Six Sigma and Statistical Quality Control Outline • Quality and Six Sigma: Basic ideas and history • Juran Trilogy – Control – Improvement – Planning • Quality Strategy • Focus on Statistical Methods – Process Capability ideas and metrics – Control charts for attributes and variables A Brief History • The Craft System • Taylorism (Scientific Management) • Statistical Quality Control – Pearson, Shewhart, Dodge • Human Relations School – Mayo, Maslow, Simon, Herzberg, Likert • The Japanese Revolution (1950) – Ishikawa, Taguchi, Deming, Juran, Feigenbaum • The USA Wakes Up (1980) – Crosby • 1990s: Six Sigma • The Need for Organizational Change JIT and TQM Walter Shewhart 1891 - 1967 Operations -- Prof. Juran W. Edwards Deming 1900 - 1993 4 Joseph M. Juran 1904 - 2008 What is Quality? • Freedom from Defects – Quality Costs Less – Affects Costs • Presence of Features – Quality Costs More – Affects Revenue Juran Trilogy Planning, Control, Improvement Juran Trilogy 40 35 30 Defect Rate 25 20 15 10 5 Time 40 38 36 34 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 0 -2 -4 -6 -8 -10 0 Juran Trilogy Planning, Control, Improvement Juran Trilogy Planning Control Improvement Control 40 Sporadic Spike 35 30 Defect Rate 25 20 15 Chronic Waste 10 5 40 38 36 34 32 30 28 24 22 20 18 16 12 10 8 6 4 2 0 -2 -4 -6 -8 -10 14 Time 26 Chronic Waste 0 Quality Control • Aimed at preventing unwanted changes • Works best if deployed at the point of production or service delivery (Empowerment) • Tools: – – – – Established, measurable standards Measurement and feedback Control charts Statistical inference Quality Control Establish Standard Operate Measure Performance Yes OK? Corrective Action No Compare to Standard Quality Improvement • Aimed at creating a desirable change • Two distinct “journeys” – Diagnosis – Remedy • Project team approach • Tools – – – – Process flow diagram Pareto analysis Cause-effect (Ishikawa, fishbone) diagram Statistical tools Quality Improvement • Identify problem • Analyze symptoms • Formulate theories • Test theories - Identify root cause • Identify remedy • Address cultural resistance • Establish control Quality Planning • Aimed at creating or redesigning (reengineering) a process to satisfy a need • Project team approach • Tools – – – – – Market research Failure analysis Simulation Quality function deployment Benchmarking Quality Planning • Verify goal • Identify customers • Determine customer needs • Develop product • Develop process • Transfer to operations • Establish control Strategic Quality Planning • • • • • • • • Mission Vision Long-term objectives Annual goals Deployment of goals Assignment of resources Systematic measurement Connection to rewards and recognition Strategic Quality Planning • Aimed at establishing long-range quality objectives and creating an approach to meeting those objectives • Top management’s job • Integrated with other objectives – – – – Operations Finance Marketing Human Resources Six Sigma Defined (High-Level) • The application of rigorous quantitative tools in the planning, control, and improvement processes in an effort to meet customer requirements 100% of the time. • Old wine in new bottles? Process Capability • The Relationship between a Process and the Requirements of its Customer • How Well Does the Process Meet Customer Needs? Process Capability • Specification Limits reflect what the customer needs • Natural Tolerance Limits (a.k.a. Control Limits) reflect what the process is capable of actually delivering • These look similar, but are not the same Specification Limits • Determined by the Customer • A Specific Quantitative Definition of “Fitness for Use” • Not Necessarily Related to a Particular Production Process • Not Represented on Control Charts Tolerance (Control) Limits • Determined by the inherent central tendency and dispersion of the production process • Represented on Control Charts to help determine whether the process is “under control” • A process under control may not deliver products that meet specifications • A process may deliver acceptable products but still be out of control Measures of Process Capability • Cp • Cpk • Percent Defective • Sigma Level Example: Cappuccino • Imagine that a franchise food service organization has determined that a critical quality feature of their world-famous cappuccino is the proportion of milk in the beverage, for which they have established specification limits of 54% and 64%. • The corporate headquarters has procured a customdesigned, fully-automated cappuccino machine which has been installed in all the franchise locations. • A sample of one hundred drinks prepared at the company’s Stamford store has a mean milk proportion of 61% and a standard deviation of 3%. Example: Cappuccino • Assuming that the process is in control and normally distributed, what proportion of cappuccino drinks at the Stamford store will be nonconforming with respect to milk content? • Try to calculate the Cp, Cpk, and Parts per Million for this process. • If you were the quality manager for this company, what would you say to the store manager and/or to the big boss back at headquarters? What possible actions can be taken at the store level, without changing the inherent variability of this process, to reduce the proportion of non-conforming drinks? Lower Control Limit LNTL 3 .61 3.03 .52 Upper Control Limit UNTL 3 .61 3.03 .70 Nonconformance Z1 .54 .61 / .03 2.33 Z2 .64 .61 / .03 1.00 Nonconformance -4 -3 -2 -1 0 1 values of z 2 3 4 Nonconformance • 0.00990 of the drinks will fall below the lower specification limit. • 0.84134 of the drinks will fall below the upper limit. • 0.84134 - 0.00990 = 0.83144 of the drinks will conform. • Nonconforming: 1.0 - 0.83144 = 0.16856 (16.856%) Cp Ratio Cp USL LSL 6 0.64 0.54 60.03 0.10 0.18 0.555 Cpk Ratio C pk USL LSL min , 3 3 0.64 0.61 0.61 0.54 min , 30.03 30.03 min 0.333 ,0.777 0.333 Parts per Million PPM 1 ,000 ,000 0.169 169 ,000 (about 1.38 Sigma) A 1 2 Defects per million 3 4 Sigma level B 169000 1.375424 C D E =1000000*2*(1-NORMSDIST(B4)) F Quality Improvement • Two Approaches: – Center the Process between the Specification Limits – Reduce Variability Approach 1: Center the Process Approach 1: Center the Process Approach 1: Center the Process ZLSL .54 .59 / .03 1.67 ZUSL .64 .59 / .03 1.67 Approach 1: Center the Process • 0.04746 of the drinks will fall below the lower specification limit. • 0.95254 of the drinks will fall below the upper limit. • 0.95254 - 0.04746 = 0.90508 of the drinks will conform. • Nonconforming: 1.0 - 0.90508 = 0.09492 (9.492%) Approach 1: Center the Process • Nonconformance decreased from 16.9% to 9.5%. • The inherent variability of the process did not change. • Likely to be within operator’s ability. Approach 2: Reduce Variability • The only way to reduce nonconformance below 9.5%. • Requires managerial intervention. Quality Control Establish Standard Operate Measure Performance Yes OK? Corrective Action No Compare to Standard Quality Control • Aimed at preventing and detecting unwanted changes • An important consideration is to distinguish between Assignable Variation and Common Variation • Assignable Variation is caused by factors that can clearly be identified and possibly managed • Common Variation is inherent in the production process • We need tools to help tell the difference When is Corrective Action Required? • Operator Must Know How They Are Doing • Operator Must Be Able to Compare against the Standard • Operator Must Know What to Do if the Standard Is Not Met When is Corrective Action Required? • Use a Chart with the Mean and 3-sigma Limits (Control Limits) Representing the Process Under Control • Train the Operator to Maintain the Chart • Train the Operator to Interpret the Chart Example: Run Chart 0.285 0.280 0.275 0.270 0.265 0.260 0.255 0.250 0.245 0.240 0.235 0.230 0.225 0.220 0.215 0.210 0.205 0.200 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 When is Corrective Action Required? Here are four indications that a process is “out of control”. If any one of these things happens, you should stop the machine and call a quality engineer: •One point falls outside the control limits. •Seven points in a row all on one side of the center line. •A run of seven points in a row going up, or a run of seven points in a row going down. •Cycles or other non-random patterns. Example: Run Chart 15.500 15.400 15.300 15.200 15.100 15.000 14.900 14.800 14.700 14.600 14.500 14.400 14.300 14.200 14.100 14.000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Type I and Type II Errors In Control Out of Control Assume Process is OK Correct Decision ERROR (Type II) Take Corrective Action ERROR (Type I) Correct Decision When is Corrective Action Required? One point falls outside the control limits. •0.27% chance of Type I Error Seven points in a row all on one side of the center line. •0.78% chance of Type I Error A run of seven points in a row going up, or a run of seven points in a row going down. •0.78% chance of Type I Error Basic Types of Control Charts Attributes (“Go – No Go” data) •A simple yes-or-no issue, such as “defective or not” •Data typically are “proportion defective” •p-chart Variables (Continuous data) •Physical measurements such as dimensions, weight, electrical properties, etc. •Data are typically sample means and standard deviations •X-bar and R chart Statistical Symbols (Attributes) n Number of observations in each sample p Proportion defective (an unknown population parameter) p Sample proportion defective (estimate of p from one sample) p Sample proportion defective (estimate of p from all samples) sp Standard deviation of sample proportions p-chart Example Number of defectives in sample p Sample size p Number of defectives in all samples Sample size * Number of samples p-chart Example sp p 1 p n UCL p zsp LCL p zsp Sample Sample Size Number of Defects p 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 4 2 5 3 6 4 3 7 1 2 3 2 2 8 3 0.04 0.02 0.05 0.03 0.06 0.04 0.03 0.07 0.01 0.02 0.03 0.02 0.02 0.08 0.03 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 A B C D Sample Sample Size Number of Defects p-bar 1 100 4 0.04 2 100 2 0.02 3 100 5 0.05 4 100 3 0.03 5 100 6 0.06 6 100 4 0.04 7 100 3 0.03 8 100 7 0.07 9 100 1 0.01 10 100 2 0.02 11 100 3 0.03 12 100 2 0.02 13 100 2 0.02 14 100 8 0.08 15 100 3 0.03 p-bar-bar 0.0367 stdev(p-bar) 0.0188 E F G =AVERAGE(D2:D16) =SQRT(((D17)*(1-D17))/(B16)) H 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 A B C D Sample Sample Size Number of Defects p-bar 1 100 4 0.04 2 100 2 0.02 3 100 5 0.05 4 100 3 0.03 5 100 6 0.06 6 100 4 0.04 7 100 3 0.03 8 100 7 0.07 9 100 1 0.01 10 100 2 0.02 11 100 3 0.03 12 100 2 0.02 13 100 2 0.02 14 100 8 0.08 15 100 3 0.03 p-bar-bar 0.0367 stdev(p-bar) 0.0188 UCL LCL 0.0930 -0.0197 E LCL 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 F UCL 0.0930 0.0930 0.0930 0.0930 0.0930 0.0930 0.0930 0.0930 0.0930 0.0930 0.0930 0.0930 0.0930 0.0930 0.0930 G =$D$20 =D17+3*D18 =D17-3*D18 Note: If the LCL is negative, we round it up to zero. 0.150 0.125 0.100 0.075 0.050 0.025 0.000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Statistical Symbols (Variables) X A Random Variable x One Observation of X i n The Number of Observations of X Mean (A Population Parameter) X Mean (An Estimate of from Sample Data) Standard Deviation (A Population Parameter) s Standard Deviation (An Estimate of from Sample Data) X-bar, R chart Example For X-bar chart LCL X A2 R UCL X A2 R For R chart LCL D3 R UCL D4 R Sample 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Obs 1 10.682 10.787 10.780 10.591 10.693 10.749 10.791 10.744 10.769 10.718 10.787 10.622 10.657 10.806 10.660 Obs 2 10.689 10.860 10.667 10.727 10.708 10.714 10.713 10.779 10.773 10.671 10.821 10.802 10.822 10.749 10.681 Obs 3 10.776 10.601 10.838 10.812 10.790 10.738 10.689 10.110 10.641 10.708 10.764 10.818 10.893 10.859 10.644 Obs 4 10.798 10.746 10.785 10.775 10.758 10.719 10.877 10.737 10.644 10.850 10.658 10.872 10.544 10.801 10.747 Obs 5 10.714 10.779 10.723 10.730 10.671 10.606 10.603 10.750 10.725 10.712 10.708 10.727 10.750 10.701 10.728 n 2 3 4 5 6 7 8 9 10 11 A2 1.88 1.02 0.73 0.58 0.48 0.42 0.37 0.34 0.31 0.29 From Exhibit TN7.7 D3 0.00 0.00 0.00 0.00 0.00 0.08 0.14 0.18 0.22 0.26 D4 3.27 2.57 2.28 2.11 2.00 1.92 1.86 1.82 1.78 1.74 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 A Sample 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 B Obs 1 10.682 10.787 10.780 10.591 10.693 10.749 10.791 10.744 10.769 10.718 10.787 10.622 10.657 10.806 10.660 C Obs 2 10.689 10.860 10.667 10.727 10.708 10.714 10.713 10.779 10.773 10.671 10.821 10.802 10.822 10.749 10.681 D Obs 3 10.776 10.601 10.838 10.812 10.790 10.738 10.689 10.110 10.641 10.708 10.764 10.818 10.893 10.859 10.644 E Obs 4 10.798 10.746 10.785 10.775 10.758 10.719 10.877 10.737 10.644 10.850 10.658 10.872 10.544 10.801 10.747 F Obs 5 10.714 10.779 10.723 10.730 10.671 10.606 10.603 10.750 10.725 10.712 10.708 10.727 10.750 10.701 10.728 Averages G Avg 10.732 10.755 10.759 10.727 10.724 10.705 10.735 10.624 10.710 10.732 10.748 10.768 10.733 10.783 10.692 10.728 H I J K Range 0.116 0.259 0.171 0.221 0.119 0.143 0.274 0.669 =AVERAGE(B10:F10) 0.132 0.179 =MAX(B12:F12)-MIN(B12:F12) 0.163 0.250 0.349 0.158 0.103 =AVERAGE(H2:H16) 0.220 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 A Sample 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 B Obs 1 10.682 10.787 10.780 10.591 10.693 10.749 10.791 10.744 10.769 10.718 10.787 10.622 10.657 10.806 10.660 C Obs 2 10.689 10.860 10.667 10.727 10.708 10.714 10.713 10.779 10.773 10.671 10.821 10.802 10.822 10.749 10.681 D Obs 3 10.776 10.601 10.838 10.812 10.790 10.738 10.689 10.110 10.641 10.708 10.764 10.818 10.893 10.859 10.644 E Obs 4 10.798 10.746 10.785 10.775 10.758 10.719 10.877 10.737 10.644 10.850 10.658 10.872 10.544 10.801 10.747 F Obs 5 10.714 10.779 10.723 10.730 10.671 10.606 10.603 10.750 10.725 10.712 10.708 10.727 10.750 10.701 10.728 Averages G Avg 10.732 10.755 10.759 10.727 10.724 10.705 10.735 10.624 10.710 10.732 10.748 10.768 10.733 10.783 10.692 10.728 H Range 0.116 0.259 0.171 0.221 0.119 0.143 0.274 0.669 0.132 0.179 0.163 0.250 0.349 0.158 0.103 0.220 I J n 2 3 4 5 6 7 8 9 10 11 K A2 1.88 1.02 0.73 0.58 0.48 0.42 0.37 0.34 0.31 0.29 A2 D3 D4 Mean Range 0.58 0 2.11 10.728 0.220 L D3 0.00 0.00 0.00 0.00 0.00 0.08 0.14 0.18 0.22 0.26 =K5 =G17 =H17 M D4 3.27 2.57 2.28 2.11 2.00 1.92 1.86 1.82 1.78 1.74 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 A Sample 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 B Obs 1 10.682 10.787 10.780 10.591 10.693 10.749 10.791 10.744 10.769 10.718 10.787 10.622 10.657 10.806 10.660 C Obs 2 10.689 10.860 10.667 10.727 10.708 10.714 10.713 10.779 10.773 10.671 10.821 10.802 10.822 10.749 10.681 D Obs 3 10.776 10.601 10.838 10.812 10.790 10.738 10.689 10.110 10.641 10.708 10.764 10.818 10.893 10.859 10.644 E Obs 4 10.798 10.746 10.785 10.775 10.758 10.719 10.877 10.737 10.644 10.850 10.658 10.872 10.544 10.801 10.747 X-Bar UCL LCL 10.85625 10.60058 R-Bar UCL LCL 0.465044 0 F Obs 5 10.714 10.779 10.723 10.730 10.671 10.606 10.603 10.750 10.725 10.712 10.708 10.727 10.750 10.701 10.728 Averages G Avg 10.732 10.755 10.759 10.727 10.724 10.705 10.735 10.624 10.710 10.732 10.748 10.768 10.733 10.783 10.692 10.728 =K16+K13*K17 =K16-K13*K17 =K15*K17 =K14*K17 H Range 0.116 0.259 0.171 0.221 0.119 0.143 0.274 0.669 0.132 0.179 0.163 0.250 0.349 0.158 0.103 0.220 I J K A2 D3 D4 Mean Range 0.58 0 2.11 10.728 0.220 X-bar Chart 10.90 10.85 10.80 10.75 10.70 10.65 10.60 10.55 10.50 10.45 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 R chart 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Interpretation • Does any point fall outside the control limits? • Are there seven points in a row all on one side of the center line? • Is there a run of seven points in a row going up, or a run of seven points in a row going down? • Are there cycles or other non-random patterns? Six Sigma Defined (Low-Level) A Process in which the Specification Limits are Six Standard Deviations above and below the Process Mean Two Approaches: •Move the Specification Limits Farther Apart •Reduce the Standard Deviation Approach #1 Ask the Customer to Move the Specification Limits Farther Apart. 2-sigma Process Cp = 0.667 Cpk = 0.667 45,500 ppm Spec Limits 3-sigma Process Cp = 1.0 Cpk = 1.0 2,700 ppm Spec Limits 4-sigma Process Cp = 1.333 Cpk = 1.333 63 ppm Spec Limits 5-sigma Process Cp = 1.667 Cpk = 1.667 0.57 ppm Spec Limits 6-sigma Process Cp = 2.0 Cpk = 2.0 0.002 ppm Spec Limits Approach #2 Reduce the Standard Deviation. 2-sigma Process Cp = 0.667 Cpk = 0.667 45,500 ppm Spec Limits 3-sigma Process Cp = 1.0 Cpk = 1.0 2,700 ppm Spec Limits 4-sigma Process Cp = 1.333 Cpk = 1.333 63 ppm Spec Limits 5-sigma Process Cp = 1.667 Cpk = 1.667 0.57 ppm Spec Limits 6-sigma Process Cp = 2.0 Cpk = 2.0 0.002 ppm Spec Limits Process Drift What Happens when the Process Mean Is Not Centered between the Specification Limits? 3-sigma Process (centered) Cp = 1.0 Cpk = 1.0 2,700 ppm Spec Limits 3-sigma Process (shifted 0.5 std. dev.) Cp = 1.0 Cpk = 0.833 ppm = 6,442 (about 2.72-sigma) Spec Limits 3-sigma Process (shifted 1.0 std. dev.) Cp = 1.0 Cpk = 0.667 ppm = 22,782 (about 2.28-sigma) Spec Limits 3-sigma Process (shifted 1.5 std. dev.) Cp = 1.0 Cpk = 0.5 ppm = 66,811 (about 1.83-sigma) Spec Limits Six Sigma: Many Meanings • A Symbol • A Measure • A Benchmark or Goal • A Philosophy • A Method Six Sigma: A Symbol • is a Statistical Symbol for Standard Deviation • Standard Deviation is a Measure of Dispersion, Volatility, or Variability Six Sigma: A Measure • The “Sigma Level” of a process can be used to express its capability — how well it performs with respect to customer requirements. • Percent Defects, Cp, Cpk, PPM Six Sigma: A Benchmark or Goal • The specific value of 6 Sigma (as opposed to 5 or 4 Sigma) is a benchmark for process excellence. • Adopted by leading organizations as a goal for process capability. Six Sigma: A Philosophy • A vision of process performance • Tantamount to “zero defects” • A “Management Mantra” Six Sigma: A Method • Really a Collection of Methods: – – – – Product/Service Design Quality Control Quality Improvement Strategic Planning Where Does “3.4 PPM” Come From? • Six Sigma is commonly defined to be equivalent to 3.4 defective parts per million. • Juran says that a Six Sigma process will produce only 0.002 defective parts per million. • What gives? Normal Curve Probabilities ±1 Sigma ±2 Sigmas ±3 Sigmas ±4 Sigmas ±5 Sigmas ±6 Sigmas 68.3% of Data 95.4% 99.73% 99.994% 99.99994% 99.9999998% 1 2 3 4 5 6 7 8 A Area under the curve z > 6 0.00000000099 Total area outside of 6 sigma limits 0.00000000198 Parts per Million 0.00198 B C =1-NORMSDIST(6) =2*A2 =A5*1000000 Process Centered between Spec Limits Sigma Level 1 2 3 4 5 6 Cp 0.333 0.667 1.000 1.333 1.667 2.000 Cpk PPM 0.333 317,310 0.667 45,500 1.000 2,700 1.333 63.4 1.667 0.57 2.000 0.002 Process Shifted by 1.5 Standard Deviations Sigma Level 1 2 3 4 5 6 Cp Cpk PPM 0.333 -0.167 697,672 0.667 0.167 308,770 1.000 0.500 66,810 1.333 0.833 6,210 1.667 1.167 232.7 2.000 1.500 3.4 Where Does “3.4 PPM” Come From? • The 3.4 defective parts per million definition of Six Sigma includes a “worst case” scenario of a 1.5 standard deviation shift in the process. • It is assumed that there is a very high probability that such a shift would be detected by SPC methods (low probability of Type II error). Six Sigma in Context • Is Six Sigma dramatically different from old-fashioned quality control? • Is Six Sigma a departure from 1980’sstyle TQM? Six Sigma in Context • What Is New? – – – – – – Focus on Quantitative Methods Focus On Control A Higher Standard A New Metric for Defects (PPM) Lots of training Linkage between quality goals and employee incentives? Using Six Sigma • A New Standard; Not Adopted Uniformly across Industries • Beyond Generalities, Need to Develop Organization-Specific Methods • Hard Work, Not Magic • “A Direction Not a Place” Summary • Quality and Six Sigma: Basic ideas and history • Juran Trilogy – Control – Improvement – Planning • Quality Strategy • Focus on Statistical Methods – Process Capability ideas and metrics – Control charts for attributes and variables