditional & Taguchi
views

Example: the temperature in a working place has no

sharp acceptable or unacceptable temperature
But, rather degree of acceptance of aimed

temperature
In production, if products are consistently scrapped

(outside specifications), the curve flattens and scrap

cost (cost of variability)
Industrial Engineering
increases
University of Moratuwa 80
 Process control &
capability
Process control is concerned with monitoring quality
while the product or service is being produced
Objectives of process control:
To provide timely information on whether currently
produced items are meeting design specifications
To detect shifts in the process that signal that future
products may not meet specifications
Process capability:
Ability that process can perform to achieve target
specification
Steps to find process capability:
Select measuring representative units of output (sample
units)
Sample units are measured according to key product

characteristic
Results are presented in the form of histogram or

probability distribution function

Industrial Engineering University of Moratuwa 81
Statistical parameters (e.g. mean, std deviation) to
 Control charts for SPC
In SPC, quality during manufacture is controlled by
means of control charts

Quality control procedure:

Test random sample of output from a process & collect
data
Represent the sample units data on control charts
Determine whether the process is producing items within
a pre-selected range (within control limits)

Industrial Engineering University of Moratuwa 82

 Control Limits-1
Control limits are to decide whether variations are
either unacceptable or necessitate further
examination
If data has shifted away from a purely random
pattern, the process is stopped until the causes are
corrected
Two control limits are established:
Upper Control Limits (UCL)
Lower Control Limits (LCL)
3 make sure 99.7% of the sample
observations to fall within these limits
All random variations are expected to occur within
limits
Industrial Engineering University of Moratuwa 83
 Control Limits-2

(a) In statistical
control and
capable of
Frequency producing within
control limits
Lower control limit Upper control limit
(b) In statistical
control but not
capable of
producing within
control limits

(c) Out of control

Industrial Engineering University of Moratuwa 84

 Example for control limits-
1
Lathe machine is used to turn shafts of a given
diameter
From a pilot study, it was found that the shaft made
by the lathe had a mean diameter of 10 mm
From the data std. deviation can be found:

( x x ) 2 Where, x - Diameter of Individual Shaft

x Mean diameter of all shafts
N N Number of shafts measured

If std dev. is 0.2mm, control chart can be setup

With mean of 10 mm
Control limits are plus or minus 3 (=0.6)

Industrial Engineering University of Moratuwa 85

 Example for control limits-
2

With the control chart, the quality of the shaft

produced by the lathe is tested
Control charts show variations of mean diameter of

shaft
A very few points lie near control limits

Thus, the process is in control

Industrial Engineering University of Moratuwa 86
 Change in mean & Std.
Dev.
If std. dev. becomes larger, then the plots easily
spread out within the control limits
Process change can occur as a result of change
in both characteristics:
Mean
Standard deviation
Two types of control charts:

Mean control chartsx ( chart)
Range control chart (R chart)

Industrial Engineering University of Moratuwa 87

 Sample mean for control
charts-1
In the previous example:

Individual diameters of shaft used to establish control
limits
Control limits were decided based on Normal probability
But, as per central limit theorem in statistics:
Normal distribution tends to apply for samples
rather than individual observations
Therefore in practice:
Samples are measured in regular period (every
hour)
Use the mean of mean samples for control

charts
Where, x - Standard Deviation of the mean
The
x standard
samples
deviation of deviation
the mean samples is
n - Standard of Individual mean
given as: n Sample size

Industrial Engineering University of Moratuwa 88

 Sample mean for control
charts-2
Three population Distribution of
distributions sample means

Beta Mean of sample means = x

Standard
deviation of = =
Normal the sample x n
means

Uniform

| | | | | | |
-3x -2x -1x x +1x +2x +3x

95.45% fall within 2x

99.73% of all x
fall within 3x

Industrial Engineering University of Moratuwa 89

 Sample control limits

Industrial Engineering University of Moratuwa 90

 Calculation of control
limits
Control limits are calculated by defining:
Sample average
Grand average of the sample averages
Standard deviation of the distribution of the sample
averages
UCL and LCL
X

n m m 2

X i
j 1
Xj
j 1
j X
X i 1
X x
n m m 1

UCL X k x LCL X k x
where,Xi = measurement for sample unit i
X
j = average of the sample units in
sample j
k = constant; number of standard
deviations
Industrial Engineering
n = number of units in each sample
University of Moratuwa 91
m = number of samples
 Understanding process
variation
Control charts can be analyzed to understand:
How a process is operating
Whether it is in control or out of control that need
attention
Process variation

Industrial Engineering University of Moratuwa 92

 Process variation

Industrial Engineering University of Moratuwa 93

 Interpretation of process
variation
Not possible to give fixed rules to make any
interpretation to all circumstances
But, a practical guide can be proposed
According to B.S. 2564:1955 standard on
manufacturing, out of control or unstable happen
when:
One point appears near or outside the action
(outer) limits
Two points in any consecutive ten appear near
and/or outside the warning (inner) limits
Three points in any nonconsecutive twenty appear
near and/or outside the warning (inner) limits

What are action & warning limits?

Industrial Engineering University of Moratuwa 94
 Warning and action limits
Warning Limits
Upper and lower limits are placed on either
side of the centre or mean
If points fall beyond the warning limits, it indicate
that the process may be going out of control and
the careful observation or additional sampling is
required

Action limits:
Upper and lower limit are also on either side of
the mean but further away from the warning
limits
When points fall beyond the action limits, it indicates
that immediate steps must be taken to establish and
eliminate the causes
Industrial Engineering University of Moratuwa 95
 Warning & action
(representation)

Industrial Engineering University of Moratuwa 96

 Warning & action
(calculation)
Generally,
Warning limits are set to exclude 5% of points
Action limits are set to exclude 0.2% of points
Expression of upper & lower limits in terms
of mean of mean samples and mean std.
deviation
Upper. Action.Limit .(UAL) X 3.09
n

Upper.Warning .Limit .(UWL) X 1.96
n
Centre.( Mean ) X

Lower.Warning .Limit .( LAL) X 1.96
n

Lower. Action.Limit .( LAL) X 3.09
n
Industrial Engineering University of Moratuwa 97
 Simplification of control limits
In practice, it is tiresome to calculate std.dev. for
samples
More difficult in the industrial environment
Range (W) is used as a measure to replace SD
For small samples: - Std. dev. of individual items produced by the process
Where,
w
W - Mean range of several samples
d n samples)
d A constant depending on the sample size (No. of
n

No the Control Limits:

(w / d n ) (w / d n )
UAL X 3.09 UWL X 1.96
n n
Centre.( Mean ) X
(w / d n ) (w / d n )
LWL X 1.96 LAL X 3.09
n n
Industrial Engineering University of Moratuwa 98
 Simplified control limits for
mean
1.96 / d n n [(Aw) ] and3.09 / d n n [(Aa) ] are
calculated using standard tables
Action.Limit X Aa w
Now
simplified Warning .Limits X Aw w
control limits
Centre.( Mean ) X
for mean:
For Action For Warning
Sample Size (n) Limits (Aa) Limits (Aw)
Simplified 2 1.23 1.94
3 0.67 1.05
factors for 4 0.48 0.75
mean chart: 5 0.38 0.59
6 0.32 0.50
7 0.27 0.43
8 0.24 0.38
9 0.22 0.35
10 0.20 0.32
Industrial Engineering University of Moratuwa 99
 Control limits for range
Process variability also affects standard deviation
The process can only be under control when both
mean and standard deviations are order of control
Therefore, control charts are to be constructed to
plot standard deviations
Like in the control charts for mean, it is found to
be easier to use range (w) as a measure of
variability
In the same way to mean charts, factors in control
limits for ranges can be established
Industrial Engineering University of Moratuwa 100
 Simplified control limits for
range
Simplified control limits for range:
Upper. Action.Limit Aua w
Lower. Action.Limit Ala w
Upper.Warning .Limit Auw w
Lower.Warning .Limit Alw w
Simplified factors for range chart:
Warning Limits Action Limits
Sample Size (n)
Upper (Auw) Lower (Alw) Upper (Aua) Lower (Ala)
2 2.81 0.04 4.12 0.00
3 2.17 0.18 2.98 0.04
4 1.93 0.29 2.57 0.10
5 1.81 0.37 2.34 0.16
6 1.72 0.42 2.21 0.21
7 1.66 0.46 2.11 0.26
8 1.62 0.50 2.04 0.29
9 1.58 0.52 1.99 0.32
10 1.56 0.54 1.94 0.35
Industrial Engineering University of Moratuwa 101
 Example for CC by variables - 1
A machine produces components at a rate of
100/hour
Every hour a random sample of 05 components
were taken and their lengths were measured
Data taken for 10 hours (see the table)
Design CC to check the variation
Measurements (in cm)of Process
Sample No.
Item 1 Item 2 Item 3 Item 4 Item 5
1 9.00 9.10 9.00 9.05 8.95
2 9.10 9.10 9.00 9.05 9.05
3 9.00 9.05 9.00 9.05 9.00
4 9.00 9.00 8.95 9.00 9.05
5 9.00 9.05 9.05 9.05 9.00
6 9.00 9.10 9.10 9.05 9.10
7 9.00 9.10 9.05 9.15 9.10
8 9.00 9.10 9.10 9.00 9.10
9 9.00 9.00 8.95 9.00 9.10
10 9.00 9.05 9.00 9.10 9.10
Industrial Engineering University of Moratuwa 102
 Example for CC by variables - 2
With the control chart designed
Comment on the quality performance of the

process, if the data of samples taken later (see

Samplethe Table) Range
Mean Mean
Sample Range
Length Length
No. (cm) No. (cm)
(cm) (cm)
1 9.020 0.020 11 9.040 0.150
2 9.030 0.100 12 9.040 0.125
3 9.020 0.050 13 9.035 0.100
4 9.030 0.100 14 9.040 0.055
5 9.035 0.025 15 9.030 0.100
6 9.040 0.105 16 9.025 0.050
7 9.020 0.050 17 9.030 0.125
8 9.030 0.100 18 9.025 0.100
9 9.040 0.050 19 9.025 0.150
10 9.035 0.065 20 9.030 0.150
Industrial Engineering University of Moratuwa 103
 Solution to example - 1
Calculate mean and range of the samples to
establish control limits
Sample Mean Range
No. length (cm) (cm)
1 9.02 0.15
2 9.06 0.10
3 9.02 0.05
4 9.00 0.10
5 9.03 0.05
6 9.05 0.10
7 9.07 0.15
8 9.05 0.10
9 8.99 0.05
10 9.02 0.15
Total 90.31 1.00

Industrial Engineering University of Moratuwa 104

 Solution to example - 2
Overall mean and average range:
X 90.31/10 = 9.03 cm
=
w 1.00/10 = 0.10 cm
=
Use the simplified tables to find control limits,
taking sample size =5
0.59 and 0.38 are the constant values for mean
1.81, 0.37, 2.34 and 0.16 are the values for range
Calculate control limits
CL for mean chart: CL for range chart:
UAL = 9.03 + 0.59 x 0.10 = UAL = 0.10 x 2.34 = 0.234
9.089 UWL = 0.10 x 1.81 = 0.181
UWL = 9.03 + 0.38 x 0.10 = Centre = 0.10
9.068 LWL = 0.10 x 0.37 = 0.037
Centre = 9.03 LAL = 0.10 x 0.16 = 0.016
LWL = 9.03 - 0.38 x 0.10 = University of Moratuwa 105
Industrial Engineering
8.992
 Solution to Example - 3
Control Charts for Control Charts for
Mean: Mean:

Comment on:
Based on range
charts WORK OUT AS
Based on mean AN EXERCISE
charts
Based on both
Industrial Engineering University of Moratuwa 106
charts
 Control charts for

attributes
Inspection of samples to be classified as
good/bad/acceptable /unacceptable etc.
Attributes are very common in sampling

Control charts are developed similar to variables

Two types of charts are popular:

Control chart for proportion or percent defective (P-

Chart)
Control chart for number of defects

Unlike in variables, calculate only percentage or number of

defectives in the samples

Unlike in variables, 02 control limits (UAL & UWL) are used

Decision is based on two aspects:

If % of defectives fall within CL, then process is under

control
If % of defectives fall outside CL, improve process
p
From observation of samples (10-20), calculate %

defectives CLs p 3.09 p (1 p )

p
p n
= (Total
Industrial Engineering
No. of defectives)/(Total
University of Moratuwa
No. of inspected)
107
Attributes are very common in sampling
 End of Part 02 of QM

Industrial Engineering University of Moratuwa 108