Agenda
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Review homework
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Chapter 3 - 11, 36(c)
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Case Study: “How We
Slashed Response Time”
Week 7
Week 8 assignment
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Lecture/discussion
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Chapter 4: Statistics
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Metrics
Measurement
Statistics
Quality Metrics
Homework
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Problems chapter 4
– 2, 3
Quality Metrics
Chapter Four
“We best manage what we can
measure”
Quality Metrics
Metric
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A metric is a verifiable measure stated in
either quantitative or qualitative terms.
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“95 percent inventory accuracy”
“as evaluated by our customers, we are
providing above-average service”
Quality Metrics
Metric
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A metric is a verifiable measure
that
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•
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captures performance in terms of how
something is being done relative to a
standard,
allows and encourages comparison,
supports business strategy.
Quality Metrics
Customer quality measures
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Customers typically relate quality to:
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Feature based measures; “have” or “have
not” - determined by design
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Performance measures - “range of values” conformance to design or ideal value
Quality Metrics
True versus substitute
performance measures
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Customers - use “true” performance measures.
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Producers - use “substitute” performance measures
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example: a true measure of a car door may be “easy to close”.
true performance measures typically vary by each individual
customer.
Unfortunately, producers cannot measure performance as each
individual customer does.
these measures are quantifiable (measurable units).
Substitute measure for a car door: door closing effort (footpounds).
Other example: light bulb
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true performance measure -- brightens the room
substitute performance measure – wattage or lumens
Quality Metrics
Educating Consumers
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Sometimes, producers educate consumers on
their substitute performance measures.
What are substitute performance measures for
the following customer desires:
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•

Good Gas Mileage
Powerful Computer
What is the effect of educating consumers on
performance measures?
Quality Metrics
What is a “metric”?

Another term for a substitute performance
measure is a metric.
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•
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Metric is a standard of measurement.
In quality management, we use metrics to translate
customer needs into producer performance
measures.
Internal quality metrics
•
•
•
scrap and rework
process capability (Cp or Cpk)
first time through quality (FTTQ)
Quality Metrics
Identifying effective metrics
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Effective metrics satisfy the following
conditions:
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performance is clearly defined in a measurable
entity (quantifiable).
a capable system exists to measure the entity
(e.g., a gage).
Effective metrics allow for actionable
responses if the performance is unacceptable.
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There is little value in a metric which identifies
nonperformance if nothing can or will be done to
remedy it.
Example: Is net sales a good metric to measure the
performance of a manufacturing department?
Quality Metrics
Use of quality metrics

Quality metric data may be used to:
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spot trends in performance.
compare alternatives.
predict performance.
However, organizations should consider the
costs and benefits of collecting information for
a particular quality metric.
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collecting data will not necessarily result in higher
performance levels.
higher quality companies often use fewer metrics
than their competitors.
Quality Metrics
Acceptable ranges
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In practice, identifying effective metrics is often
difficult.
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Main reason: non-performance of a metric does not always lead
to customer dissatisfaction.
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Consider the car door example again, if door closing
effort is the metric, will a customer be dissatisfied if
the actual effort is 50 foot-pounds versus 55 footpounds.
Producers typically identify ranges of acceptable
performance for a metric.
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(a) For services, ranges often referred to as break points.
(b) In manufacturing, these ranges are known as targets,
tolerances, or specifications.
Quality Metrics
Break points
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Break points are levels where improved performance
will likely change customer behavior.
Example: waiting in line
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Suppose the average customer will only wait for 5 minutes
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Wait longer than 5 minutes -- customer is
dissatisfied.
1-5 minutes -- customer is satisfied.
less than 1 minute -- customer is extremely satisfied
Should a company try to reduce average wait time
from 4 to 2 minutes.?
Quality Metrics
Targets, tolerances and
specifications
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Target (nominal) - desired value of a
characteristic.
A tolerance specifies an allowable deviation
from a target value where a characteristic is
still acceptable.
Lower specification
limit (LSL)
Upper specification
limit (USL)
TARGET
-1
+1
Quality Metrics