Chapter 9
Managing Supplier Quality in
the Supply Chain
S. Thomas Foster, Jr.
Boise State University
Slides Prepared by
Bruce R. Barringer
University of Central Florida
©2001 Prentice-Hall
Chapter Overview
• The Value Chain
• Supplier Partnering
• Applying the Contingency Perspective to
Supplier Partnering
• A Supplier Development Program: QS 9000
• Acceptance Sampling and Statistical Sampling
Techniques
© 2001 Prentice-Hall
Transparency 9-2
Introduction
• HP is known for its commitment to its customers
and for understanding that quality performance
is closely related to supply chain activities.
• Remember that the performance of your
suppliers directly affects your reliability and your
ability to satisfy the customer.
• As a result, the supplier is key in satisfying the
customer.
© 2001 Prentice-Hall
Transparency 9-3
The Value Chain
Slide 1 of 4
• The Value Chain
– The value chain is a tool that disaggregates a firm
into its core activities to help reduce costs and
identify sources of competitiveness.
– It is part of the value system that consists of a
network of value chains.
– The value chain and core activities that are
performed by any company include inbound
logistics, operations, outbound logistics, marketing
and sales and service.
– Figure 9.1 shows Porter’s value chain.
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Transparency 9-4
Porter’s Value Chain
Slide 2 of 4 ( Figure 9.1)
Firm infrastructure
Human resource management
Technology development
Procurement
Support
Activities
(Hidden
Factory)
Inbound
logistics
Operations Outbound Marketing
logistics and sales
Service
Core Activities
© 2001 Prentice-Hall
Transparency 9-5
Porter’s Value Chain
• In Figure 9.1, notice that this is a chain for a single firm;
however, the firm’s suppliers have value chains also.
• The core activities shown in the figure are termed value
chain activities because they are the tasks that add value
for the customer.
• Non-value chain activities typically have costs but no
effect on the customer and are referred to as the “hidden
factory.”
• The hidden factory contains all of the bureaucratic
processes that are not part of the core activities in Figure
9.1.
© 2001 Prentice-Hall
Transparency 9-6
The Value Chain
Slide 3 of 4
• The Chain of Customers
– From a quality perspective, an interesting
variation of the value chain is the concept of the “
chain of customers.”
– Looking at the activities along the value chain
sequentially, we see that the links in the value
chain are really people performing different
functions.
– The chain of customers is revealed when you
view the next step in the chain after you as your
own customer.
© 2001 Prentice-Hall
Transparency 9-7
The Value Chain
Slide 4 of 4
• The Chain of Customers (continued)
– This means that if you work at workstation 4 in a
process at the core of the value chain, you will make
sure that the work you do is absolutely impeccable
before you release it to your “customer” in
workstation 5.
– The notion is that if each of us along a chain works to
satisfy our own customer, the final customer will be
very satisfied, and our products and services will be
free of defects and mistakes.
© 2001 Prentice-Hall
Transparency 9-8
The Value Chain
• Managing the supply chain
-- The concept of supply chain management extends
the economic concept of the value chain.
-- Figure 9.2 shows a realistic rendering of a supply
chain that includes several suppliers, plants,
distribution centers, and customer groups.
-- The value chain focuses on activities such as
inbound and outbound logistics.
-- One of the most significant aspects of the value
chain is the linkage between a series of suppliers and
consumers.
© 2001 Prentice-Hall
Transparency 9-9
The Value Chain
• Figure 9.2 A Supply Chain
© 2001 Prentice-Hall
Transparency 9-10
Supplier Partnering
Slide 1 of 7
• Supplier Partnering Concept
– There has a trend toward developing closer working
relationships with fewer suppliers.
– Given this new approach to suppliers, a big part of
quality improvement requires developing and
assisting suppliers so that they can provide needed
products with low levels of defects, in a reliable
manner, while conforming to requirements.
– Several approaches to improving suppliers result in
what is called supplier partnering.
© 2001 Prentice-Hall
Transparency 9-11
Supplier Partnering
• Supplier Partnering Concept
– Inspired by JIT purchasing approaches
learned from Japanese industry, supplierpartner relationships have emerged that treat
suppliers as de facto subsidiaries of the
customer organization.
– The relationship begins to resemble a
parent/subsidiary in stead of separate firms.
– As is shown in Table 9.1, a variety of systems
are used to help develop suppliers.
© 2001 Prentice-Hall
Transparency 9-12
Supplier Partnering
Slide 2 of 7
Table 9.1 Supplier Development Approaches
1. Sole sourcing
2. Dual sourcing
3. Supplier evaluation 4. Souring filters (ISO 9000,
MBNQA)
5. Supplier certification or qualification programs
6. Supplier development programs
7. Supplier audits
© 2001 Prentice-Hall
8. Partnering
Transparency 9-13
Supplier Partnering
Slide 4 of 7
• Supplier Partnering Approaches
– Sole sourcing
• Refers to narrowing down the list of
approved supplier for a single component to
just one supplier.
– Dual Sourcing
• Companies that are uncomfortable with
using a single supplier may use dual sourcing
where the number of approved suppliers is
reduced to just a few.
© 2001 Prentice-Hall
Transparency 9-14
Supplier Partnering
Slide 5 of 7
• Supplier Evaluation
– Is a tool used by many firms to differentiate
and discriminate between suppliers.
– Supplier evaluations are often recorded on
report cards in which potential supplier are
rated based on criteria such as quality,
technical capability, or ability to meet schedule
demands.
© 2001 Prentice-Hall
Transparency 9-15
Supplier Partnering
Slide 6 of 7
• Sole-Source Filters
– That are used in many companies rely on
external validation of quality programs.
– Two of the most common filters are the
Baldrige criteria and ISO 9000. The ISO is
commonly used in the international community
© 2001 Prentice-Hall
Transparency 9-16
Supplier Partnering
Slide 7 of 7
• Supplier Certification
– Many companies perform lengthy inspections
of their suppliers. These programs are often
called supplier certification or qualification
programs if the focus is entirely on evaluation.
• Supplier Development Program
– If the focus is on helping the supplier improve,
then the programs are called supplier
development programs.
© 2001 Prentice-Hall
Transparency 9-17
Supplier Partnering
• Supplier Audit
-- This is similar to supplier certification
except that a team of auditors visits the supplier
and then provides results of the audit to the
customer.
-- The audits are performed to ensure that
product quality and procedural objectives are
being met.
© 2001 Prentice-Hall
Transparency 9-18
Supplier Partnering
• We should mention that there are drawbacks to
sole sourcing.
• When there are few suppliers, there is more
exposure to interruption of supply.
• If labor relations are not solid, sole sourcing can
have the effect of shifting negotiating power to
unions in supplier plants.
• Other problems include possible interruptions
because of transportation problems, quality
problems, or disagreements concerning pricing.
© 2001 Prentice-Hall
Transparency 9-19
Supplier Partnering
1. In the 1980s, a defective rate of 5% for a
supplier was acceptable.
2. In this new century, parts-per-million levels of
quality are expected from suppliers.
3. In addition, many companies such as Mercedes
are moving to sole source suppliers. ( see Quality
Highlight 9.1)
© 2001 Prentice-Hall
Transparency 9-20
Supplier Partnering
4. Other change have occurred as well.
5. The strategy of purchasing group are different
now.
6. The way to develop a supplier is to have
adequate communications, linear production
schedules, and time to make necessary changes.
© 2001 Prentice-Hall
Transparency 9-21
Supplier Partnering
7. Supplier contacts are one way to ensure
adequate communication.
8. Assigning one person or team to each supplier
can reduce the potential for miscommunication.
9. Another way to communication is through
supplier programs where the product or service
producer ensures suppliers access to information.
10. Another issue of communication between
suppliers and customers is that production
schedules must match.
© 2001 Prentice-Hall
Transparency 9-22
Supplier Partnering
• Electronic Data Interchange
– Is a system that aids customer and supplier
communication by linking together supplier
and customer information systems.
– Customer now are helping suppliers to isolate
bottlenecks in operations, balance production
systems, and reduce setup times in an effort to
reduce lead times.
© 2001 Prentice-Hall
Transparency 9-23
Supplier Partnering
• Sole sourcing example
– Sole sourcing has changed the landscape of
purchasing.
– Suppliers were chosen for their current quality
practices and their willingness to work with
Xerox to implement a quality improvement
program.
– The Dell computer Company’s goal was to
work with suppliers to figure out how to
minimize the supplier chain and hold the least
amount of inventory.
© 2001 Prentice-Hall
Transparency 9-24
Supplier Partnering
• Sole sourcing example
– If suppliers do not understand your business, you end
up creating buffers that translate into inventory.
– Lockheed0Martin was a defense contractor that
worked closely with its suppliers.
– Lockheed-Martin developed criteria that each
supplier had to meet. Quality was a top requirement.
Each supplier was required to use statistical process
control, have a 0% rejection rate at the point of
inspection for six months, and achieve zero nonconformance. A supplier had to maintain a 98%
concurrency to contract delivery schedules.
© 2001 Prentice-Hall
Transparency 9-25
Applying the Contingency perspective to
Supplier Partnering
• Different firms take different approaches to supplier
development.
• One variable that affect what customers want from
their suppliers is the customer’s position in the
supplier chain.
• A study of the auto industry supply chain found that
the auto manufacturers, direct suppliers, and indirect
suppliers had somewhat different expectations from
their suppliers.
• Table 9.2 shows these priorities and their ranking.
© 2001 Prentice-Hall
Transparency 9-26
Applying the Contingency perspective to
Supplier Partnering
• Table 9.2 Supply Chain Priorities
© 2001 Prentice-Hall
Transparency 9-27
HISTORY OF QS-9000
• Chrysler, Ford and General Motors Harmonize
Their Supplier Quality System Standards
• Late in 1992, Purchasing and Quality executives
of the Big Three automakers met in Detroit and
agreed to help themselves and their suppliers by
replacing their individual quality system
standards with a single set of Quality System
Requirements, later named QS-9000.
© 2001 Prentice-Hall
Transparency 9-28
HISTORY OF QS-9000
• After two years of development involving the Big
Three, and their suppliers and representatives of
third-party certification organizations, the
automotive industry's needs and expectations of
its parts suppliers were developed.
© 2001 Prentice-Hall
Transparency 9-29
QS-9000: Third-Party
Registration
• A key point was that compliance to the new
contractually-mandated quality system
requirements could be confirmed by
independent third parties -- specially-qualified
ISO 9000 registrars capable of applying an
internationally recognized, automotivefocused registration system.
© 2001 Prentice-Hall
Transparency 9-30
QS 9000
• QS 9000 is an automotive QMS standard, based
on ISO 9000:1994, that contains additional
requirements from Chrysler, Ford, General
Motors, truck manufacturers and other
subscribing companies for internal and external
suppliers of production and service parts and
materials.
© 2001 Prentice-Hall
Transparency 9-31
What Are the Components of QS-9000?
• QS-9000 is composed of two sections: ISO 9001based requirements and customer-specific
requirements.
• ISO 9000-based requirements are founded on
Section 4 of the 1994 version of ISO 9001. The 20
elements of ISO 9001 are included in QS-9000,
together with supplemental requirements.
Customer-specific requirements are additional
standards that Chrysler, Ford, General Motors
and truck manufacturers have imposed.
© 2001 Prentice-Hall
Transparency 9-32
What Are the Components of QS9000?
• In addition, a QS-9000 supplements have been
published for producers of semiconductor
devices, and for tooling and equipment
suppliers.
© 2001 Prentice-Hall
Transparency 9-33
What Are the Components of QS9000?
-- There are also six customer reference manuals that
provide additional guidance for various functions. They
are:
1. Production Part Approval Process (PPAP)
2. Advanced Product Quality Planning and Control Plan
(APQP)
3. Failure Mode and Effects Analysis (FMEA)
4. Measurement Systems Analysis (MSA)
5. Fundamental Statistical Process Control (SPC)
6. Quality System Assessment (QSA).
© 2001 Prentice-Hall
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A Supplier Development Program:
QS 9000
• QS 9000
– A supplier development program developed by
a Chrysler/Ford/GM supplier requirement
task force.
– The purpose of QS 9000 is to provide a
common standard and a set of procedures for
the suppliers of the three companies.
© 2001 Prentice-Hall
Transparency 9-35
QS 9000 Requirements( Table 9.3)
Slide 1 of 14 (
Based on ISO 9001:1994)
Requirement
Section Number
Management responsibility
4.1
Quality system
4.2
Contract review
4.3
Design control
4.4
Document and data control
4.5
Purchasing
4.6
Control of customer-supplier product
4.7
Product identification and trace-ability
4.8
© 2001 Prentice-Hall
Process
control
4.9
Transparency 9-36
QS 9000 Requirements ( Based on
ISO 9001:1994) (continued) Slide 2 of 14
Requirement
Section Number
Inspection and testing
4.10
Control of inspection, measuring, and test inspection
4.11
Inspection and testing
4.12
Control of nonconforming product
4.13
Corrective and preventive action
4.14
Handling, storage, packaging, preservation, and delivery
4.15
Control of quality records
4.16
Internal quality audits
4.17
Training
4.18
© 2001 Prentice-Hall
Transparency 9-37
QS 9000 Requirements ( Based on
ISO 9001:1994) (continued)
Slide 3 of 14
Requirement
Section Number
Servicing
4.19
Statistical techniques
4.20
© 2001 Prentice-Hall
Transparency 9-38
QS 9000 Requirements
Slide 4 of 14
• Management Responsibility( see Table
9.4)
– The first element of the QS 9000 standard is
management responsibility. Supplier
management is responsible for documenting
its policies for quality along with its
objectives and its level of commitment.
© 2001 Prentice-Hall
Transparency 9-39
QS 9000 Requirements
Table 9.4 Management Responsibility in QS 9000
-- Quality policy
-- Organization
-- Resources
-- Management representative
-- Organizational interface
-- Management and review
-- Business plan
-- Analysis and use of company-level data
-- Customer satisfaction
© 2001 Prentice-Hall
Transparency 9-40
QS 9000 Requirements
• Quality System ( see Table 9.5)
– The supplier firm is required to establish,
document, and maintain a quality system so
that the product conforms to requirements.
© 2001 Prentice-Hall
Transparency 9-41
QS 9000 Requirements
Table 9.5 Quality system requirements in QS 9000
-- General
-- Quality system procedures
-- Quality planning
- Special characteristics
- Use of cross-functional teams
- Feasibility reviews
- Process FMEA
- The control plan
© 2001 Prentice-Hall
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QS 9000 Requirements
Slide 5 of 14
• Contract Review
– During contract review the supplier examines
the steps associated with contracting with its
own suppliers.
• Design Control ( see Table 9.6)
– The design control standard focuses on
designing processes. To meet requirements,
suppliers establish and maintain procedures
for controlling the design of the product.
© 2001 Prentice-Hall
Transparency 9-43
QS 9000 Requirements
Table 9.6 Design control requirements in QS 9000
-- General information
-- Design and development planning
- Required skills
-- Organizational and technical interfaces
-- Design input
-- Design output
-- Design review
-- Design verification
-- Design validation
-- ©Design
changes
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QS 9000 Requirements
Slide 6 of 14
• Document and Data Control
– Document and data control include the
procedures or approvals used in issuing
documents and data and making changes to
such data.
• Purchasing
– To satisfy requirements for purchasing, the
supplier must establish and maintain
documents of procedures to ensure that
purchased products conform to specified
standards.
© 2001
Prentice-Hall
Transparency 9-45
QS 9000 Requirements
Slide 7 of 14
• Control of Customer-Supplied Product
– The standard for this part of the QS 9000
standard is worded as follows, “Suppliers
must establish and maintain documented
procedures for the control of verification,
storage, and maintenance of customersupplied product provided for incorporation
into supplies or for related activities.”
© 2001 Prentice-Hall
Transparency 9-46
QS 9000 Requirements
Slide 8 of 14
• Product Identification and Trace-ability
– QS 9000 requires documented procedures for
product trace-ability during all stages of the
production process.
• Process Control
– The element relating to process control
establishes that suppliers identify and plan the
production, installation, and servicing
processes that result in quality products.
© 2001 Prentice-Hall
Transparency 9-47
QS 9000 Requirements
Slide 9 of 14
• Inspection and Testing
– Inspection and testing activities must put in
place to ensure that specified requirements
for products are met must be documented.
• Control of Inspection, Measuring, and Test
Equipment
– Suppliers must establish and document
procedures to control, calibrate, and maintain
testing equipment.
© 2001 Prentice-Hall
Transparency 9-48
QS 9000 Requirements
Slide 10 of 14
• Inspection and Test Status
– The QS 9000 standard requires that inspection
test status be maintained throughout the
production process, installation process, and
service processes of the product.
• Control of of Nonconforming Product
– When nonconforming products are produced,
they can be (1) reworked to meet requirements,
(2) accepted as is, (3) re-graded for alternative
applications, or (4) rejected and scrapped.
© 2001 Prentice-Hall
Transparency 9-49
QS 9000 Requirements
Slide 11 of 14
• Corrective and Preventive Action
– When problems result in defective products, a
standard process for addressing them is needed
so that corrective and preventive action can
take place in a disciplined way.
• Handling, Storage, Packaging,
Preservation, and Delivery
– Among the areas to be documents are
inventory control methods and the way
inventory turnovers are optimized.
© 2001 Prentice-Hall
Transparency 9-50
QS 9000 Requirements
Slide 12 of 14
• Control of Quality Records
– The records control standard states that the
supplier must establish and follow documented
procedures for identifying, collecting, indexing,
accessing, filing, storing, maintaining, and
disposing of quality-related records.
• Internal Quality Audits
– Suppliers are required to perform internal quality
audits to ensure compliance with QS 9000
requirements.
© 2001 Prentice-Hall
Transparency 9-51
QS 9000 Requirements
Slide 13 of 14
• Training
– A supplier firm must have documented
procedures for assessing training needs and for
training all personnel who might impact a
company’s quality.
• Servicing
– The servicing requirement states that a
supplier’s servicing efforts should meet the
customer’s specified requirements.
© 2001 Prentice-Hall
Transparency 9-52
QS 9000 Requirements
Slide 14 of 14
• Statistical Techniques
– The QS 9000 standard states that SPC and
process capability measures must be
maintained. Appropriate statistical techniques
are chosen during advanced quality planning
and must be maintained in the control plan.
© 2001 Prentice-Hall
Transparency 9-53
Reflecting on QS 9000
• QS 9000 is specifically designed to help
suppliers to automakers prove that they have
standardized processes for dealing with their
customers.
• The success of QS 9000 is reflected in various
corners of the auto industry ( see Quality
Highlight 9.2).
© 2001 Prentice-Hall
Transparency 9-54
Acceptance Sampling
and Statistical Sampling Techniques
Slide 1 of 3
• Acceptance Sampling
– It is a technique used to verify that incoming
goods from a supplier adhere to quality
standards.
– Acceptance sampling inspection can range
from 100% of the delivery to a relatively few
items from which the receiving firm draws
inferences about the whole shipment.
© 2001 Prentice-Hall
Transparency 9-55
Is Acceptance Sampling Needed?
Slide 2 of 3
Examples of when acceptance sampling might be needed
1. When dealing with new or unproven suppliers.
2. During start-ups and when building new products.
3. When products can be damaged in shipment.
4. When dealing with extremely sensitive products that can be
damaged easily.
5. When products can spoil during shipment.
6. When products with a certain supplier have been noticed in the
production process that bring the supplier’s performance into
question.
© 2001 Prentice-Hall
Transparency 9-56
Acceptance Sampling
Slide 3 of 3
• Acceptance Sampling Fundamentals
– We define acceptance sampling as a statistical quality
control technique used in deciding to accept or reject
a shipment of input or output.
– Acceptance sampling inspection can occur at the
beginning of the process when receiving components,
parts, or raw materials from a supplier or at the end
of production as in the case of final inspection.
– We focus here on inspection of incoming materials.
© 2001 Prentice-Hall
Transparency 9-57
Acceptance Sampling
• One interesting application of acceptance
sampling occurs with seed producers.
• Because of the biological nature of seed, a
supplier can place the seed on the truck in perfect
condition and the seed can arrive in an
unsuitable state.
• There are different methods for developing
sampling plans.
• We discuss how to develop sampling plans using
both Dodge and Romig tables and OC curves.
© 2001 Prentice-Hall
Transparency 9-58
Acceptance Sampling
• Producer’s and Consumer’s Risk
– Producer’s risk is the risk associated with
rejecting a lot of materials that has good quality.
– In this case, you have been judged inaccurately.
– Consumers risk is the exact opposite.
– As a consumer, you receive a shipment of poor
quality product and believe that it has good
quality. Therefore, you pay for the product, use it
in you production process, and suffer the
consequences.
© 2001 Prentice-Hall
Transparency 9-59
Acceptance Sampling
• Producers risk is denoted by alpha and is called a
Type Ⅰ error.
• Consumers risk is denoted by beta and is
referred to as a Type Ⅱ error.
• Table 9.7 contrast alpha and beta risk.
• The goal of acceptance sampling is to reduce
producer’s risk to low levels while maintaining
consumer’s risk at acceptance levels.
© 2001 Prentice-Hall
Transparency 9-60
Acceptance Sampling
Table 9.7 Alpha and Beta Risk
State of Nature
Product Is Good
Outcome
Product Is Defective
Consumer
Accepts
Product
OK
Consumer’s risk
Consumer
Rejects
Product
Producer’s risk
OK
© 2001 Prentice-Hall
Transparency 9-61
Statistical Sampling Techniques
Slide 1 of 8
• Acceptable Quality Level (AQL)
– The maximum percentage or proportion of
nonconformities in a lot or batch that can be
considered satisfactory as a process average.
– The AQL concept has been troublesome to
many who consider it to condone an
acceptance of less-than-perfect quality.
© 2001 Prentice-Hall
Transparency 9-62
Statistical Sampling Techniques
• Lot Tolerance Percent Defective (LTPD)
– The level of poor quality that is included in a
lot of goods.
– Lots of AQL or better should usually have an
alpha ( that is, for example, a 5%) or less
change of rejection.
– Producer’s risk is the probability that good
products will be rejected by the consumer.
© 2001 Prentice-Hall
Transparency 9-63
Statistical Sampling Techniques
• Lots of LTPD or worse should have a beta ( that is, sat a
10%) or less change of acceptance.
• Consumer risk is the chance that poor products will be
acceptance by producers.
• There is, theoretically, only one combination of sample
size (n) and acceptance number ( c ) that meets both
conditions simultaneously.
• In practice, we will be unable to meet both conditions
precisely and must choose a combination of n and c that
approximate both conditions simultaneously.
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Transparency 9-64
Statistical Sampling Techniques
Slide 2 of 8
• n and c ( single sampling plan)
– The bottom line in acceptance sampling is that
acceptance sampling plans are designed to give
us two things: n and c, where
• n = the sample size of a particular sampling plan
• c = the maximum number of defective pieces for a
sample to be rejected
– It is important to remember that you should
always randomize when selecting products
from a supplier to be inspected.
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Transparency 9-65
Statistical Sampling Techniques
Slide 3 of 8
• OC Curves
– The operating characteristic (OC) curve provides an
assessment of the probabilities of acceptance for a
shipment, given the existing quality of the shipment.
– An OC curve is constructed to show the probability of
accepting individual lots when the percent defective of
the various individual lots is known or assumed to be
at a given level.
– These curves also can be used to develop sampling
plans.
© 2001 Prentice-Hall
Transparency 9-66
Statistical Sampling Techniques
• OC Curves
– Figure 9.3 shows an OC curve for an optimal
sampling plan.
– This ideal sampling plan shows that the
probability of accepting a lot of goods with less
than 2% defective is 100%. However, OC
curves never appear like the ideal case.
– Figure 9.4 shows OC curves for a sample size
of n = 100 and c = [0, 1, 2, 3].
© 2001 Prentice-Hall
Transparency 9-67
Statistical Sampling Techniques
• OC Curves
– Notice that as c gets smaller, the OC curve gets
steeper.
– Generally speaking, this means that higher
values of c lead to higher probabilities of
accepting bad shipments ( consumer’s risk).
– Also, higher values of n affect the OC curves in
such a way that have greater confidence that
we have accepted a good shipment.
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Transparency 9-68
Statistical Sampling Techniques
Slide 4 of 8
Probability of acceptance
Pa
Figure 9.3 Perfect OC curve
1.00
P’
.01
.02
.03
.04
Lot fraction nonconforming
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Transparency 9-69
Statistical Sampling Techniques
Slide 5 of 8
Figure 9.4 Various OC Curves
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Transparency 9-70
Statistical Sampling Techniques
• Figure 9.5 shows an OC curve for N = 2000, n = 200,
c = 2.
• This shows that the probability of accepting a lot
with 2% defective product is 92%.
• This means that if a lot has 2% defective, and this
sampling plan is used, then the producer’s risk is
8%.
• If the lot really has much poorer quality, say 8%
defective, the chance of acceptance is quite low,
about 24%. This means that there is a consumer’s
risk of 24% with the poor quality lot.
© 2001 Prentice-Hall
Transparency 9-71
Statistical Sampling Techniques
• Figure 9.5 OC curve for the sampling plan N=2000,
n=200, c=2
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Transparency 9-72
Statistical Sampling Techniques
• Example 9.1
-- OC curve of N = 2000, n = 50, c = 2. is shown as
figure 9.5.
-- The producer’s risk is 1%.
-- The consumer’s risk is 42%.
© 2001 Prentice-Hall
Transparency 9-73
Statistical Sampling Techniques
Slide 6 of 8
• Building an OC Curve
– There are two ways to construct OC curves.
The first uses the binomial distribution and
the second, the Poisson distribution.
– We rely on tables that have been developed
for simplicity in computing single sampling
plans.
– The Dodge-Romig table in Figure 9.6 shows
a table that was developed to simplify such
calculations.
© 2001 Prentice-Hall
Transparency 9-74
Statistical Sampling Techniques
• Figure 9.6 Probability curves for Poisson
distribution
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Transparency 9-75
Statistical Sampling Techniques
• Example 9.2
-- n = 60, c = 2
-- Use Dodge - Romig table ( Figure 9.6) to take
the OC curve probability ( see Table 9.8) and plot
OC curve as Figure 9.7.
© 2001 Prentice-Hall
Transparency 9-76
Statistical Sampling Techniques
• Table 9.8 OC curve probabilities
© 2001 Prentice-Hall
Transparency 9-77
Statistical Sampling Techniques
• Figure 9.7 Resulting OC curve for n = 60, c = 2
© 2001 Prentice-Hall
Transparency 9-78
Statistical Sampling Techniques
• Estimating AQL and LTPD
– OC curves can be used to estimate both AQLs
and LTPDs.
– Figure 9.8 shows an OC curve for a single
sampling plan with n = 50 and c = 1.
– Figure 9.8 shows that, AQL= 0.72% and Pa =
0.95, LTPD = 7.6% and Pa = 0.1.
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Statistical Sampling Techniques
Slide 7 of 8
Figure 9.8 OC Curve of Single Sampling Plan n = 50 and c = 1
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Statistical Sampling Techniques
• More Complex Sampling Plans
-- multiple sampling plans have advantages over
single sampling plans.
-- The sample size used in multiple sampling plans
will be smaller, on average, with the same amount
of protection as a single sampling plan.
-- The decision to use multiple sampling plans will
usually be made in the first phase of the sample.
-- Exercise 9.3 provides an illustration of a double
sampling plans.
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Statistical Sampling Techniques
-- Exercise 9.3: Demonstrating a Double
Sampling Plan
- n1 = 40, c1 = 1, r1 = 5, and n2 = 60, c2 = 5, r2 = 6
- Please explain to management how this double
sampling plan works.
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Statistical Sampling Techniques
Slide 8 of 8
• Developing Double Sampling Plans
– Although OC curves can be used to develop
double sampling plans, the calculations to
develop the OC curves are much more complex
than for single sampling plans.
– We will use a standard approach that is used
by many practitioners.
– The main limitation of this plan is that sample
size must be specified, as well as AQL, LTPD,
producer’s risk, and consumer’s risk.
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Developing Double Sampling Plans
• Use Table 9.9 or Table 9.10 to develop
Double Sampling Plan.
-- AQL = 0.020, LTPD = 0.040
-- PR = 0.05, CR = 0.10, n1 = 0.5 n2
-- LTPD/AQL = 0.040/0.020 = 2
-- From Table 9.10, Take Double Sampling Plan
number 15, c1= 4 , c2 = 20 and p’n1 = 4.75 ( P =
0.95)
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Developing Double Sampling Plans
( continued)
• n1 = p’n1/AQL = 4.75/0.020 = 237.5 = 238
• n2 = 2 n1 = 2* 237.5 = 475.
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Developing Double Sampling Plans
• Table 9.9 values for constructing a double sampling plan having a
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specified p1 and p2 ( n1=n2,   0.05,   0.10 )
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Developing Double Sampling Plans
• Table 9.10 values for constructing a double sampling plan having
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a specified p1 and p2 ( n1=2n2,   0.05,   0.10 )
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Acceptance Sampling in Continuous
Production
• The MIL-STD-1235C (1988) named “ Single
and Multiple – Level Continuous Sampling
Procedures and Table for Inspection by
Attributes” is available from the Department of
Defense ( DoD).
• The military standard can be ordered from the
internet address of DoD
http://www.dod.ssp.daps.mil/
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