Managing Business Process Flows: Ch 9 Six Sigma Quality 1  Product Quality and Process Capability  Total Quality Management  The Quality Improvement Process  Quality Measurement and Analysis  Process Control and Capability  Quality by Design Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Quality Is  Recognized by a non-thinking process, and therefore cannot be defined - Zen and the Art of Motorcycle Maintenance, by R. M. Pirstig  That which makes anything such as it is - Dictionary  Fitness for use - J. Juran and ASQ  Conformance to requirements - P. Crosby  Closeness to the target - deviations mean loss to the society - G. Taguchi  Providing full customer satisfaction at the most economical levels - A. Feigenbaum  Eight dimensional - Performance, Features, Conformance, Reliability, Serviceability, Durability, Aesthetics, and Perception - D. Garvin 2 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Quality and Capability Specifications Design Specifications Features Control Conformance Performance Process Capability Product Quality Product Design Customer Needs Ability to Satisfy Needs Process Design Supplier Selection 3 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Variation = Actual - Expected  Customer Needs - Product Design  Product Design - Process Capability  Process Capability - Process Performance  Process Performance - Product Performance  Product Performance - Customer Perception 4 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Price – Quality Tradeoff Dynamics of competition and rising customer expectations Customer:Maximize Product Utility u (Q) subject to the budget constraint: P ≤ B and competing products available Producer:Select a strategic position Premium Low Value High Value Budget Price Quality 5 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Quality of Design Design Quality Value/Cost Optimum 6 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Quality of Conformance Cost of Nonconformance (Internal + External) Cost of Assurance ( Appraisal + Prevention) Optimum Conformance Quality Total Cost $ 7 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Hank Kolb Case  Sources of the quality problem – Supplier, equipment, worker,supervisor,...  Recommendations – Short, medium, long term  Role of management – Systems  The quality culture – Values 8 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

The Total Quality Process Supplier Relationship Partnership Selection Communication Cooperation Material Procurement Quality at Source Long contracts Inspection Feedback Process Planning Defect Prevention Simplify Mistake-proof Recruit, Train Product Design Build-in Quality Joint design Robust design Producible design Customer Needs Customer Focus Contact Expectations Competition Process Control Early Correction Defect visibility Source detection Local control Product Delivery Deliver Quality Store. Pack, Ship Install, Instruct Interface, Billing Customer Experience Follow Through Product support Service recovery Defect analysis 9 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

The TQM Principles  Customer focus  Organization-wide involvement  Cross-functional communication  Local measurement and control  Mutual cooperation, commitment, trust  Continuous improvement  Long term Perspective 10 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Malcolm Baldrige National Quality Award  Quality as a strategic concept  Customer-driven quality  Design quality - prevention  Employee involvement, training  Supplier quality  Systems and processes - optimization  Continuous improvement  Management by fact and analysis  Leadership, vision, values 11 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

ISO 9000  Series of standards agreed upon by the International Organization for Standardization (ISO)  Adopted in 1987  More than 100 countries  A prerequisite for global competition?  ISO 9000: “document what you do and then do as you documented.” Design Procurement Production Final test Installation Servicing ISO 9003 ISO 9002 ISO Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Quality Improvement Process  Measurement – Measure Variation  Analysis – Analyze Variation  Control – Control Variation  Improvement – Reduce Variation  Innovation – Redesign Product/Process D CA P D CA P Control Improve Innovate Improve 13 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Importance of Metrics  “ When you can measure what you are speaking about, and express it in numbers, you know something about it” - Lord Kelvin ( )  “Count what is countable, measure what is measurable, and what is not measurable, make measurable” - Galileo Galilei ( )  “Data! Data! Data! I can’t make bricks without clay” - Sherlock Holmes in The Adventure of Copper Beeches, by Sir Arthur Conan Doyle  “In God we trust, everyone else must bring data” - W. Edwards Deming 14 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Type of ProblemNumber of Complaints High Pressure Low Pressure Dents Scratches Labels Check Sheet 15 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Pareto Chart The Rule: Vital Few, Trivial Many 16 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Cause - Effect Diagram EquipmentMaterial ProcedurePersonnel High Pressure Problem Nozzle Vendor Specifications Lack of Training Lack of Maintenance Incentives Documentation Design Feedback 17 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Scatter Plot Gas Injector Setting (psi) Can Pressure (psi) 18 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Histogram Specs Mean  = 82.5 psi, Standard Deviation  = 4.2 psi Fraction Defective = 26% (Theoretical = 30.1%) 19 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Run Chart Time Can Pressure 20 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Multi-Vari Chart Variation Within / Between Days 21 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

The Feedback Control Principle Process Disturbances Normal and Abnormal Target SettingsPerformance DecisionInformation 22 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Process Control Chart  Information: Monitor process variability over time  Control Limits: Average + z Normal Variability  Decision Rule: Ignore variability within limits as “normal” Investigate variation outside as “abnormal”  Errors: Type I - False alarm (unnecessary investigation) Type II - Missed signal (to identify and correct) 23 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

X Bar Chart  Average X bar = 82.5 psi  Standard Deviation of X bar = 1.6 psi  Control Limits= Avg X bar + 3 Std of X bar = (3)(1.6) = [77.7, 87.3]  Process is “In Control” (i.e., the mean is stable) UCL LCL 24 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Range (R) Chart  Average Range R = 10.1 psi  Standard Deviation of Range = 3.5 psi  Control Limits: (3)(3.5) = [0, 20.6]  Process Is “In Control” (i.e., variation is stable) UCL LCL 25 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Number of Defects (c) Chart Discrete Quality Measurement: D = Number of “defects” (errors) per unit of work Examples: Number of typos/page, errors/thousand transactions, equipment breakdowns/shift, bags lost/thousand flown, power outages/year, customer complaints/month, defects/car If n = No. of opportunities for defects to occur, and p = Probability of a defect/error occurrence in each then D ~ Binomial (n, p) with mean np, variance np(1-p)  Poisson (m) with m = mean = variance = np, if n is large (≥ 20) and p is small (≤ 0.05) With m = np = average number of defects per unit, Control limits = m + 3 √m 26 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Performance Variation Stable Unstable Trend Cyclical Shift 27 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Process Control and Improvement LCL  UCL Out of ControlIn ControlImproved 28 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Process Capability: Ability to Meet Customer Requirements  Proportion of Output Within Specs: Given a Process in control with  = 82.5 psi and  = 4.2 psi P(Meet Specs) =  Shifting  to 80 yields P(Meet Specs) =  Reducing  to 2.5 yields P(Meet Specs) = LS  US LS  US 29 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Normal distribution => 99.73% of output falls in (  + 3  ) C pk = Min[(US -  ) / 3 , (  - LS) / 3  ] Ex. Can Pressure: C pk = Min[0.1894, ] = With centered process: (US -  = (  - LS) C p = (US - LS)/6  ]= Voice of the Customer Voice of the Process = C p = Defects =10K3K1K100101ppm2 ppb Process Capability Ratio LS  US 30 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Taguchi’s Quality Philosophy Product / Process Target Performance (T) Actual Performance (P) Design Parameters (D) Noise Factors (N): Internal & External LS T US P LS Spec US Loss = k(P - T) 2 not 0 if within specs and 1 if outside On Target is more important than Within Specs 31 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Robust Design  Identify Product/Process Design Parameters that – Have significant / little influence on performance – Minimize performance variation due to noise factors – Minimize the processing cost  Methodology: Statistical Design of Experiments  Examples - Brownie mix, Ina Tile Co., TV Product / Process Target Performance (T) Actual Performance (P) Design Parameters (D) Noise Factors (N): Internal & External 32 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Design for Processing  Simplify – Fewer parts, steps – Modular design  Standardize – Less variety – Standard, proven parts, and procedures  Mistake-proof – Clear specs – Ease of assembly, disassembly, servicing 33 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

The Design Process  Goal – Develop high quality, low cost products, fast  Importance – 80% product cost, 70% quality, 65% success  Conventional – Technology-driven, Isolated, Sequential, Iterative  Difficulties – Revisions, cost overruns, delays, returns, recalls  Solution – Customer-driven, jointly planned, producible 34 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Control, Capability and Design: Review  Every process displays variation in performance: normal or abnormal  Do not tamper with a process that is “in control” with normal variation  Correct an “out of control” process with abnormal variation  Control charts monitor process to identify abnormal variation  Control charts may cause false alarms (or missed signals) by mistaking normal (abnormal) variation for abnormal (normal) variation  Local control yields early detection and correction of abnormal variation  Process “in control” indicates only its internal stability  Process capability is its ability to meet external customer needs  Improving process capability involves (a) changing the mean in the short run, and (b) reducing normal variability in the long run, requiring investment  Robust, simple, standard, mistake - proof design improves process capability  Joint, early involvement in design by all improves product quality, speed, cost 35 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

Capability and Design: Review  Process capability measures its precision in meeting processing requirements  Improving capability involves reducing variation and its impact on product quality  Simplicity, standardization, and mistake - proofing improve process capability  Joint design and early involvement minimizes quality problems, delays, cost 36 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

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