BatStateU
Quality Management Systems
A Module in IE 411
QUALITY
MANAGEMENT
SYSTEMS
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Quality Management Systems
TABLE OF CONTENTS
…………………………………………. 1
Title Page
Table of Contents
……………………………………. 3
Course Description and Intended Learning Objectives
……………………………………. 4 I.
Concept of Quality, History of Quality Movement, Philosophies …………………………..5
II. Quality Management Systems …………………………………………………………..…17
III. Current and Emerging Quality Management Systems, Programs and Initiatives …….…. 21
IV. Total Quality Management ………………………………………………………….…… 28
V. Lean Six Sigma ……………………………………………………………………….….. 33 VI.
Continuous Quality Improvement / PDCA ……………………………………………… 40
VII. Malcolm Baldrige National Quality Awards / Philippine Quality Awards ……………...46
VIII. General Problem-Solving Tools (e.g., Magnificent 7 Tools, etc.) …………………….. 51
IX. Tools for Measuring Quality (Process Charts, Process Capability Index) ……………….72
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Quality Management Systems
Acceptance Sampling
Course Description
Techniques
………………………………………………………..85
This course is one of the fundamental courses in Industrial Engineering. Its focus is on the
undestanding of the laws, principles and phenomena in the field of quality management. This aims to
provide participants with a basic understanding on the rationale of implementing a structured
management system within an organization. Its focus is on the principles and practices of quality
management systems (QMS). Tools and techniques utilized in QMS will also be covered.
Intended Learning Outcomes
At the end of the course, you are expected to achieve the following outcomes:
ILO 1 Identify concepts of quality management and improvement
ILO 2 Develop an understanding of the role of technology, managers, employees, and customers in
developing a quality-based workplace
ILO 3 Develop abilities to apply quality improvement tools and techniques
ILO 4 Develop abilities to apply quality improvement tools and techniques
ILO 5 Identify current trends and benchmark organizations related to Quality Management
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Quality Management Systems
Lesson 1: Concept of Quality, History of Quality Movement, Philosophies
Learning Objectives:
 Define quality both from the customer and producer perspective
 Understand the historical movement of Quality
 Know the different Quality Gurus and contribution
 Demonstrate importance of quality if manufacturing
 Differentiate types of quality, dimensions, and cost of quality
Definition
Quality is ….
Is that which makes a being or things such as it is distinguishing elements or characteristic.
The characteristics of anything regarded as determining its values, place, worth, rank, position, etc.
A moral trait or characteristic; and
A degree of excellence; relative goodness; or grade.
Customer: Quality is the ability of a product or service to consistently meet or exceed the expectations.
Purchaser: Quality is the ability to meet all the expectations obtained in goods or services.
International Organization for Standardization (ISO 8402):
Quality is the totality of features and characteristics of a product or service that bear on its ability to
satisfy stated or implied needs.
The strategic approach is proactive, focusing on preventing mistakes from occurring.
Some of the most common definitions of Quality
Conformance to specifications
How well a product or service meets the targets and tolerances as determined by its designers.
Fitness for use
A definition of quality that evaluates how well the product performs for its intended use.
Value for price paid
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Quality Management Systems
Quality defined in terms of product or service usefulness for the price paid.
Support services
Quality defined in terms of the support provided after the product or service is purchased.
History of Quality Movement The
Industrial Revolution
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Quality was determined who developed the process
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Statistical analysis was introduced as a method of measuring the quality
-
Workers were judged by how much they can produce, not on the quality The Japanese
Quality Revolution
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Workers focused on defect prevention rather than inspection
-
Quality becomes everyone’s responsibility
-
All levels were trained on quality initiatives
-
Statistical method-controlled quality, but did not determine it
-
Employees participated in quality circles and other feedback programs
-
Because of this, Japanese increased their market share over the next 20 years
Quality Gurus
W. Edwards Deming
14 Points
Plan-Do-Check-Act cycle
Training & data-based problem solving
Joseph M. Juran
The Quality Handbook editor
Management breakthrough
Quality trilogy
Armand V. Fiegenbaum
Total Quality Control
Quality costs
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Quality Management Systems
“Hidden plant”
Kaoru Ishikawa
Quality control circles
Cause-effect diagrams
Elemental statistical methods
Philip B. Crosby
Quality Is Free
Zero defects
Defined quality: meeting customer Requirements
Genichi Taguchi
Efficient experimental design
Robust design
Quality loss function
Importance of Quality
1. Customer satisfaction
2. Avoid rework
3. Avoid cost of losing customers
4. Increase efficiency
5. Increase productivity
6. Increase market share
7. Increase moral of workers/employees
Types of Quality
•
Quality of Design
•
Quality of Product
•
Quality of Process
•
Quality of Systems
•
Quality of Service
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Dimensions of Quality
1. Performance - Main characteristics of the product or service
2. Aesthetics - Appearance, fee, smell, or taste
3. Special features - Extra characteristics
4. Conformance - How well a product or service corresponds to design specifications, and to the
customer’s expectations
5. Reliability - Consistency of performance
6. Durability - The useful life of the product or service
7. Perceived Quality - Indirect evaluation of quality (e.g. reputation)
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8. Service after sale - Handling of complaints or checking of customer satisfaction
Cost of Quality
The reason quality has gained such prominence is that organizations have gained an understanding
of the high cost of poor quality.
Quality affects all aspects of the organization and has dramatic cost implications.
The most obvious consequence occurs when poor quality creates dissatisfied customers and
eventually leads to loss of business.
Two categories of cost of quality
The first category consists of costs necessary for achieving high quality, which is called quality
control cost. There are of two types: appraisal cost and prevention cost.
The second category consists of the cost consequences of poor quality, is called quality failure
cost. These include external failure cost and internal failure cost.
Quality Control Cost
-
Appraisal cost
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Prevention cost Quality Failure Cost
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External Failure Cost
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Internal Failure Cost
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Lesson 2: Quality Management Systems
Learning Objectives
 Define Quality Management Systems
 Understand the function and purpose of QMS
 Define elements and design of QMS
 Recognize the benefits of quality management system
 Demonstrate how to establish and Implement QMS
Definition
Organization is a chain of internal suppliers and customers, who are collectively responsible to
deliver finished products to end customer.
Quality Management
Management activities and functions involved in determination of quality policy and its
implementation through means such as quality planning, quality assurance and quality control)
Quality Management Systems
A system comprised of quality planning and quality improvement activities, the establishment of a
set of quality policies and objectives that will act as guidelines within an organization, and QA
and QC.
A planned and established by documenting procedures for the processes of organization to fulfill the
needs and expectations of internal and end customers.
ISO
Refers to the International Organization for Standardization. Comes from the Greek word “isos”
meaning “equal” – a standard for all. ISO establishes common worldwide standards.
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Function of the Management System Standards
These standards provide requirements or guidelines for organizations to develop and
systematically manage their policies, processes, and procedures to achieve specific objectives.
Usually, they adopt a plan–do–check–act (PDCA) approach to achieve the objectives.
QMS Purpose
•
Improving Process
•
Facilitating and Indentifying training opportunities
•
Engaging Staff
QMS Benefits
•
Improve our organization.
•
Bring consistency and definition to processes, which will result in fewer defects and more
efficient practices.
•
Meet a global requirement by the customers to fulfill their requirements and to be qualified
as a supplier.
•
Solve problems (Section 8 of the ISO 9001 standard).
•
Increase market share by freeing up financial resources.
•
Reduce waste, scrap, and rework.
•
Increase customer confidence in our products and services.
QMS Elements
•
The organization’s quality policy and quality objectives
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Quality manual
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Procedures, instructions, and records
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Data management
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Internal processes
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Customer satisfaction from product quality
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Improvement opportunities
• Quality analysis
Establishing and Implementing a QMS
The QMS design should be influenced by the organization’s varying objectives, needs, and products
and services provided.
This structure is based largely on the plan-do-check-act (PDCA) cycle and allows for continuous
improvement to both the product and the QMS.
The basic steps to implementing a quality management system are as follows:
1. Design
2. Build
3. Deploy
4. Control
5. Measure
6. Review
7. Improve
Design and Build
These portions serve to develop the structure of a QMS, its processes, and plans for implementation.
Deploy
Best served in a granular fashion by breaking each process down into subprocesses and educating
staff on documentation, education, training tools, and metrics
Control and Measure
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Largely accomplished through routine, systematic audits of the quality management system Review
and Improve
Detail how the results of an audit are handled.
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Lesson 3: Current and Emerging Quality Management Systems, Programs, and Initiatives
Learning Objectives:
 Define the different programs of QMS
 Define ISO and ISO 9000
 Learn the advantages of ISO
 Determine the eight qualtiy management priciples
Definition
ISO
Refers to the International Organization for Standardization.
ISO establishes common worldwide standards
Greek word “isos” meaning “equal” – a standard for all
An independent, non-governmental, international organization aims to develops standards to ensure
the
•
quality,
•
safety,
•
efficiency of products, services, and systems
It is a family of standards related to Quality Management Systems
Helps organization to ensure that they meet the needs of customers while meeting statutory and
regulatory requirements
Advantages of ISO
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Quality is maintained
•
ISO registration has significant bearing on market credibility
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•
•
Opportunity to compete with larger companies
More time spent on customer focus
•
Means that company is committed to quality
•
May facilitate trade and increased market opportunities
•
Can increase customer confidence and satisfaction
INTERNATIONAL STANDARDS ISO 9000
The emphasis on customer satisfaction and continuous quality improvement has necessitated a
system of standards and guidelines that support the quality philosophy.
To address this need, the International Organization for Standardization (ISO) developed a set of
standards, ISO 9000, 9001, and 9004
THE ISO 9000 FAMILY
•
ISO 9000—Quality Management Systems: Fundamentals and Vocabulary
•
ISO 9001—Quality Management System Requirements
•
ISO 9004—Managing for the Sustained Success of an Organization
What is the ISO 9001 Standard?
A document that describes all of the requirements needed in order to create and maintain a quality
management system as described in ISO 9000.
Both the ISO 9000 and 9001 standards are based on a number of quality management principles
including a strong customer focus, the motivation, and implication of top management, the
process approach and continual improvement.
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Quality Management Principles Underlying ISO 9000:2015
1. Customer focus
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Understand the needs of existing and future customers
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Align organizational objectives with customer needs and expectations
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Meet customer requirements
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Measure customer satisfaction
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Manage customer relationships
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Aim to exceed customer expectations
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Learn more about the customer experience and customer satisfaction
2. Leadership
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Establish a vision and direction for the organization
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Set challenging goals
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Model organizational values
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Establish trust
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Equip and empower employees
Recognize employee contributions
3. Engagement of people
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Ensure that people’s abilities are used and valued
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Make people accountable
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Enable participation in continual improvement
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Evaluate individual performance
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Enable learning and knowledge sharing
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Enable open discussion of problems and constraints
4. Process approach
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Manage activities as processes
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Measure the capability of activities
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Identify linkages between activities
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Prioritize improvement opportunities
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Deploy resources effectively
5. Systematic approach to management
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Identifying, understanding and managing interrelated processes
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Contributes to the organisation’s effectiveness and efficiency in achieving its objectives
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Focuses its efforts on the key processes
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Aligning complementary processes to get better efficiency. - his means that multiple
processes are managed together as a system which should lead to greater efficiency.
6. Continual Improvement
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Improve organizational performance and capabilities
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Align improvement activities
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Empower people to make improvements
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Measure improvement consistently
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Celebrate improvements
7. Factual approach to decision making
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Ensure the accessibility of accurate and reliable data
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Use appropriate methods to analyze data
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Make decisions based on analysis
Balance data analysis with practical experience
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Tools for decision making
8. Mutually beneficial supplier relations
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Identify and select suppliers to manage costs, optimize resources, and create value
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Establish relationships considering both the short and long term
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Share expertise, resources, information, and plans with partners
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Collaborate on improvement and development activities
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Recognize supplier successes
Why ISO 9000 or 9001?
One misconception is that ISO 9000 or 9001 is only for manufactures or large organizations.
As a principles-based standard, ISO 9001 can be applied to any organization regardless of what
type or size it may be.
The standard defines the requirements, but it does not dictate the method of application. The
latest version of the standard has been specifically designed to be more accessible to
organizations outside the manufacturing sector
ISO 9001 Benefits
 Clear understanding of your objectives and new business opportunities.
 Identifying and addressing the risks associated with your organization.
 Renewed emphasis on putting your customers first.
 Meeting the necessary statutory and regulatory requirements.
 Organizational and process alignment to increase productivity and efficiency.
What is an ISO 9000 Certification?
To become ISO 9000 certified, should really be focused on ISO 9001.
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ISO 9001 is the standard that sets out the criteria for a quality management system and is also the
only standard within ISO 9000 that an organization can certify to.
An organization must demonstrate the following in order to be ISO 9001 certified:
• The company follows the guidelines within the ISO 9001 standard.
•
The company meets its own requirements.
•
The company meets its customer requirements and statutory and regulatory requirements;
and
•
The company maintains documentation of its performance.
How to Become ISO 9001 Certified?
ISO 9001 certification process requires an organization to implement ISO 9001:2015 requirements.
Once implemented, an organization must successfully complete registrar’s audit to confirm that the
organization system meets those requirements.
ISO 9001 and ISO 9004 are a consistent pair.
They are designed for use together but may be used independently, with their structures being simila
Two fundamental themes
•
customer-related processes
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concept of continual improvement
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Lesson 4: Total Quality Management
Learning Objectives:
 Define Total Quality Management
 Enumerate Concept and Characteristics of TQM
 Discuss the Traditional approach vs TQM
 Identify the Elements of TQM
 Discuss the principles of TQM
Definition
Total – made up of whole
Quality –degree of excellence a product or service provides
Management –act, art or manner of planning, controlling, directing….
The Concept of TQM
•
Product quality product the first time
•
Focus on the customer
•
Have strategic approach to improvement
•
Improve continuously
•
Encourage mutual respect and teamwork
Total Quality Management is a philosophy that involves everyone in an organization in a continual
effort to improve quality and achieve customer satisfaction.
Various Definition of TQM
•
TQM is the integration of all functions and processes within an organization in order to
achieve continuous improvement of the quality goods and services.
•
The process to produce a perfect product by a series of measures require an organized effort
by the entire company to prevent or eliminate errors at every stage in production is called
total quality management.
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Quality Management Systems
According to ISO “TQM is a management approach for an organization, centered on quality,
based on the participation of all members and aiming at long-term success through customer
satisfaction and benefits to all members of the organization and to the society. Traditional
Approach and TQM
Quality Element
Traditional Approach
TQM
Definition
Product-based
Customer-based
Decision
Short-term
Long-term
Emphasis
Detection
Prevention
Errors
Operations
Systems
Responsibility
Quality control
Everyone
Problem solving
Managers
Teams
Manager’s role
Plan, assign, control, and enforce
Delegate, coach, facilitate and
mentor
The Key Elements of the TQM
Focus on the customer
Employee Involvement
Continuous Improvement
Continuous Improvement
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TOTAL QUALITY MANAGEMENT PRINCIPLES:
1. Customer Focus: The strategy of Total quality management is customer- oriented.
2. Process-Centered: If problems are being caused by your process, then any training or
changing the workforce will not help you enough to get through the desired success.
3. Strategic Approach: A well-planned strategy can lead an organization to its desired
position. Companies must focus upon planning the execution strategy and implementing
them.
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4. Communication: The communication strategy focus upon the internal and external
communication of an organization. The stakeholders, members, directors and even the
employees must have the same goal and that is the growth of the organization
5. Statistics and Study: Comparative analysis and evaluation help an organization to decrease
the number of flaws. If an organization performs well and don’t devote enough time in
evaluating the workflow, the company will get less competent in no time. The competitors
who are providing the same sort of products or services can get the extra benefit of the
organization not caring about the flaws in their process.
6. Employee involvement: Employees are an organization’s internal customers. Without the
involvement of the internal workforce, the growth of an organization is completely not
workable.
7. Integrated system: It is necessary to have a company quality system following principle
Process apparatus, for the understanding and handling of the quality of services or the
products of a company or an integrated organization system which may be modelled for
example ISO 9000.
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Lesson 5: Lean Six Sigma
Learning Objectives:
 Define Lean
 Discuss waste and value as the two important concepts of Lean
 Introduce Six Sigma concept
 Discuss Six Sigma and its structured problem-solving methodology.
 Explain the concept of lean six sigma
What is Lean?
It is a process that helps to reduce or eliminate processes that doesn’t add value to the product
Aims to reduce the wastes involved in the process.
Lean helps in:
 Reducing process cycle time
 Improving product or service delivery time
 Reducing or eliminating chance of defect occurrence
 Reducing inventory levels
 Optimizing resources available
What is VALUE?
“Value” is related to customer’s perception of product(s) or service(s), which he or she is willing to
pay for.
•
Value added activities - These activities add value to the process and are essential. They
improve processes for productivity and quality.
•
Non- value added (but necessary) activities -These activities do not add value to a customer.
They are necessary for continuity of a process.
•
Non- value added (and un-necessary) activities - These activities do not add any value to the
process or products. They form the wasteful steps.
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What is waste?
- “Muda” in Japanese term
-
Can be explained using “DOWNTIME”
Waste
Definition of waste
D
Defects
The efforts involved inspecting for and fixing errors, mistakes
through reworks.
O
Overproduction
Producing more products or services that the customer needs or
downstream process can use.
W
Waiting
Idle time created when material, information, people, or
equipment is not ready.
N
Non-utilized Talent
Not adequately leveraging peoples’ skills and creativity.
T
Transporation
Moving products, equipment, material, information, or people
from one place to another, without any value addition to final
product or service.
I
Invetory
Unnecessary/ Unwanted stocking or storage of information and/
or material (eg WIP, WIQ – work in the queue)
M
Motion
Unnecessary movement of people or machines that takes time
and uses energy. It may cause fatigue to workman due to
unwanted movement of a body.
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Quality Management Systems
EXtra Processing
Process steps that do not add value to the product or service,
including doing work beyond a customer’s specification.
What is Six Sigma?
Six Sigma is a data-driven problem-solving methodology
The focus is on process variations and emphasis is given to customer satisfaction.
Continous process improvement with low defects is the goal of this method.
The goal of Six Sigma:
The aim of Six Sigma is to make a process effective with - 99.99966 % defect free. This means a
six-sigma process produces in 3.4 defects per million opportunities or less as a result.
THE DMAIC PROCESS
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DEFINE
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Define the problem
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Improvement activity, opportunity for improvement, the project goals, and customer
•
(internal and external) requirements
Project charter
•
Voice of the customer
•
Value stream map
MEASURE
•
Measure process performance
•
Develop a data collection plan for the process. Collect data from many sources to determine
types of defects and metrics.Compare to customer survey results to determine shortfall.
•
Process map
•
Capability analysis
•
Pareto chart
ANALYZE
•
Analyze the process to determine root causes of variation and poor performance (defects).
•
Root Cause Analysis
•
Failure mode and effects analysis (FMEA)
•
Multi-vari chart
IMPROVE
•
Improve process performance by addressing and eliminating the root causes.
•
Design of experiments (DOE)
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Kaizen event
CONTROL
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Control the improved process and future process performance.
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Quality control plan
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Statistical process control (SPC)
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5S
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Mistake proofing (poka-yoke)
Six Sigma Phase
Description of Phase
Define
In this stage, project objectives are outlined.
A project charter is a blueprint document for a six-sigma
project. A typical charter contains business case, problem
statement, project scope, resources, timeliness, estimated
benefits
Measure
Process variables are measured at this stage. Process data is
collected. The baseline is obtained, and metrics are
compared with final performance metrics. Process
capability is obtained.
Analyse
Root cause analysis is done at this stage. Complex analysis
tools are utilized to identify the root causes of a defect.
Improve
Once final root causes are identified, solutions need to be
formed to improve the process. Steps to identify, test and
implement the solutions to eliminate root causes are part of
this stage
Control
A control system must be in place to monitor the
performance post improvement. And a response plan is
developed to handle solution failure.
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DMAIC Application
Imagine you want to clean up your garage so you can fit a new motorcycle inside. You could use
Lean methods to accomplish this goal.
DMAIC PHASE
Cleaning Your Garage
Define
Identify the scope of the cleaning project (cleaning the garage, not
whole house).
Measure
Pace off the square footage of the overall garage and of the open floor
space. Set a goal for required amount of open floor space.
Analyze
Understand the types and amounts of materials currently in place and
the available storage locations.
Improve
Use Lean tools (e.g. 5S) to execute cleaning and organizing, including
removing unessential materials. Install improved vertical storage
facilities to minimize floor space used.
Control
Label storage spots. Put “after” photos in place as ongoing targets
What is Lean Six Sigma?
“Lean Six Sigma is a fact-based, data-driven philosophy of improvement that values defect
prevention over defect detection.
It drives customer satisfaction and bottom-line results by reducing variation, waste, and cycle time,
while promoting the use of work standardization and flow, thereby creating a competitive
advantage.
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It applies anywhere variation and waste exist, and every employee should be involved.”
Method: Implement lean
tools such as
Uses DMAIC method
and quality tools
Kaizen events, Value
Stream Mapping, 5S,
TPM etc.
Why is Lean Six Sigma gaining the importance in today’s scenario?
The ultimate objective is to improve processes by reducing variation and eliminating waste. It’s a
continuous improvement process, where Lean methods and Six Sigma approaches, both take their
turn during PDCA. The extent of approaches may differ depending upon process complexities or
improvement sought.
The combination of these two methods helps to develop streamlined processes with high quality
& results. It improves bottom-line profits and helps meeting business goals
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Lesson 6: Continuous Quality Improvement
Learning Objectives:
 Define CQI
 Define and discuss PDCA Cycle as a continuous improvement tool
 Know the benefits of PDCA Cycle
What is CQI?
Continuous Quality Improvement is a process to ensure programs are: Systematically and
intentionally improving services.
CQI is a proactive approach
Helps organization to
 Reduce waste
 Increase Efficiency
 Increase Customer Satisfaction
Continuous Improvement
Kaizen means to change for good. Changing the process for the improvement of the product or
service,
Why do we even need CQI?
Reduce Risk: Identify, eliminate or minimize things that go wrong
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Improve care: Support care and services to go right
Re-produce quality: develop care and services to achieve consistently good care for every
consumer, everytime
PDCA (Plan-Do-Check-Act) Cycle
A continuous improvement tool with four logical sequence steps.
A framework for problem solving continuous improvement and change
Widely recognized as the basis of continually improving quality of process, products, and services.
Provides a simple and structured approach for solving quality –related problems
Also known as Deming Cycle/ wheel
Shewart Cycle/ control circle/cycle
Plan- Do- Study- Act (PDSA)
Background of PDCA
Walter shewart 1920’s : Shewart learning and improvement Cycle
W. Edwards Deming 1950’s
It’s a combination of the management thinking and statistical analysis
BENEFITS of PDCA
Encourages methodological way of problem solving and implementing solutions
Ensures that you plan, test and incorporate feedback before you start full-scale implementation.
Improves critical thinking skills of your team
Helps to reach towards a more integrated system
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Plan
Do
Another
problem or
improvement
Modify Parameters
Check
No
Goal
Achieved?
Yes
Act
Four Phases of PDCA
Plan a change aimed at improvement
Do – Carry out change
Check/Study the results
Act- Adopt, Adapt or Abandon
Plan
Analyze the current condition
Identify exactly what the problem is
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Map the process
Establish the objectives
Do
Implement the plan
Generate possible solution
Execute the process
Data collection
Check
Study the actual results
Compare the results against expected results
Act
Take action based on the study
Two possibilities:
If the changed did not work, go through the cycle again with a different plan
If you were successful then standardize, document, sustain the improved process and integrate into
organization’s system.
When to use PDCA?
When starting a new improvement project
When developing a new or improved design of process
Exploring a range of possibilities
When implementing changes
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A common example often used is when a design team is planning for a new product
development.
Tools used for PDCA
Phase
Tasks
Useful Tools
Plan
Identify the problem
Brainstorming, flowchart, pareto
chart, cause and effect analysis, whywhy diagrams etc.
Determine the root cause
Create the action plan
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Do
Implement the action plan
Control Charts, Sampling, data
collection methods, scatter diagram,
checksheets, gantt chart etc.
Check
Review and evaluate the results of
the changes made
Graphical analysis, pareto charts,
histogram, checksheet , control
charts etc.
Act
Reflect on what has been learned
Flowcharts, checksheets etc.
Recommend changes
Standardize successful changes
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Lesson 7: Malcolm Baldrige National Quality Award and Philippine Quality Awards
Learning Objectives:
 Define Malcolm Baldrige Award
 Discuss History of Malcolm Baldridge Award
 Explain reasons for establishing award and its purpose
 Describe the pillars of Malcolm Baldrige
 Define Philippine Quality Awards
 State objectives and benefits of PQA
Malcolm Baldrige National Quality Award
It was created to promote quality awareness, identify the requirements for quality excellence, and
share information about successful quality strategies and benefits.
An annual award given by the government of the United States to every organization in the US (both
profit and nonprofit), which is considered to achieve exceptional performance or excellent.
Founder of Malcolm Baldrige Award
•
Aims of Malcom Baldrige Award
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He is Secretary of Commerce Malcolm Baldrige
• A proponent of quality management
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Enhance competiveness and performance of U.S Organizations
Identify and recognize role model organizations
Establish criteria for evaluating improvement efforts
Disseminate and share best practices
Six eligibility categories
 Manufacturing
 Service
 Small business (manufacturing or service)
 Education (for profit & nonprofit)
 Health care (for profit & nonprofit)
 Nonprofit, including charities & government agencies
How award helps an organization
The criteria for winning the award are very demanding and simply trying to align a company to them
is highly beneficial.
It can be used as motivational toll for workers to rally behind a common goal,.
Simply by competing for the award an organization sees the importance of quality in their business.
The criteria they use is also known as the 7 Pillars of Malcolm Baldrige.
55% of evaluation is based on how the organization is run, 45% on the basis of performance
Every major part of organizational is accessed.
Continuous improvement and reavaluation is very important.
Pillars of Malcolm Baldrige
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How organization
develops objectives?
How is the performance
level compared to
competitors?
How workforce
capability were assessed
and utilized?
How leaders sustain and
guide the organization?
How firm listens to the voice of the customers and build
relationship with them?
How improvements were design?
Leadership
Strategic Planning
Customer and Market Focus
Performance Measurement
Human Resource Development and Management
Process Management
Business Result
How to select and analyze data
and how to review findings
Board of Examiners
Independent board research each competing organization, and follows the specific criteria previously mentioned.
Site visits consist of 4-6 examiners
Examiners are volunteers
Appointment of Board of Examiners is a very prestigious honour.
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The Philippine Quality Award (PQA) About
PQA?
It is patterned after Malcolm Baldrige National Quality Award
What is PQA?
 Promotes Performance Excellence through adoption of PQA Criteria.
 Offers an assessment tool to evaluate organizational processes and performance results; and
 Provides training for organizations and would –be assessors and best practice sharing
conferences
Objectives of the PQA
1. Standards on organizational performance
2. National system for assessing quality and productivity performance
3. To recognize organizations which have achieved the highest level of quality and business
excellence
Benefits of PQA
 Outside perspective of organizations strengths and opportunities for improvement
 Thorough evaluation and review by experts and panel of assessors
 Feedback Report to guide your organization’s quality and productivity improvement
 Increase employee involvement, customer satisfaction and retention
 Achieve performance results
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 Benchmark for exceptional management practices
Program Beneficiaries
Public Sector
 National Line Agencies
 Government owned and controlled corporations
 Local Government Units
 State Universities and Colleges
 Other Government Agencies
Private Sector
 Agriculture
 Manufacturing
 Pharmaceutical Medicines
 Consumer/ Industrial Goods
 Foods/processed foods
 Electronics
 Services
 Educational Institution
 Healthcare Institution
 Financial Institution
 Other industries
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Assessment process
Submission of
Application
Report Eligibility
Determination
Independent
Review
Initial
Consensus
Review
Site Visit
Review
Final Judges
Review
Recognition Levels
Lesson 8: General Problem-Solving Tools
Learning Objectives:
 Explain the different tools and techniques for Quality Improvement 
Perform each tools and techniques based on scenario.
Introduction
All organizations need to improve continuously. There is increasing pressure from customers,
competitors, regulators and employees to do things better, faster and at lower cost.
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What is a problem?
•
A problem is
•
“a deviation from normal expectations.”
•
“a gap between desired and actual situation”
THE PROBLEM-SOLVING PROCESS
A methodical and effective approach for analysing problems and generating workable solutions to
them.
When to use it
•
•
A problem exists
Needs improvement
Why use it?
•
Can identify quick fixes as well as permanent solutions to the ROOT CAUSES.
The Problem-Solving Process
1. Identify Possible Cause  Define the Problem
2. Investigate & Fix
3. Analyse Data & Identify Root Causes
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4. Identify Possible Solutions
5. Select & Implementation stages Test Solutions  Implementation stages if viable,
Review/re-start if not viable
It is often necessary to step back from your first
thoughts on what a problem is, so that you truly
understand what it is that needs to be solved.
Define the Problem
STEP 1: Identify Possible Causes
•
Aim: To generate a list of all the possible causes of a defined problem.
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STEP 2: Investigate and Fix
•
Aim: To identify which possible causes actually contribute to the problem and fix those
that can be acted upon immediately.
STEP 3: Analyse Data and Identify Root Causes
•
Aim: To identify the root causes of a problem.
STEP 4: Identify Possible Solutions
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Aim: To identify possible solutions which could be used to eliminate the identified root
cause(s).
Main tools to use: Brainstorming
STEP 5: Select and Test Solutions
•
Aim: To select an effective, practical and implementable solution that will remove the root
cause of a problem
Implementation Stages
Once a viable solution has been identified, you can move on to the Implementation Stages. This
involves the implementation of the solution generated at the previous stage together with the
establishment of indicators to monitor the effectiveness of the solution.
Education, Training and Communication
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•
Involve all those affected by the problem solution
•
Listen to feedback
•
Consider education and training needs
Implementation Planning
•
Identify planned activities and critical path
•
Identify measures and resource requirements
•
Involve and train those affected by the solution
Implementation and Follow Up
•
Implement your solution
•
Measure improvement
•
Follow up – make sure it sticks
•
Report on success
BRAINSTORMING
Brainstorming is a technique that encourages creative thinking and the generation of ideas.
When to use it
•
To generate a list of potential problems to solve
•
To identify possible causes of a problem
•
To identify possible solutions to a problem
•
To develop action plans
Rules for Brainstorming
•
Choose the right team and have a leader
•
Ensure everyone knows the rules
•
•
Define the problem/topic clearly
Allow time for individual thought before generating ideas as a group
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•
Ensure everyone participates
•
Generate as many ideas as possible
•
Ban discussion and evaluation during the idea generation stage
•
Record every idea, on a Flipchart
•
Allow incubation time before evaluating the ideas
•
Keep a relaxed atmosphere
Affinity Diagram
Allow individuals to Brainstorm onto Cards or Post-it Notes (one idea per card), stick all the ideas
on a wall, then arrange them into groups of similar ideas.
The Magnificent 7 Tools
1. Checksheets
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•
It is used to document data at a certain point over a period of time.
•
It is an easy data collection tool that can be applied in a variety of applications
Applications:
– To collect and analyze data at a fixed place, usually by the same person.
– To record the probability and pattern of events, defects or similar issues.
– To keep track of steps of an established procedure in a production process.
2. Histogram
•
Graphical representation of the distribution of numerical data
•
Values are assigned “bins or intervals” and frequency of each bin is plotted.
Applications:
To represent numerical data.
To see the shape of the distribution of data.
To see the change in process for different periods of time.
To provide an easy and efficient way of sharing data.
To check the frequency of occurrences between different ranges.
3. Cause and Effect Analysis/Fish- Bone Diagram
It is a cause analysis tool which is used to identify all possible causes leading to an event or a
problem. It is also useful for sorting all ideas into categories. Alternate Names to this approach
are known as Ishikawa diagram and cause-and-effect diagrams.
•
It usually classifies causes into 6 categories:
•
Man
•
Materials
•
Machine
•
Methods
•
Measurements
•
Environment/Mother nature
Applications:
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•
Detecting the possible causes of a problem.
•
For collective brainstorming about resolving the problem with the team.
•
For designing a new product.
•
Troubleshooting for a business challenge
4. Pareto Charts
It is fundamentally a bar chart. The chart was named after the Pareto principle (80/20
rule). As the principle suggests Pareto charts are used to observe the factors which carry
the highest weight
Applications:
When using the 80/20 rule to analyze the most important causes of a process or event(s).
When analyzing the frequency of recorded occurrences.
To distinguish the biggest causes in a large set of defects or problems.
5. Control Charts
A control chart is a statistical tool for monitoring the behaviour of the processes with
respect to time against the controls dictated by the process itself. The control charts were
introduced by Walter A. Shewhart, who was working for Bell Labs, in order to control
the quality of their transmission systems
Purpose: to monitor process output to see if it is random (in control) or not (out of control).
A time ordered plot representative sample statistic obtained from an ongoing process (e.g.
sample means).
Upper and lower control limits define the range of acceptable variation Applications:
Used to determine if a manufacturing or business process is in a state of statistical control
Used to detect/identify assignable causes.
One of the most commonly used methods of Statistical Process Control (SPC), which
monitors the stability of a process.
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Reading Control Charts
Control chart is out of statistical control if:
Control Charts
Types of control charts
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Control charts for attributes are used to monitor characteristics that have discrete values
and can be counted, e.g. defective, number of flaws in a shirt, number of broken eggs in a
box, etc.
•
Control charts for variables are used to monitor characteristics that can be measured,
e.g. length, weight, diameter, time, etc.
Are typically used used in pairs:
monitors process average monitors
the variation in the process
Variables Control Charts
•
Mean control charts
– Used to monitor the central tendency of a process.
– X-bar charts
•
Range control charts
– Used to monitor the process dispersion
– R charts
Guidelines in X Bar and R Chart:
•
The R chart is examined first before the X bar chart
•
If the R chart indicates the sample variability is in statistical control, the X bar chart is
examined to determine if the sample mean is also in statistical control.
•
If the sample variability is not in statistical control, then the entire process is judged to be not
in statistical control regardless of what the X bar chart indicates.
Steps in Constructing the X Bar Chart
1.Find the mean of each subgroup and the grand mean of all
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2. Find the UCL and LCL
3. Plot the LCL, UCL, center line, and subgroup means
4. Interpret the data and determine if the process is in control.
Mean Chart (X-bar chart)
•
The control limits of the mean chart is calculated as follows: (first approach)
•
Upper Control Limit (UCL)
=
•
Lower Control Limit (LCL)
=
Where:
n = sample size
z = standard normal deviation (1,2 and 3;
3 is recommended)
= process standard deviation
x
x
= standard deviation of the sampling distribution of the mean
= average of sample means
Mean Chart (X-bar chart)
Example
A quality inspector took five samples, each with four observations of the length of time for glue
to dry. The analyst computed the mean of each sample and then computed the grand mean. All
values are in minutes. Use this information to obtain three-sigma (i.e., z = 3) control limits for the
means of future time. It is known from previous experience that the standard deviation of the
process is 0.02 minute.
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Solution
n=4z=
3
= 0.02
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Mean Chart
A second approach to calculate the control limits:
This approach assumes that the range is in control
UCL=x+A2R LCL=x−A2R
Where:
A2 = A factor from table
R
= Average of sample ranges
This approach is recommended when the process standard deviation is not known
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Example
Twenty samples of n = 8 have been taken from a cleaning operations. The average sample range
for the 20 samples was 0.016 minute, and the average mean was 3 minutes. Determine three-sigma
control limits for this process. Solution
x
= 3 min. , R = 0.016, A2 = 0.37 for n = 8
UCL=x+A2R= 3+ 0.37(0.016) = 3.006
LCL=x−A2R= 3−0.37(0.016) = 2.994
Range Control Chart (R-chart)
•
The R-charts are used to monitor process dispersion; they are sensitive to changes in process
dispersion. Although the underlying sampling distribution of the range is not normal, the
concept for use of range charts are much the same as those for use of mean chart.
•
Control limits:
UCL=D4R
LCL=D3R
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R-chart
•
Example
Twenty-five samples of n = 10 observations have been taken from a milling process. The average
sample range was 0.01 centimeter. Determine upper and lower control limits for sample ranges.
•
Solution
R
= 0.01 cm,
n = 10
From table, for n = 10, D4 = 1.78 and D3 = 0.22
UCL = 1.78(0.01) = 0.0178 or 0.018 LCL
= 0.22(0.01) = 0.0022 or 0.002
Using Mean and Range Charts
•
•
Mean control charts and range control charts provide different perspectives on a process.
The mean charts are sensitive to shifts in process mean, whereas range charts are sensitive to
changes in process dispersion.
•
Because of this difference in perspective, both types of charts might be used to monitor the
same process.
Control Chart for Attributes
•
Control charts for attributes are used when the process characteristic is counted rather than
measured. Two types are available:
•
P-Chart - Control chart used to monitor the proportion of defectives in a process
•
C-Chart - Control chart used to monitor the number of defects per unit
•
Attributes generate data that are counted.
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Use of p-Charts
•
When observations can be placed into two categories.
– Good or bad
– Pass or fail
– Operate or don’t operate
•
When the data consists of multiple samples of several observations each
•
The theoretical basis for the P-chart is the binomial distribution, although for large sample
sizes, the normal distribution provides a good approximation to it.
•
A P-chart is constructed and used in much the same way as a mean chart.
•
The center line on a P-chart is the average fraction defective in the population, P.
•
The standard deviation of the sampling distribution when P is known is:
p(1−p)
p= n
The Control limits
If p is unknown, it can be estimated from the samples. That
estimates , replaces p in the preceding formulas, and
replaces
p.
p
=
Total number of defectives
Total number of observations
P-Chart Example
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An inspector counted the number of defective monthly billing statements of a company
telephone in each of 20 samples. Using the following information, construct a control chart
that will describe 99.74 percent of the chance variation in the process when the process is in
control. Each sample counted 100 statements.
Solution
p=
= 0.11
^
p(1−p)
p = = = 0.03 n 100
0.11(1− 0.11)
Control limits are
^
UCL = p+z
p
= 0.11+ 3(0.03) = 0.20
^
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LCL = p−z
p
= 0.11−3(0.03) = 0.02
Use of c-Charts
Use only when the number of occurrences per unit of measure can be counted; non-occurrences
cannot be counted.
– 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
When the goal is to control the number of occurrences (e.g., defects) per unit, a C-chart is
used.
•
Units might be automobiles, hotel rooms, typed papers, or rolls of carpet.
•
The underlying sampling distribution is the Poisson distribution.
•
Use of Poisson distribution assumes that defects occur over some continuous region and that
the probability of more than one defect at any particular point is negligible.
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The mean number of defects per unit is c and the standard deviation is:
c
UCL =c+z c
LCL =c−z c
If the value of c is unknown, as is generally the case, the sample estimate,
c
, is used in place of c.
where:
c
= Number of defects ÷ Number of samples
C- Chart Example
Rolls of coiled wire are monitored using c-chart. Eighteen rolls have been examined, and the
number of defects per roll has been recorded in the following table. Is the process in control? Plot
the values on a control chart using three standard deviation control limits.
Solution
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Average number of defects per coil = c = 45/18 =2.5
UCL=c+3 c = 2.5+3 2.5 = 7.24
LCL=c−3 c = 2.5−3 2.5 =−2.24 → 0
When the computed lower control limit is negative, the effective lower limit is zero. The calculation
sometimes produces a negative lower limit due to the use of normal distribution as an
approximation to the Poisson distribution.
6. Scatter Diagram
It is commonly recognized as the most powerful analysis tool. It is a plot to show the
relationship between “paired data”. The data is plotted in the form of points with the horizontal
and vertical axis determining the value.
Applications:
To find the correlation between two variables.
To find relationships between two seemingly unrelated variables objectively.
To find the root cause of a problem or an event.
After using an Ishikawa diagram to better analyze data and determining whether a particular
cause and effect are related.
When multiple points can be plotted for a dependent variable.
Correlation describes the type of relationship between two data sets.
The line of best fit is the line that comes closest to all the points on a scatter plot.
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Positive correlation; both data
No correlation
sets increase together.
Negative correlation;
as one data set increases, the other
decreases.
Data of Technicians' Education, No. of complaints Received for Scatter Diagram
7. Flow Charts
Process Flowcharts are used to show the steps in a process. These include the inputs and outputs
as well as the intermediate steps and decision points.
A process is a series of activities that converts an input to an output, by doing work. Process
Flowcharts create a common understanding of the steps involved in carrying out any process.
They can be used to highlight opportunities to streamline a process, making it both more
effective and more efficient.
Applications:
•
Organize a team for the purpose of examining the process
•
Construct a flow chart to represent each process step
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•
Discuss and analyze each step in detail
•
Ask the key question, “Why do we do it this way?”
•
Compare the actual process to an imagined “perfect” process
•
Is there unnecessary complexity?
•
Does duplication or redundancy exist?
•
Are there control points to prevent errors or rejects? Should there be?
•
Is this process being run the way it should?
•
Improvement ideas may come from substantially different processes
•
Lesson 9: Tools for Measuring Quality: Process Capability Index
Learning Objectives:
 To present some of the commonly used process capability measures
 Demonstrate procedures for their computation, interpret them, and discuss any associated
assumptions
SPECIFICATION LIMITS AND CONTROL LIMITS
Specifications limits and tolerance limits are often used interchangeably and are defined as the
acceptable bounds on quality characteristics.
Tolerance limits - generally preferred in evaluating manufacturing or service requirements
Specification Limits - more appropriate for categorizing materials, products, or services in terms of
their stated requirements. Specification limits are determined by the needs of the customer
Tolerance Limit
Can be two-sided (with upper and lower limits) or one-sided with either upper or lower limits
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A lower tolerance limit defines the lower conformance boundary for an individual unit of
manufacturing or service operation; an upper tolerance limit defines the upper conformance
boundary.
Specification Limit
Specification limits are determined by the needs of the customer
These limits are placed on a product characteristic by designers and engineers to ensure adequate
functioning of the product.
Specification limits and Control limits
PROCESS CAPABILITY ANALYSIS
•
The determination of process capability begins only after the process has been brought to a
state of statistical control.
•
A process is said to be in statistical control when the only sources of variation in the system
are common causes
Process Capability
•
Represents the performance of a process in a state of statistical control. It is determined by
the total variability that exists because of all common causes present in the system
•
A common measure of process capability is given by 6σ, which is also called the process
spread
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Process Capability Analysis
•
Estimates process capability
•
Involves estimating the process mean and standard deviation of the quality characteristic.
•
Additionally, the form of the relative frequency distribution of the characteristic of interest is
estimated. If specification limits are known, a process capability analysis will also estimate
the proportion of nonconforming product
Benefits of Process Capability Analysis
1. Uniformity of output
2. Maintained or improved quality
3. Product and process design facilitated
4. Assistance in vendor selection and control
5. Reduction in total cost
NATURAL TOLERANCE LIMITS
•
Natural tolerance limits, also known as process capability limits, are established or influenced
by the process itself.
•
They represent the inherent variation in the quality characteristic of the individual items
produced by a process in control.
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They are estimated based on the population of values or, more typically, from large
representative samples
μ represents the process mean and σ
represents the process standard
deviation, which is the standard
deviation of the individual items
Example
The diameter of a part has to fit an assembly. The specifications for the diameter are 5 ± 0.015 cm.
The samples taken from the process in control yield a sample mean X of 4.99 cm and a sample
standard deviation * of 0.004 cm. Find the natural tolerance limits of the process. Would you
consider adjusting the process center?
Solution: The upper and lower natural tolerance limits based on the sample estimates are
found using eq
•
UNTL = 4.99 + (3) (0.004) = 5.002
•
LNTL = 4.99 - (3)(0.004) = 4.978
•
Assuming a normal distribution of diameters, the process spread is (6)(0.004) = 0.024 cm,
which is the difference between the natural tolerance limits
•
For the current process, we would expect the diameters to lie between 5.002 and 4.978 cm
•
The difference between the specification limits is 0.03 cm.
If the process were left in its original state, some proportion of the parts would fall
below the lower specification limit of 4.985 cm.
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Thus, it would be desirable to adjust the process center to the target value of 5 cm. If this is
done, since the process spread is 0.024 cm and the difference between the specification limits
is 0.03 cm, virtually all parts would fall between the specification limits, and we would have
a capable process.
SPECIFICATIONS AND PROCESS CAPABILITY
•
Technically, there might not be any mathematical relationship between the process capability
limits (or the natural tolerance limits) and the specification limits. The former are determined
by the condition of the process and its inherent variability; the latter are influenced by the
needs of the customer.
SPECIFICATIONS AND PROCESS CAPABILITY
Case I: Process Spread Less Than Specification Spread
If the process spread is less than the difference between the specification limits, the process is quite
capable.
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Case II: Process Spread Equal to Specification Spread
If the process spread is the same as the difference between the specification limits, we have an
acceptable or adequate situation in which there is no room for error
If the distribution of the characteristic can be assumed to be normal and the process is in control,
virtually all (99.74%) of the items produced will be within specifications.
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Case III: Process Spread Greater Than Specification Spread
An undesirable situation exists when the process spread is greater than the difference between the
specification limits.
The inherent variability in the process exceeds the specification spread even though the process is in
control.
PROCESS CAPABILITY INDICES
•
A process should first be analyzed to verify that it is in control before its capability is
estimated.
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In this section we assume that the process output (i.e., the distribution of the quality
characteristic under consideration) is normal.
•
The process capability index is an easily understood aggregate measure of the goodness of
the process performance.
•
The ability to meet specifications is the criterion used for measuring the attractiveness of the
process.
•
The capability indices we describe here are nondimensional, which makes them even more
versatile and appealing because they do not depend on the specific process parameter units
(Kane 1986).
•
The indices incorporate the location and/or the variation in the process.
Process Capability Cp
•
A common measure for describing the potential of a process to meet specifications is the Cp
•
It relates the process spread (the difference between the natural tolerance limits) to
specification spread, assuming two-sided specification limits. It is given by
Cp
•
It is desirable to have Cp ≥ 1
•
Cp = 1, the process spread equals the specification spread, and the process is said to be barely
capable.
•
If the process is centered, only 0.26% of the parts will fall outside the specification limits.
(demonstrated in case II)
•
If the process is not centered, it is possible that even for a process with Cp > 1, some
proportion of the product will be nonconforming.
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However, when Cp > 1, there is some flexibility; that is, the process can go out of control yet
still produce conforming items (case 1)
Cp Index
•
If Cp < 1, it implies that the inherent variability in the process, as measured by the process
spread 6σ, is greater than the specification spread.
•
For this situation, a process can be in control and still not meet specifications, as described in
case III
•
Other capability indices, such as CPU, CPL, Cpk, Cpm, and Cpmk, measure process
performance.
Upper and Lower Capability Indices
•
Upper capability index (CPU, or Cp upper)
It is desirable to have CPU ≥ 1. Note that the denominator is half the process spread.
•
If only lower specification limit is given, the lower capability index (CPL, or Cp lower) is
given by
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Companies desiring a goal of a "six sigma process" are aiming for a Cp-value of 2
Example
In a GE insurance claims process, x = 210.0 minutes, and s = .516 minutes. The design specification
to meet customer expectations is 210 ±3 minutes. So the Upper Specification is 213 minutes and
the lower specification is 207 minutes. The OM manager wants to compute the process capability
ratio.
Because a ratio of 1.00 means that 99.74% of a process’s outputs are within specifications, this ratio
suggests a very capable process.
Cpk Index
•
The location of the process mean is another parameter that affects process capability.
Although the Cp index does not incorporate the process location, other indices do.
•
One index that accounts for this location, the Cpk index, is used when the process mean is
not at the target value, which is assumed to be halfway between the specification limits. The
Cpk index is given by
•
Whereas the Cp index represents the process potential, the Cpk-value represents the actual
capability of the process with the existing parameter values; it measures process performance.
•
It measures the difference between the desired and actual dimensions of goods or services
produced.
•
When the Cpk index for both the upper and lower specification limits equals 1.0, the process
variation is centered and the process is capable of producing within {3 standard deviations
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A C pk of 2.0 means the process is capable of producing fewer than 3.4 defects per million.
Example:
You are the process improvement manager and have developed a new machine to cut insoles for
the company’s top-of-the-line running shoes. You are excited because the company’s goal is no
more than 3.4 defects per million, and this machine may be the innovation you need. The insoles
cannot be more than {.001 of an inch from the required thickness of .250 ″ . You want to know if
you should replace the existing machine, which has a Cpk of 1.0.
Mean of the new process X = .250 inches
Standard deviation of the new process = s = .0005 inches
You decide to determine the Cpk
Upper specification limit = .251 inches
Lower specification limit = .249 inches
Because the new machine has a Cpk of
only 0.67, the new machine should not
replace the existing machine.
Meanings of Cpk Measures
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Process Performance: Pp
-
For process performance
-
Process is too new (at development stage)
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Sample size is larger from process
-
Use sample sigma for calculation Pp = (USL – LSL) / 6* s where s the standard
deviation, or the ‘fatness’ or dispersion of the bell curve.
Process Performance Index Ppk
Ppk is another performance index that measures how close the current process mean’s proximity is
to the specification limits. In other words, does this process deliver acceptable results?
Process Performance Index basically tries to verify if the sample that you have generated from the
process is capable to meet Customer CTQs (requirements).
Ppk = {(µ −𝑳𝑺𝑳)/ "σ" , (𝑼𝑺𝑳 −µ)/ "σ" }
Ppk = min{𝑷𝒑𝒌𝒍, 𝑷𝒑𝒌𝒖}
Cp, Cpk, Pp, Ppk Value Ranges
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When to Use Pp, Ppk, Cp, and Cpk
“Cpk is for short term, Ppk is for long term.”
Cp and Cpk are for computing the index with respect to the subgrouping of your data (different shifts,
machines, operators, etc.), while Pp and Ppk are for the whole process (no subgrouping).
Pp and Ppk
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Use an estimate for sigma that takes into account all or total process variation including special
causes (should they exist) and this estimate of sigma is the sample standard deviation, s, applies
to most all situations.
Example:
Food kept at a restaurant should be between 38°C and 49°C . The process used to keep the food
at the same temperature has a process standard deviation of 2°C. What is the process
performance of the process?
Pp = (USL – LSL) / 6* s = (49 - 38) / (6 * 2) = 0.917
PpkL = (mean-LSL/3*std.Dev) = (43.5 - 38) / (3 * 2) = 0.917
PpkU = (USL-mean/ 3*std.Dev) = 49 - 43.5) / (3 * 2)= 0.917
Ppk = min (0.917, 0.917)
= 0.917
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Lesson 10: Acceptance Sampling Techniques
Learning Objectives:
 Define acceptance sampling
 Discus Operating Characteristics Curve
 Learn how to develop OCC
Acceptance Sampling
The third branch of SQC refers to the process of randomly inspecting a certain number of items from
a lot or batch in order to decide whether to accept or reject the entire batch
Acceptance sampling is performed either before or after the process rather than during
– Sampling before typically is done to supplier material
– Sampling after involves sampling finished items before shipment or finished components prior to
assembly
A method of measuring random samples of lots or batches of products against predetermined
standards.
Used where inspection is expensive, volume is high, or inspection is destructive.
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Operating Characteristic Curve
A graph that describes how well an acceptance plan discriminates between good and bad lots.
A curve pertains to a specific plan—that is, to a combination of n (sample size) and c (acceptance
level).
It is intended to show the probability that the plan will accept lots of various quality levels.
With acceptance sampling, two parties are usually involved: the producer of the product and the
consumer of the product.
Producer usually has the responsibility of replacing all defects in the rejected lot or of paying for
a new lot to be shipped to the customer.
Producer’s risk -- The mistake of having a producer’s good lot rejected through sampling.
Consumer’s risk -- The mistake of a customer’s acceptance of a bad lot overlooked through
sampling.
Acceptable quality level (AQL) The quality level of a lot considered good.
Lot tolerance percentage defective (LTPD) The quality level of a lot considered bad.
To derive a sampling plan, producer and consumer must define not only “good lots” and “bad lots”
through the AQL and LTPD, but they must also specify risk levels
Producer’s risk ( ) is the probability that a “good” lot will be rejected. This is the risk that a random
sample might result in a much higher proportion of defects than the population of all items. A lot
with an acceptable quality level of AQL still has an a chance of being rejected. Sampling plans are
often designed to have the producer’s risk set at = .05, or 5%.
Consumer’s risk ( β ) is the probability that a “bad” lot will be accepted. This is the risk that a
random sample may result in a lower proportion of defects than the overall population of items. A
common value for consumer’s risk in sampling plans is β = .10, or 10%
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An Operating Characteristic (OC) Curve Showing Producer’s and Consumer’s Risks
A good lot for this particular acceptance plan has less than or equal to 2% defectives. A bad lot has
7% or more defectives.
Operating Characteristic Curve
For example, you sample 52 pens from a shipment of 5000. If the actual % defective is 1.5%, you
have a 0.957 probability of accepting this lot based on the sample and a 0.043 probability of
rejecting it. If the actual % defective is 10%, you have a 0.097 probability of accepting this lot
and a 0.903 probability of rejecting it.
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Use an OC curve to choose an appropriate sampling plan.
•
Producer’s risk (β) is the chance a lot containing an acceptable quality level will be rejected;
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•
Type I error Statistically, the probability of rejecting a good lot
•
Consumer’s Risk (α) is the chance of accepting a lot that contains a greater number of defects
than the LTPD limit
•
Type II error Statistically, the probability of accepting a bad lot.
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Developing OC Curves
• OC curves graphically depict the discrimina ting power of a sampling plan
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Cumulative binomial tables like partial table below are used to obtain probabilities of
accepting a lot given varying levels of lot defectives
•
Top of the table shows value of p (proportion of defective items in lot), Left hand column
shows values of n (sample size) and x represents the cumulative number of defects found.
Example: Constructing an OC Curve
Average Outgoing Quality
In most sampling plans, when a lot is rejected, the entire lot is inspected, and all defective items
replaced. Use of this replacement technique improves the average outgoing quality in terms of
percent defective. In fact, given (1) any sampling plan that replaces all defective items encountered
and (2) the true incoming percent defective for the lot, it is possible to determine the average
outgoing quality (AOQ) in percentage defective. The equation for AOQ is:
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AOQ = Pac (p)
The maximum value of AOQ corresponds to the highest average percentage defective or the lowest
average quality for the sampling plan. It is called the average outgoing quality limit (AOQL).
Implications for Managers
•
How much and how often to inspect?
– Consider product cost and product volume
– Consider process stability
– Consider lot size
• Where to inspect?
– Inbound materials
– Finished products – Prior to costly processing •
Which tools to use?
– Control charts are best used for in-process production
– Acceptance sampling is best used for inbound/outbound
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The Application of Statistical Process Control Techniques Contributes to the Identification and
Systematic Reduction of Process Variability
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