1. © 2007 Pearson Education 12- 1 Managing Quality Integrating the Supply Chain S. Thomas Foster Chapter 12 Statistically-Based Quality Improvement for Variables

2. © 2007 Pearson Education 12- 2 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Chapter 12  Statistical Fundamentals  Control Charts  Some Control Chart Concepts for Variables  Process Capability for Variables  A Closer Look at Quality  Other Statistical Techniques in Quality Management

3. © 2007 Pearson Education 12- 3 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Statistical Fundamentals Statistical Thinking  All work occurs in a system of interconnected processes  All process have variation (The amount … tends to be underestimated)  Understanding variation and reducing variation are important keys to success

4. © 2007 Pearson Education 12- 4 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Statistical Fundamentals Why do statistics sometimes fail in the workplace?  Lack of knowledge about the tools  General disdain for all things mathematical  Cultural barriers in a company  Statistical specialists have trouble communicating

5. © 2007 Pearson Education 12- 5 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Statistical Fundamentals Why do statistics sometimes fail in the workplace?  Statistics generally are poorly taught, emphasizing mathematical development rather than application  People have a poor understanding of the scientific method

6. © 2007 Pearson Education 12- 6 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Statistical Fundamentals Why do statistics sometimes fail in the workplace?  Organizations lack patience in collecting data. All decisions have to be made “yesterday”  Statistics are viewed as something to buttress an already-held opinion  People fear using statistics

7. © 2007 Pearson Education 12- 7 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Statistical Fundamentals Why do statistics sometimes fail in the workplace?  Most people don’t understand random variation  Statistical tools often are reactive and focus on effects rather than causes

8. © 2007 Pearson Education 12- 8 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Statistical Fundamentals Type I and Type II Errors  Type I error  Producers risk  Probability that a good product will be rejected  Type II error  Consumers risk  Probability that a nonconforming product will be available for sale

9. © 2007 Pearson Education 12- 9 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Statistical Fundamentals Understanding Process Variation  Random variation  Centered around the mean  Consistent amount of dispersion

10. © 2007 Pearson Education 12- 10 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Statistical Fundamentals Understanding Process Variation  Nonrandom variation  “Special Causes”  Results from some event  Dispersion and average of the process are changing  Process that is not repeatable

11. © 2007 Pearson Education 12- 11 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Statistical Fundamentals Understanding Process Variation  Process stability  Random Variation  Not nonrandom variation  Process Charts

12. © 2007 Pearson Education 12- 12 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Statistical Fundamentals Understanding Process Variation  Sampling Methods  Samples are cheaper  Take less time  Less intrusive  Destructive tests may destroy the sample

13. © 2007 Pearson Education 12- 13 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Statistical Fundamentals  Random Samples  Each piece has an equal chance of being selected for inspection  Systematic Samples  According to time or sequence  Rational subgroups  A group of data that is logically homogeneous  Computing variation between subgroups

14. © 2007 Pearson Education 12- 14 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Statistical Fundamentals  Planning for Inspection  What type of planning will be used  Who will perform the inspection  What critical attributes to be inspected are

15. © 2007 Pearson Education 12- 15 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Control Charts Variables and attributes control charts  You must understand this generic process for implementing process charts  You must know how to interpret process charts

16. © 2007 Pearson Education 12- 16 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Control Charts Variables and attributes control charts  You need to know when different process charts are used  You need to know how to computer limits for the different type of process chart

17. © 2007 Pearson Education 12- 17 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Control Charts A generalized procedure for developing process charts  Identify critical operations in the process  Identify critical product characteristics  Determine whether the critical product characteristic is a variable or an attribute

18. © 2007 Pearson Education 12- 18 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Control Charts A generalized procedure for developing process charts  Select the appropriate process control chart  Establish the control limits and use the chart to continually monitor and improve  Update the limits when changes have been made to the process

19. © 2007 Pearson Education 12- 19 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Control Charts Understanding control charts A control chart is an application of hypothesis testing where: The null hypothesis is that the process is stable

20. © 2007 Pearson Education 12- 20 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Some Control Chart Concepts for Variables  Choosing the correct variables control chart  Are the data variable?  Is it homogeneous in nature or not conducive to subgroup sampling?

21. © 2007 Pearson Education 12- 21 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Some Control Chart Concepts for Variables  When a process is out of control some corrective action is needed:  Identify the quality problem  Form the correct team to evaluate and solve the problem  Use structured brainstorming  Brainstorm to identify potential solutions

22. © 2007 Pearson Education 12- 22 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Some Control Chart Concepts for Variables  When a process is out of control some corrective action is needed:  Eliminate the cause  Restart the process  Document the problem, root cause and solutions  Communicate the results

23. © 2007 Pearson Education 12- 23 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Process Capability for Variables A highly capable process produces high volumes with few or no defects World-class levels of process capability are measured by parts per million (ppm) defect levels

24. © 2007 Pearson Education 12- 24 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Process Capability for Variables Six Sigma A design program which emphasized engineering parts so that they are highly capable

25. © 2007 Pearson Education 12- 25 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Process Capability for Variables Capability Studies Two purposes to determine whether a process is capable  To determine whether a process consistently results in products that meet specifications  To determine whether a is in need of monitoring

26. © 2007 Pearson Education 12- 26 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Process Capability for Variables The difference between capability and stability A process is capable if individual products consistently meet specification A process is stable only if common variation is present in the process

27. © 2007 Pearson Education 12- 27 Strategic Quality Planning Statistically-Based Quality Improvement for Variables Summary You need:  To know the generic process for developing charts  To be able to interpret charts  To be able to choose which chart to use  The formulas to derive the charts  To understand the purposes and assumptions underlying the charts