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Inputs Transformation Process Throughput
Managing Operations AFocus on ExcellenceCox, Blackstone, and
Schleier, 2003
Chapter 14
The Tools of Quality:
Exceeding Customers Expectations
CBS Chapter 14 14-2
The Seven Tools of Quality
1. Control chart
2. Run chart
3. Pareto chart
4. Flow chart
5. Cause and effect diagram
6. Histogram
7. Scatter diagram
CBS Chapter 14 14-3
Statistical Process Control
A method of inspection by which it canbe determined whether a process is in
control
Differs from Acceptance Sampling in
that SPC does not make judgements
about the quality of the item processed.
Key tool is the Control Chart of which
several types exist.
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CBS Chapter 14 14-4
SPC Defined
All processes are affected by multiple factorsand, therefore, SPC can be applied to anyprocess.
There is inherent variation in any process whichcan be measured and controlled.
SPC does not eliminate variation, but it doesallow the user to track special cause variation.
SPC is a statistical method of separatingvariation resulting from special causes fromnatural variation and to establish and maintainconsistency in the process, enabling processimprovement. (Goetsch & Davis, 2003. p. 631)
CBS Chapter 14 14-5
Variation in Processes
Common Cause variation - the variation
which in inherent in the process itself; when
sampled, a normal distribution is found; a
process is said to be in statistical control
when only common cause variation exists. Special (or Assignable) Cause variation - the
variation in process output that might be
traced to a specific cause; the process is said
to be out of control when a special causevariation exists.
CBS Chapter 14 14-6
Rationale for SPC
Control of Variation
Continuous Improvement
Predictability of Processes
Elimination of Waste
Product Inspection
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CBS Chapter 14 14-7
Creating Control Charts
All control charts rely on the periodic
sampling and measurement of items.
The data collected will allow thecalculation of a centerline, and upper
and lower control limits.
The centerline is the mean of all
samples, whereas the control limits are,
conceptually, the mean +/- three
standard deviations.
CBS Chapter 14 14-8
Interpreting Control Charts
4 (95.5%)
6 (99.7%)
2(68%)
SPC is based upon the
Central Limit Theorem
which tells us, in effect,
that the samples will
follow a normal
distribution regardless
of the shape of the
parent distribution.
Interpreting control charts is, then, all about probabilities if
the observations arent probable, then there must be a
special cause variation.
CBS Chapter 14 14-9
Interpreting Control ChartsSpecial Cause Variation is assumed
to exist if:1. Any point falls outside the
control limits.
2. Nine consecutive observationsfall on one side of the mean.
3. Six consecutive observationsare increasing (or decreasing.)
4. 14 observations alternateabove and below the mean.
5. Two of three consecutivepoints fall in zone C in one-halfof the chart.
6. Four of five consecutive pointsfall in zone B in one-half of thechart.
7. 15 consecutive observationsin the A zones.
8. Eight consecutive pointsoutside of the A zones.
LCL
UCL
-3x
+3x
+2
+2
+1+1
A = 34%
A = 34%
B = 13.75%
B = 13.75%
C = 2.1%
C = 2.1%
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CBS Chapter 14 14-10
Risks of SPC
SPC has the same Type I and Type II
risks as acceptance sampling
If the process if in fact in control but we
conclude that it is out of control, we
have committed a Type I error.
If the process if in fact out of control but
we conclude that it is in control, we
have committed a Type II error.
CBS Chapter 14 14-11
Common control charts for
variables & attributes
Number of defects per
unit (area, time, length,
etc.)
U-chart
Number of defectsC-chart
Number of defectivesNp-chart
Percent defectiveP-chartAttributes data
Individual valuesX-Rs
Median & RangeX-tilde & R
Mean & RangeX-bar & RVariables data
Statistical QtyChart TypeData Category
CBS Chapter 14 14-12
What SPC does not do
SPC only determines whether a process isin statistical control NOT whether theprocess is producing within specifications
nor whether the process is even capable
of producing within specifications.
We must rely on another measure AFTER
we have assured that the process is in
control using SPC.
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CBS Chapter 14 14-13
Process Capability
Process capability is the ability of the
process, as it currently exists, to
product within specifications.
One measure known as Cp comparesthe natural variation of the process to
the specification width.
Another, more precise, measure known
as Cpk compares the natural variation of
the process to the specification width
and target.
CBS Chapter 14 14-14
Process Capability
6 (99.7%)
Process Capability (PC) is the range in which "all" output
can be produced the inherent capability of the process.
Definition:PC = 6
CBS Chapter 14 14-15
Process Capability
and Process Specifications
X
4.90 4.95 5.00 5.05 5.10 5.15cm
Tolerance band
Inherent capability (6 )
LSL USL
OutputOutputout of specout of spec
OutputOutputout of specout of spec
Process outputdistribution
5.010
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CBS Chapter 14 14-16
Process Capability
and Process Specifications
This process is
NOT CAPABLE.
INSPECT - Sort out
the defectives
This process is
CAPABLE of
producing all good
output.
Control the process.
LowerSpecLimit
UpperSpecLimit
CBS Chapter 14 14-17
Process Capability Index
3
Upper Spec Limit - X
3
X - Lower Spec LimitORthe smaller of:Cpk =
Index Cpk compares the spread and location
of the process, relative to the specifications.
{
CBS Chapter 14 14-18
Cpk Values
LSL USL
Cpk = 1.0
LSL USL
Cpk = 1.0
LSL USL
Cpk = 3.0
LSL USL
Cpk = 0.80
LSL USL
Cpk = 0.60
LSL USL
Cpk = 1.33
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CBS Chapter 14 14-19
Run Charts
Number of
defectives
Time
Figure 14.13. Run chart
x
x
x
x
x
x
x
x
CBS Chapter 14 14-20
Pareto Chart
Figure 14.14. Pareto Analysis of problems at a pizza parlor
Crusttoohard
Fewtop-pings
Needmorecheese
Toomuchsauce
Servicetooslow
20
40
60
80100
120140
160180200
x
x
xx x
Comments
CBS Chapter 14 14-21
Flow ChartElement Time distance) Brief Descri ption
5 min. Sale is made. Items sold are entered into POS terminal.D 4 hours Average delay until the end of the day.1 min. Inventory records are updated for sales and receipts by computer.D 14 hours Delay until order review.20 min. Manager builds an order to maximize discount/minimize freight costs by ordering reorder
items and other items required to reach discount. 3 days Mai l o rder to vendor .3 days Vendor processes order. 3 days Vendor ships orde r. 5 min. Inspect shipment for damage. 5 min. Move shipment to stock room.D 2 days Temporarily placed in stock room until time is available to stock shelf. 2 min. Move coffees to proper shelves.30 minutes Coffees/teas placed in correct display containers. 15 days Wait until time to pay invoice.5 min. Pay invoice.Summary of Work ElementsElement Number Time/distance Percentage
6 3 days 61 min. 11D 3 2 days 18 hrs. 11 4 6 days 7 min. 22 1 15 days 56 1 5 min. 0Figure 11.7. Process flow chartcurrent method of inventory replenishment
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CBS Chapter 14 14-22
Cause and Effect Diagram
Figure 14.15. Ishikawa (cause and effect) diagram for car wont start
Out of Gas
FUEL
BATTERY
Fuel Line Closed
Cable Corroded
Wires CorrodedLoose Wire
Old
Lights Left On
Dead
STARTER
SOLENOID WIRES
CAR WONT
START
CBS Chapter 14 14-23
Histogram
3
6
8
11
1417
14
11
8
6
3
0
2
4
6
8
10
12
14
16
18
2 3 4 5 6 7 8 9 10 11 12Result
Frequency
Figure 14.16a. Histogram of expected results
2
4
10
11
23
14
15
9
11
4
1
0
5
10
15
20
25
2 3 4 5 6 7 8 9 1 0 11 12
Result
Frequency
Figure 14.16b. Histogram of actual
results
CBS Chapter 14 14-24
Possible Histogram Shapes
3
6
9
12
4
12
9
6
3
0
2
4
6
8
10
12
14
1 2 3 4 5 6 7 8 9Category
Frequency
Figure 14.18. Bimodal histogram
12
9
6
3
2
0
2
4
6
8
10
12
14
1 2 3 4 5C a t e g o r y
Frequency
F igu re 14.19. C liff-l ik e h istogram
0
1
2
3
4
5
6
7
8
9
10
1 2 3 4 5 6 7 8 9 10 11 12Category
Frequency
Figure 14.20. Saw-toothedhistogram
0
2
4
6
8
10
12
14
1 2 3 4 5 6 7 8 9 10
Category
Frequency
Figure 14.21. Skewedhistogram
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CBS Chapter 14 14-25
Scatter Diagram
0
5
10
15
20
25
30
35
40
0 50 100 150 200 250 300 350 400 450Yards Gained Rushing
PointsScored
Figure 14.22. Scatter diagram
CBS Chapter 14 14-26
The Seven New Tools
1. Affinity diagram
2. Relational diagram
3. Tree diagram
4. Matrix diagram
5. Program decision process chart
6. Arrow diagram
7. Matrix data analysis
CBS Chapter 14 14-27
Affinity Diagram
A method to get your arms around a complex problem.Similar to a brainstorming session wherein each
participant writes his/her idea for a cause on an index
card.
12
10
13
7
4
3 11
5
12
6
8
16
15
9
14
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CBS Chapter 14 14-28
Affinity DiagramA method to get your arms around a complex problem.
Similar to a brainstorming session wherein each
participant writes his/her idea for a cause on an index
card.
12
10
13
7
4
3
11
5
12
6
8
16
15
9
14
The possible causes are then arranged into groups of
similar causes. The groups might be functional areas.
Group 1 Group 2 Group 3 Group 4
CBS Chapter 14 14-29
Relational Diagram
Used to logically examine the interrelationships among the
causes within a particular grouping.
The problem is written to the left and the causes are placed
according to their relationship to the problem -- the further away
the weaker the relationship.
1 5
12
16 9 14
Statement of
problem
CBS Chapter 14 14-30
Relationship Diagram ExampleLosses not
defined
Accepting currentreality
Status quo is
rewarded
Planning work
Too many
projects
Schedule is
overloadedBusy
maximizing
department
profitEmployees lack
understanding
Lack time to
develop
employees
Short-term
profit goals
Lack incentive
for
improvement
Improvement
work competes
with day-to-day
work
Management is
not setting a
good example
Figure 14.23. Relational diagram
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CBS Chapter 14 14-31
Tree Diagram
Used to identify and sequence the tasks necessary to accomplish
an objective (the opposite of the problem) using the affinity
diagram and the relationship diagram as a reference.
Objective
1
10
5
4
3 13
2
12
14
86
7
11
15
9 16
CBS Chapter 14 14-32
Tree
Diagram
Example
Improve interaction
among functional
areas represented
in the group, in the
creation and
implementation of
an effective business
plan
Develop
procedures
to assure
team
effectiveness
Interaction
techniques
Make group
meetings
more
Effective
Provide
system to
communicate
progress
Show
functional
interdependencies
in plan
development
Use consensus
building
techniques in plan
development and
implementation
Interaction must
occur with
frequency
Publish and
adhere to agenda,
with team input
Require each
function to
periodically
report status
Distribute
tracking charts
of team
performance
Each function
shows its plan
to fulfill
overall plan
Identify
relationships in
dependencies in
project plan
Participate in
joint trainingof planning
methods
Use facilitator
approach at
meetings
Figure 14.24. Example tree diagram
CBS Chapter 14 14-33
Matrix Diagram
A5
A4
A3
A2
A1
B5B4B3B2B1A\B
C1
C2
C3
B5B4B3B2B1
C4
C5
A5
A4
A3
A2
A1
D5 D4 D3 D2 D1
C1
C2
C3
B5B4B3B2B1
C4
C5
A5
A4
A3
A2
A1
L-shaped
X-shapedT-shaped
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CBS Chapter 14 14-34
Matrix Diagram
Example
The matrix L-diagram is
often used to identify and
assign responsibility for
tasks identified in the tree
diagram.
1 = primary
2 = secondary
3 = tertiary
Dept 1 Dept 2 Dept 3
1 1 2
10 3 1 2
5 1
4 1
3 2 3 1
13 1 3 2
2 2 1
12 1 2
14 1
8 2 1
6 1 2
7 3 2 111 3 1 2
15 1 2
9 2 116 1 2
T
A
S
K
CBS Chapter 14 14-35
Program
Decision
Process
Chart
Case received via mail.
Case scanned by paralegal
No conflict of interest
Attorney and paralegal
meet with client
Attorney and paralegal
"discoverevidence
A settlement offer is made
Plaintiff doesn't settle
File trial motions
Hold hearing on motions
Judge doesn't order mediation
Mediate settlement
Set trial date
Depose witnesses
Go to trial
Figure 14.27. Sample program decision process chart
Conflict of interest
Sent to another attorney
Plaintiff settles
File motion todismiss case
Judge orders mediation
No settlement
CBS Chapter 14 14-36
Arrow DiagramOperations 1 2 3 4 5 6 7 8 9 10 11 12
Foundation
Framework
Scaffolding
Exterior
Interior walls
Plumbing andelectrical work
Doors andwindows
Interior painting
Interior finished
Final inspectionand delivery
Figure 14.28a. Gantt chart to plan the construction of a house
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CBS Chapter 14 14-37
Arrow Diagram
32
7
6 10
9
1
4 5
8
Figure 14.28b. Arrow diagram for construction of a house
CBS Chapter 14 14-38
What is QFD?A specialized method for making customers part of
the product development cycle.
It translates customer wants into what the
organization produces enabling the organization
to:
Prioritize customer needs;
Find innovative responses to those needs; and,
Improve processes to maximize effectiveness.
CBS Chapter 14 14-39
Structure of QFD
1
1 Customer Input
2
2 Manufacturers Current
Requirements/Specifications
to Suppliers
3
3 Planning Matrix
importance rating
competition rating
target values
scale-up needed
sales points
4
4 Relationships
5
5 Prioritized list of
manufacturers critical
process requirements
6
6 Process requirement
trade-offs
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CBS Chapter 14 14-40
QFD Example
Good balance
X
X = conflicting requirement
+ = supporting requirement
A = Competitor 1
B = Competitor 2C = Our Boom Box
WORST BEST
PRIORITY
5
4
4
6
1
4
2
Tapes from CD
Large speakers
Light weight
Good sound
Attractive
Inexpensive
A B C
B C C
A C B
B AC
C B A
C AB
BC A
+
+
+
+
XX
Product
characteristics
Plastic
case
Ta
perecorder
6
Speakers
Plasti
chandle
3C
olorchoices
Figure 14.29. House of quality for a boom box
CBS Chapter 14 14-41
QFD ProcessMatrix 1Technical features
Customer
Requirements
Matrix 2Technical
features
Applied technologies
Applied
technologies Matrix 3
Manufacturing processes
Matrix 4Manufacturing
processes
Quality control processes
Matrix 5Quality control
processes
Statistical process control
Matrix 6Statistical processcontrol
Specifications for the finished product
CBS Chapter 14 14-42
Taguchi Loss Function
Figure 14.30. The Taguchi loss function
12 OUNCE AMOUNT0
COSTS
$
L = k(T-x)2 where:
L = loss
k = a constant (t ypically a
measure of intolerance ofdeviation)
T = target
x = observed value
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CBS Chapter 14 14-43
BUSINESS PROCESSES
FIGURE 1.6g. BUSINESS SYSTEM MODEL
INPUT TRANSFORMATION THROUGHPUT
SUPPLIERS
CUSTOMERS
ORGANIZATION
INFORMATION
SYSTEMS
PHYSICALRESOURCES
PEOPLE
MANA
GEME
NTPHILO
SOPH
Y
MANAGEMENT
PLANNING&CONTROL
MANAGEMENTPOLICYGO
ALS&OBJECTIV
ES
STRATEGY
DESIGN
IMPLEMENTATIO
N
PERFO
RMANCE
MEASUREMENTS
THE ENVIRONMENT: GLOBAL COMPETITORS AND
SUPPLIERS, GOVERNMENTS, ECONOMIES,
CONSUMER TASTES, UNIONS, ETC.
Business System Model