Chapters 9 & 10 Management of Quality

Cheng Li, Ph.D. Management Department California State University, Los Angeles

McGraw-Hill/Irwin

Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Management of Quality
 What does the term quality mean?  Most popular: Quality is the ability of a product or

service to consistently meet or exceed customer expectations.  A more comprehensive definition:



Quality is a concept that involves multiple dimensions, which are  Excellence  Value  Conformance to specifications  Meeting or exceeding customer expectations

9&10-2

Dimensions of Quality
 Excellence: absolute measures
       

Performance - main characteristics of the product/service Special features - extra characteristics Aesthetics - appearance, feel, smell, taste Safety - risk of injury Reliability - consistency of performance, infrequency of breakdowns Availability: fraction of time equipment is available Durability - useful life of the product/service Service after sale - handling of customer complaints or checking on customer satisfaction
9&10-3

Dimensions of Quality (Contd)

 Value: a relative measure, utility over cost  Conformance relative to specifications, how well

product/service conforms to specifications

 Meeting or exceeding customer expectations: relative to

customer expectations

 Perceived Quality subjective evaluation of quality (e.g.

reputation)

9&10-4

Determinants of Quality
 Product  Conceptual design: setting design objectives


Market research: understanding customer requirements Strategic planning: supporting strategic objectives

 

Design: developing specifications that ensure the achievement of objectives Process design and control*: conformance to specifications

 Service: meeting or exceeding customer

expectations
9&10-5

The Consequences of Poor Quality

 Loss of business: typically happens gradually,

takes a long time to recover if ever  Liability: may be forced into bankruptcy  Loss of productivity: e.g. inspection, rework, material handling of additional inventory, returns, etc.  Costs
  

Internal and external failure costs Costs of additional inspection Costs of additional safety stock
9&10-6

Responsibility for Quality

 Top management: responsible for
 

Creating a quality culture in the organization Setting incentives

 Quality should be in everyones job

description, including but not limited to

 

Process owners, i.e., workers and managers of the process, as well as inspectors Marketing, sales, and customer service

9&10-7

Ethics and Quality

 Having knowledge of below and failing to

correct and report it in a timely manner: unethical and may be illegal.

    

Defective products Substandard service Poor designs Shoddy workmanship Substandard parts and materials

 Anticipated misuse: Producers are liable.

9&10-8

Key Contributors to Quality Management

Contributor
Shewhart Deming Juran Feigenbaum

Known for
Control charts; variance reduction 14 points; special vs. common causes of variation Quality is fitness for use; quality trilogy: planning, control, and improvement Total Quality Control: a total field; the customer defines quality. Quality is free; zero defects Cause-and effect diagrams; quality circles Taguchi loss function to determine the cost of poor quality
9&10-9

Crosby Ishikawa Taguchi

Qu ality

Quality Awards

Baldrige Award Deming Prize

9&10-10

Malcolm Baldrige National Quality Award: Point Values*

 1.0 Leadership (120 pts., 12%)  2.0 Strategic Planning (85 pts., 8.5%)  3.0 Customer and Market Focus (85 pts., 8.5%)  4.0 Measurement, Analysis, and Knowledge

Management (90 pts., 9%)

 5.0 Human Resource Focus (85 pts., 8.5%)  6.0 Process Management (85 pts., 8.5%)  7.0 Business Results (450 pts., 45%)
9&10-11

The Deming Prize

 Honoring W. Edwards Deming  Japans highly coveted award  Main focus on statistical quality control  Japan Quality Award

9&10-12

Quality Certification
 ISO 9000 Series Standards


A set of international standards on quality management and quality assurance Critical to international business Require firms to document their quality-control systems at every step (incoming raw materials, product design, in-process monitoring and so forth)


 

Purpose: identify areas that are causing quality problems and correct them.
Hierarchical approach to documentation of the Quality Management System
9&10-13

ISO 9000 Series

ISO 9000 ISO 9001 Helps companies determine which standard of ISO 9001, 9002, and 9003 applies Outlines guidelines for companies that engaged in design, development, production, installation, and servicing of products or service Similar to 9001, but does not include design and development For companies engaged in final inspection and testing The guidelines for applying the elements of the Quality Management System
9&10-14

ISO 9002 ISO 9003 ISO 9004

ISO 9000 Registration Process

 Self-study:  Document the current system  Gap analysis and corrective actions  Possibly with assistance from consultants  Request an accredited registrar or other third party

audit team for pre-assessment  The final audit by the audit team:


Review of the company's quality manual: Does the documented quality system meet the requirement of ISO 9000? Site visit to verify that the organization is practicing what is documented.

 Registration: issued by the registrar

9&10-15

ISO 14000: Environmental Management

 ISO 14000 a set of environmental

management standards*
  

Minimize how their operations impact the environment Comply with applicable laws and other requirements Continually improve in the above

 As with ISO 9000, certification is performed

by third-party organizations rather than by ISO.

9&10-16

ISO Guidelines
 Guide documents: no certification  Project Management

ISO 10006 Guidelines for quality management in projects  ISO 10007 Guidelines for configuration management  Quality Auditing  ISO 19011 Guidelines for Quajlity and Environmental Management Systems Auditing (ISO 9000 and 14000 series)  Quality Manual Development  ISO 10013 Quality manual development guide

9&10-17

Chapter 10 Quality Control

Cheng Li, Ph.D. Management Department California State University, Los Angeles

McGraw-Hill/Irwin

Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Quality Control Model: Inspection and Process Control

Process control
Vendor Processes Internal Processes Distribution /after-sales Processes

Inputs

Transformation

Outputs

Acceptance sampling

In-process inspection

Acceptance sampling
9&10-19

Inspection

Quality Control Approaches

 Inspection:
 

Filtering out the bad products Decision: quality of a batch of products



e.g. Is this shipment of raw material acceptable?

9&10-20

Quality Control Approaches

 Process Control:  Prevention, instead of after-the-fact filtering  Monitor conditions of the process  Direct monitoring: e.g. monitoring conditions of the equipment and tooling, monitoring quality of faculty, site visits to vendors process (external processes)  Indirect monitoring: through the results produced by the process; e.g. taking small samples of products produced by the process, customer surveys  Assess variances  Take corrective actions if necessary
9&10-21

Phases of Quality Assurance

Inspection before/after production
Acceptance sampling

Corrective action during production

Process control

Quality built into the process

Continuous improvement

The least progressive

The most progressive

9&10-22

Inspection Decisions
 Time: When/How often
 

e.g. in-process vs. post-production e.g. every batch vs. occasional even 100% vs. sampling sample size e.g. centralized vs. on-site for inputs

 Quantity: How much

 

 Location: Where


 No inspection: the goal

9&10-23

Inspection Costs
450 400 350 300 Co st 250 200 150 100 50 0

Given acceptance criterion, as quality , prob{passing defectives} , cost of passing defectives . Result: optimal amount of inspection

Cost of Inspection vs. Cost of Passing Defectives

Cost of Inspection Cost of Passing Defectives Total Cost

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Optimal amount of inspection

Amount of Inspection
9&10-24

Where to Inspect in the Process

 Raw materials and purchased parts  The end of every major phase in the process, including finished

products
 Critical Control Points: e.g. Hazard Analysis and Critical

Control Point (HACCP): points in a food processing process where pollution are most likely to happen
 Others:
 

Before a costly operation Before an irreversible process: e.g. cannot be reworked beyond this point Before a covering process: e.g. packaging

9&10-25

Examples of Inspection Points

Type of business Fast Food Restaurant Inspection points Cashier Counter area Eating area Building Kitchen Parking lot Accounting Building Main desk Characteristics Accuracy Appearance, productivity Cleanliness Appearance Health regulations Safe, well lighted Accuracy, timeliness Appearance, safety Waiting times Accuracy, courtesy Quality, quantity
Table 10-1 modified 9&10-26

Hotel/motel

Supermarket Cashiers Deliveries

Statistical Process Control

 Statistical Process Control (SPC):
  

Statistical evaluation of the output of a process during production Indirect monitoring of the conditions of the process by sampling the output Objective: Is the process in-control?

9&10-27

Statistical Process Control

 Variations and Control


Random variation: Natural variations in the output of process, created by countless minor factors Assignable variation: A variation whose source can be identified

 In-control: random variations only  Out-of-control: random and assignable

variations
9&10-28

A Typical Control Chart

Abnormal variation due to assignable sources Out of control

UCL
Normal variation due to chance Mean

Abnormal variation due to assignable sources

LCL

10 11 12 13 14 15

Sample number
9&10-29

Statistical Process Control

 The Control Process (as applied to SPC) 1. Define: establish control limits 2. Measure: take a sample and measure the units in the sample 3. Compare to a standard: compare the sample results against the control limits 4. Evaluate:  If the sample results are within the limits, in-control;  otherwise, out of control, go on to the next step 5. Take corrective action: investigate the cause of deviation and take corrective actions if necessary 6. Evaluate corrective action and go back to step 2.
9&10-30

A Typical Control Chart

1. Set standards 2. Measure & 3. Compare 4. Evaluate: Out-of-control

UCL
Mean

4. Evaluate: in-control

LCL

10 11 12 13 14 15

Sample number
9&10-31

Observations from Sample Distribution

UCL Each sample is taken from a distribution

LCL 1 2 Sample number 3 4

Figure 10-9
9&10-32

In-Control vs. Out-of-Control

In-control: random variations only, mean = 0,  = 1

-6

-4

-2

In-Control In-Control Shifted by 2 In-Control Shifted by 2 Shifted by 4

9&10-33

Out-of-Control: Shift of the Mean

Out-of-control: shift of the mean

-6

-4

-2

0 In-Control

Shifted by 2

9&10-34

Out-of-Control: Increase of Standard Deviation

Out-of-control: increase of standard deviation,  = 2

-6

-4

-2

2 StdDev=2

In-Control StdDev=1

9&10-35

Types of Control Charts: Overview

 Control Charts for Variables: for continuous

measures such as temperature, volume, etc.  Mean Chart (or X -Chart): detects shift of the mean


Range Chart (or R-Chart: detects change in shape of distribution

 Control Charts for Attributes: for discrete measures

such as number of complaints, scratches, etc.

 

p-Chart: measures percent defective c-Chart: measures # of defects per sample

9&10-36

For Variables: Mean Control Chart

When the process mean ( ) and standard deviation () are known: The standard deviation of sample means (X-bar):

W Standard deviation of sample means : W X ! n Upper Control Limit : UCL ! Q  zW X Lower Control Limit : LCL ! Q  zW X

9&10-37

For Variables: Mean Control Chart

When the process mean ( ) and standard deviation () are known: The standard deviation of sample means (X-bar): Example: Process Mean O = Process Std Dev U= Sample Size n = No. of std dev z = 10 0.3 9 3

Exercise: Calculate UCL and LCL, and draw a mean control chart.

9&10-38

For Variables: Mean & Range Control Charts

When the process mean ( ) and standard deviation () are unknown:
S am pl e U ni t 1 2 3 4 5 m ean range 1 95 94 93 95 95 94. 4 2 2 97 95 96 95 97 96 2 95. 07 3. 00
9&10-39

3 97 96 96 92 93 94. 8 5

Example: Measuring sound pressure level (in decibels) of loudspeakers.

Question: What is the sample size in this example?

G rand A vg X = A vg R ange =

For Variables: Mean & Range Control Charts

When the process mean ( ) and standard deviation () are unknown: For 3-sigma (i.e. standard deviation) control charts: Use Table 10-2 and the sample size to find A2, D3, and D4

Mean ( X ) chart : UCL ! X  A2 R LCL ! X  A2 R Range ( R ) chart : UCL ! D4 R LCL ! D3 R

Exercise: Calculate UCLs and LCLs for X-bar and Range chartts, using data in the previous example.

9&10-40

For Variables: Mean & Range Control Charts

When the process mean ( ) and standard deviation () are unknown: Procedures: 1. Collect multiple samples; 2. Calculate sample averages ( X s) and ranges (Rs); 3. Calculate grand average ( X ) and average of the ranges ( R ); 4. Use Table 10-2 to find A2, D3, and D4; 5. Calculate UCLs and LCLs for the mean and range charts.

9&10-41

For Variables: Mean Control Chart

Mean Control Chart 98

97

UCL = 96.81

96 Sample Mean

Nominal Value = grand avg = 95.07

95

94

LCL = 93.33

93

92 1 2 3 4 5 6 7 8 9 10 Sample No.
9&10-42

For Variables: Range Control Chart

Range Control Chart 8 7 6 5 Range 4 3 2 1

UCL = 6.33

Nominal Value = avg range = 3.00

LCL = 0
0 1 2 3 4 5 6 7 8 9 10 Sample No.
9&10-43

For Variables: Using Mean & Range Control Charts

When the process mean ( ) and standard deviation () are unknown:
U ni D eci s t bel 1 97 2 101 3 96 4 95 5 93

Question: According to the mean and range control charts, is the process in control when this latest sample was collected?

X
9&10-44

Control Chart for Attributes

 p-Chart: Control chart used to monitor the

proportion of defectives in a process



p = percent defective

 c-Chart: Control chart used to monitor the

number of defects per sample



c = number of defects per sample

9&10-45

Use of p-Charts
 Use when observations of each unit can be

placed into two categories: either . or.

  

Good or bad Pass or fail Operate or dont operate

 Question: If the sample size is n, what is the

number of possible outcomes for a given sample?

 The number of possible outcomes is finite.
9&10-46

Use of p-Charts
 Requirements  Multiple samples  Relatively large sample size (n >= 20)  If n = 20, possible results can be found below:  0 defective: p = 0  1 defective: p = 1/20 or 5%  2 defectives: p = 2/20 or 10%, etc.  Note: Percent defective changes in increment of 5%.  If the true percent defective = 0.3%, it will never show

up in the results. Therefore, p-Charts must use large samples.

9&10-47

Use of p-Charts
Construct p-Charts: total # of defectives Percent defective : p ! # of samples v sample size Standard deviation of p : W p ! UCL ! p  zW p LCL ! p  zW p p (1  p ) n

9&10-48

Use of c-Charts
 Use when
  

the number of occurrences per sample can be counted non-occurrences cannot be counted No upper limit on the number of occurrences (i.e. the number of possible outcomes is infinite)
Scratches, chips, dents, or errors per item Cracks or faults per unit of distance Breaks or tears per unit of area Bacteria or pollutants per unit of volume Calls, complaints, failures per unit of time
9&10-49

 Examples
    

Use of c-Charts
Construct c-Charts: total # of defects No. of defects per sample : c ! # of samples Standard deviation of c : W c ! c UCL ! c  zW c LCL ! c  zW c

9&10-50

Use of p-Charts and c-Charts

Example: p-Chart
p-C hartn = 200 # of S am pl e D ef i ectves 1 0 2 1 3 2 4 0 5 2 6 1 7 1

Example: c-Chart
c-C hart S am pl e 1 2 3 4 5 6 7 # of D ef s ect 0 1 2 0 2 1 1

Exercise: Construct a p-Chart and a c-chart respectively.

9&10-51

Type I Error: false alarm

Type I Error: System is in-control, chart falsely indicates out-of-control
2 (2 sigma) Control Chart

2-sigma Control Chart /2 /2

-6

-4

-2

2 In-Control

= probability of Type I Error (z=2:

= 2(1-0.97725) = 0.0455)
9&10-52

Type II Error: failure to detect assignable variation

Mean shifts by 2, Prob{Type II} = 49.99%
Shifted by 2

2 (2 sigma) Control Chart

-6

-4

-2

Shifted 2 2 by

In-Control

Shifted by 2

9&10-53

Type II Error: shift of the mean

Mean shifts by 4, Prob{Type II} decreases to 2.28% 2 (2 sigma) Control Chart
Shifted by 2

-6

-4

-2

0 In-Control

2 Shifted by 2

Shifted4 by 2
Shifted by 4

As the problem worsens, prob{Type II} decreases rapidly, i.e. the problem is more likely to be detected. 9&10-54

Type II Error: increase of standard deviation

Process is out-of-control: StdDev increases to 2, Prob{Type II} = 68.27% Original distribution when the process was in-control

StdDev=2 StdDev=2

-6

-4

-2

StdDev=2 StdDev=2 0

2 StdDev=2

In-Control StdDev=1

Prob{detecting the problem} = 1-68.27% = 31.73%

9&10-55

Control Charts
 Control charts for variables (continuous variables)

Mean Chart ( X - chart ): sample average X-chart  Range Chart (R-chart): sample range, i.e., max-min  Control charts for attributes (discrete variables)  p-chart: defective rate of the sample  c-chart: number of defect per sample


9&10-56

Mean and Range Charts: shift of the mean

(Process mean is shifting upward, but shape remains the same.) Sampling Distribution
UCL

x-Chart
LCL UCL

Detects shift

R-chart
LCL

Does not detect shift

Figure 10-10A
9&10-57

Mean and Range Charts: increase in variability

Sampling Distribution (Process variability is

increasing from 1 to 1.75, but the mean remains unchanged.)

UCL

x-Chart
LCL UCL

Does not reveal increase

R-chart
LCL

Reveals increase
Figure 10-10B
9&10-58

Type I and Type II Errors

Process is In Out

Chart Indicates

In

OK

Type II

Out

Type I

OK

9&10-59

Counting Runs
Figure 10-12
Counting Above/Below Median Runs (7 runs)

B A

B A

B (8 runs)

Figure 10-13
Counting Up/Down Runs

U D U U D
9&10-60

Process Capability
 Tolerances


specifications Natural variability in a process

 Process variability


 Process capability  Process variability relative to specification

9&10-61

Process Capability
Figure 10-15
Lower Specification Upper Specification

Process variability matches specifications

Lower Specification Upper Specification

Process variability well within Lower Upper specifications Specification Specification

Process variability exceeds specifications

9&10-62

Process Capability Ratio

specification width Process capability ratio, Cp = process width Cp = Upper specification lower specification 6W

9&10-63

3 Sigma and 6 Sigma Quality

Lower specification
1350 ppm 1.7 ppm

Upper specification
1350 ppm 1.7 ppm

Process mean +/- 3 Sigma +/- 6 Sigma

9&10-64