1. 8/25/2015ENGM 720: Statistical Process Control1 ENGM 720 - Lecture 02 Introduction to Statistical Process Control

2. 8/25/2015 ENGM 720: Statistical Process Control 2 Assignment: Reading: Chapter 1 Cursory reading Chapter 2 & 3 Start reading Assignment 1: Review / obtain access to MS Excel Verify access to the Data Analysis Add-In Make sure you can access the class website Make a trial download of the Red Bead data spreadsheet

3. 8/25/2015 ENGM 720: Statistical Process Control 3 Meaning of Quality and Quality Improvement Quality – one of most important consumer decision factors in selecting products and services Understanding / improving quality is key factor for success, growth, and competitive position Substantial return on investment comes from: Improved quality Successful implementation of quality techniques as overall business strategy

4. 8/25/2015 ENGM 720: Statistical Process Control 4 Dimensions of Quality Performance – Will the product do the intended job? Reliability – How often does the product fail? Durability - How long does the product last? Serviceability – How easy is it to repair the product? Aesthetics – What does the product look like? Features – What does the product do? Perceived quality – What is the reputation of the company or product? Conformance to standards – Is the product made exactly as the designer intended?

5. 8/25/2015 ENGM 720: Statistical Process Control 5 Quality is a multifaceted entity. Traditional (OLD) definition of Quality: Fitness of use (i.e., products must meet requirements of those who use them.)

6. 8/25/2015 ENGM 720: Statistical Process Control 6 Two Aspects of “Fitness for use” Quality of design – all products intentionally made in various grades of quality. (e.g., Autos differ with respect to size, options, speed, etc.) Quality of conformance – how well the product conforms to specifications. (e.g., If diameter of a drilled hole is within specifications then it has good quality.)

7. 8/25/2015 ENGM 720: Statistical Process Control 7 What's Wrong with "Fitness for Use" Definition of Quality? Unfortunately, quality as “Fitness for Use” has become associated with the "conformance to specifications" regardless of whether or not the product is fit for use by customer. Misconception: Quality can be dealt with solely in manufacturing - that is, by "gold plating" the product

8. 8/25/2015 ENGM 720: Statistical Process Control 8 Modern Definition of Quality: Quality is inversely proportional to variability If variability of product decreases  quality of product increases Quality Improvement – Reduction of variability in processes and products Quality Engineering – Set of operational, managerial, and engineering activities that a company uses to ensure that quality characteristics of a product are at nominal levels

9. 8/25/2015 ENGM 720: Statistical Process Control 9 Statistical Methods for Quality Improvement Relative Savings from a $1 investment in: Acceptance Sampling ($1) On-Line Process Control ($10) Off-Line Process Improvement ($100)

10. 8/25/2015 ENGM 720: Statistical Process Control 10 Acceptance Sampling Reduces bad product sent to consumer Dodge & Romig 1930s Sample from lot to determine acceptance More effective than 100% inspection No feedback, prevention or improvement

11. 8/25/2015 ENGM 720: Statistical Process Control 11 On-Line Process Control Monitoring of manufacturing process with control charts Shewhart 1920s Sample & stop process if necessary No improvement, but maintains current process quality level

12. 8/25/2015 ENGM 720: Statistical Process Control 12 Off-Line Improvement Designed experiments Taguchi & Classical Statistics 1980s If it's not broke, improve it! Continuous improvement of product designs and manufacturing processes

13. 8/25/2015 ENGM 720: Statistical Process Control 13 $ Defect Rate Quality Cost Quality Myth: Higher Quality  Higher Cost Failure Cost Total Cost

14. 8/25/2015 ENGM 720: Statistical Process Control 14 Manufacturing Process $20 / part 75% Conform Very Often: Higher Quality  Lower Cost Textbook ex: Manufacture of Copier Part Re-work Process $4 / part (15 good parts) 25% Non-conforming: 100 parts (75 good parts) (25 parts) (40% Scrap, 60% Re-workable) (10 scrap parts)

15. 8/25/2015 ENGM 720: Statistical Process Control 15 New SQC procedure implemented NOW: manufacturing non-conformity = 5% SAVINGS: $22.89 – $20.53 = $2.36 / good part PRODUCTIVITY: 9% improvement Study finds excessive process variability responsible for high nonconformity rate

16. 8/25/2015 ENGM 720: Statistical Process Control 16 How Quality Engineering Makes a Company More Competitive Tactical less inspection less scrap and rework more capacity easier scheduling & shorter lead time less inventory less warranty cost Strategic more flexibility to make new products customer satisfaction easier to spot and solve problems employee involvement in continuous improvement

17. 8/25/2015 ENGM 720: Statistical Process Control 17 Taguchi (1980) and Robust Design New Goal: consistently good performance in a variety of operating conditions Minimize variation in processes and products Use Designed Experiments to achieve robustness

18. 8/25/2015 ENGM 720: Statistical Process Control 18 Taguchi's Example: Elasticity of Caramel Product X conforms to elasticity spec at 72 o Product Y performs well in a wide variety of operating conditions Elasticity Temp72 o Spec Prod Y Prod X

19. 8/25/2015 ENGM 720: Statistical Process Control 19 Total Quality Management – TQM Although statistical techniques are critical for quality improvement: the management system must direct quality improvement philosophy and ensure its implementation in all aspects of business TQM must be implemented within a management system that is scientifically quality driven

20. 8/25/2015 ENGM 720: Statistical Process Control 20 International Standards Organization ISO 9000 (1990s) An ISO 9000 certified company examined by a registered official has an effective management system, capable of consistent performance Examples: System in place to correctly identify customer needs Staff have correct versions of documentation Preferred suppliers selected; consistent communication system System to document and correct errors

21. 8/25/2015 ENGM 720: Statistical Process Control 21 Six Sigma - Motorola Six Sigma = 3.4 defects per million opportunities! Every employee must show bottom line results of quality project – finance, mail room, manufacturing, etc. identify problem; develop measurement; set goal; close gap Long term process – 5 years to fully implement

22. 8/25/2015 ENGM 720: Statistical Process Control 22 Malcolm Baldridge National Quality Award Established by congress in 1987, for excellence in organizations Applicant receives intense investigation NIST (National Institute of Standards and Technology) study shows Baldrige Award recipients outperformed the Standard & Poor’s 500 by nearly 2.5 to 1.

23. 8/25/2015 ENGM 720: Statistical Process Control 23 The Baldridge Award examines quality of organization in seven categories 1. Leadership 2. Information and Analysis 3. Strategic Planning 4. Human Resource Development and Management 5. Process Management 6. Business Results 7. Customer Focus and Satisfaction

24. 8/25/2015 ENGM 720: Statistical Process Control 24 Questions & Issues On-Campus Students Please turn in card info Distance students: E-mail instructor with card info, including proctor contact information Name E-mail Address Mailing Address