1. 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

2. 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

3. 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

4. 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

5. 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

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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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 9001 12 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

13. 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

14. Importance of Metrics  “ When you can measure what you are speaking about, and express it in numbers, you know something about it” - Lord Kelvin (1824-1907)  “Count what is countable, measure what is measurable, and what is not measurable, make measurable” - Galileo Galilei (1564- 1642)  “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

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

16. Pareto Chart The 80-20 Rule: Vital Few, Trivial Many 16 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

17. 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

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

19. 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

20. Run Chart 70 75 80 85 90 95 Time Can Pressure 20 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

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

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

23. 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

24. 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 = 82.5 + (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

25. Range (R) Chart  Average Range R = 10.1 psi  Standard Deviation of Range = 3.5 psi  Control Limits: 10.1 + (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

26. 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

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

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

29. 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) = 0.699  Shifting  to 80 yields P(Meet Specs) = 0.766  Reducing  to 2.5 yields P(Meet Specs) = 0.9544 LS  US LS  US 29 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

30. Normal distribution => 99.73% of output falls in (  + 3  ) C pk = Min[(US -  ) / 3 , (  - LS) / 3  ] Ex. Can Pressure: C pk = Min[0.1894, 0.5952] = 0.1984 With centered process: (US -  = (  - LS) C p = (US - LS)/6  ]= Voice of the Customer Voice of the Process =0.3968 C p =0.8611.11.31.471.632.0 Defects =10K3K1K100101ppm2 ppb Process Capability Ratio LS  US 30 Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

31. 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

32. 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

33. 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

34. 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

35. 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

36. 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

37. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall