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38 views476 pages

Midterm PDF

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omerfaruk200141

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Chapter 1

Quality Improvement in the

Modern Business Environment
1-1. The Meaning of Quality and
Quality Improvement

1-1.1 Dimensions of Quality

1-1.2 Quality Engineering Technology

1-1.1 Dimensions of Quality

• Performance
• Aesthetics
• Reliability
• Features
• Durability
• Perceived Quality
• Serviceability
• Conformance to
standards
Performance
• Will the product perform its intended job?

Reliability
• How often does the product fail?
– How often does this car require repair?
Durability
• How long does the product last?
– The product should perform satisfactorily over a
long period of life
Serviceability
• How easy is it to repair the product?
– If [Link] sends the wrong book, how hard is
it to get this error corrected?
– How long did it take a credit card company to
correct an error in your bill?
Aesthetics
• What does the product look like?
– Do you like the box in which Shoes are packaged?
Features
• What will the product do beyond the basics?
– Added features
– Spreadsheet software package that has built in
statistical analysis features
Perceived quality
• What is the reputation of the company selling
this product?
– Prefer to use a particular airline in which the flight
almost always arrive on time and does not lose or
damage the luggage
Conformance to standards
• Is the product made exactly as the designer
intended?
– How well does the hood fit on a new car?
1-1.1 Dimensions of Quality

• Definitions of Quality

Quality means fitness for use

- quality of design
- quality of conformance
Quality is inversely proportional to
variability.
Quality of design
• Automobile differences
– Materials used in construction
– Specifications of the components
– Reliability of drive train components
– Reliability of accessories
Quality of conformance
• How well does the product conform to the
specifications required by the design?
• Quality of conformance is influenced by
– Choice of manufacturing processes
– Training of the workers
– Supervision of the workers
– Motivation of the workers
– Quality-assurance procedures that were used
Quality is inversely proportional to variability

• Toyota versus Ford

– That transmission noise (or lack of it) is wasted
energy caused by components that don’t fit
precisely
– Imprecise components lead to wear and tear
1-1.1 Dimensions of Quality –
Transmission Example

Your customer does not see the mean of your process, he only sees the
variability around that target that you have not removed
1-1.1 Dimensions of Quality

• Quality Improvement
Quality improvement is the reduction of
variability in processes and products.

Alternatively, quality improvement is also

seen as “waste reduction.”
1-1.2 Quality Engineering
Terminology

Quality Characteristics

• Physical - length, weight, voltage, viscosity

• Sensory - taste, appearance, color
• Time Orientation - reliability, durability,
serviceability
1-1.2 Quality Engineering
Terminology

Quality engineering is the set of operational,

managerial, and engineering activities that a
company uses to ensure that the quality
characteristics of a product are at the
nominal or required levels.
Inherent variability
• No two products are ever identical
– Slight differences in materials
– Slight differences in machine settings
– Slight differences in operators
– Slight differences in ambient temperature during
production
1-1.2 Quality Engineering
Terminology

Two types of data:

Attributes Data - discrete data, often in the

form of counts
Variables Data - continuous measurements
such as length, weight
Both types will be discussed in the course
1-1.2 Quality Engineering
Terminology

Specifications
Quality characteristics being measured are often
compared to standards or specifications.
Desired measure for the quality characteristic
Example: Shaft and bearing
Too loose the assembly will wobble causing
wear
Too tight, and the assembly can not be made,
no clearance
1-1.2 Quality Engineering
Terminology

Specifications
• Nominal or target value
– Desired value for a quality characteristic
1-1.2 Quality Engineering
Terminology

Specifications
• Upper Specification Limit (USL)
• Lower Specification Limit (LSL)
– Largest and smallest allowable values
1-1.2 Quality Engineering
Terminology

Specifications
• Upper Specification Limit (USL)
• Lower Specification Limit (LSL)
– One-sided
• The compression strength of a Coke bottle must be
greater than a given psi value
– Two-sided
• The weight of potato chips in the bag can be
between 7.8 and 8.3 ounces
Design specifications
• Over the wall
– From design to manufacturing
• Cooperatively
– Between design and manufacturing
1-1.2 Quality Engineering
Terminology

• Concurrent Engineering
Team approach to design. Specialists from
manufacturing, quality engineering,
management, etc. work together for product
or process improvement.
1-1.2 Quality Engineering
Terminology

• When a component or product does not

meet specifications, it is considered to be
nonconforming.
• A nonconforming product is considered
defective if it has one or more
nonconformities that may seriously affect
the safe or effective use of the product.
1-1.2 Quality Engineering
Terminology

• A new car is purchased

• A bubble in the paint on the door is noticed
– Nonconformity – yes
– Defective car - no
1-2. A Brief History of Quality
Control and Improvement
(Refer to Table 1-1)
• Frederick Taylor (1875) introduces the
principles of scientific management;
dividing work into tasks with standardized
procedures
• The Gilbreths developed standard times and
motions (1920s)
1-2. A Brief History of Quality
Control and Improvement
(Refer to Table 1-1)
• Walter Shewhart (1924) introduced statistical
control chart concepts and QC begins
• Dodge and Romig (1928), Bell Labs, develop
acceptance sampling as an alternate to 100%
inspection
• During WW II the shells didn’t fit the howitzers
leading to development of MIL-STDs
1-2. A Brief History of Quality
Control and Improvement
(Refer to Table 1-1)
• The American Society for Quality Control
formed in 1946 [now known as the
American Society for Quality (ASQ)]
• 1950s and 1960s saw an increase in
reliability engineering, experimental design,
and statistical quality control
1-2. A Brief History of Quality
Control and Improvement

(Refer to Table 1-1)

• Competition from foreign industries (Japan)
increases during the 1970s and 1980s.
• Statistical methods for quality improvement use
increases in the United States during the 1980s
1.3 Statistical Methods for Quality
Control and Improvement

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 33

Copyright (c) 2009 John Wiley & Sons, Inc.
Statistical Methods
• Statistical process control (SPC)
– Control charts, plus other problem-solving tools
– Useful in monitoring processes, reducing variability
through elimination of assignable causes
– On-line technique

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 34

Copyright (c) 2009 John Wiley & Sons, Inc.
Designed experiments (DOX)
– Experimental design is an approach to systematically
varying the controllable input factors in the process then
determining the effect these factors have on the output
responses.
– Discovering the key factors that influence process
performance
– Process optimization
– Off-line technique

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 35

Copyright (c) 2009 John Wiley & Sons, Inc.
Acceptance Sampling
• Acceptance sampling is the inspection and
classification of a sample of the product
selected at random from a larger batch or lot
and the ultimate decision about disposition of
the lot.

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 36

Copyright (c) 2009 John Wiley & Sons, Inc.
Walter A. Shewart (1891-1967)
• Trained in engineering and physics
• Long career at Bell Labs
• Developed the first control chart
about 1924

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 37

Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 38
Copyright (c) 2009 John Wiley & Sons, Inc.
1.4 Management Aspects of Quality
Improvement
Effective management of quality requires the
execution of three activities:
1. Quality Planning
2. Quality Assurance
3. Quality Control and Improvement

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 41

Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 42
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 43
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 44
Copyright (c) 2009 John Wiley & Sons, Inc.
1-4.1 Quality Philosophy and
Management Strategies

Three Important Leaders

• W. Edwards Deming
- Emphasis on statistical methods in quality
improvement
• Joseph Juran
- Emphasis on managerial role in quality
implementation
• Armand V. Feigenbaum
- Emphasis on organizational structure
1.4.1 Quality Philosophy and Management Strategy

W. Edwards Deming

• Taught engineering, physics in the

1920s, finished PhD in 1928
• Met Walter Shewhart at Western
Electric
• Long career in government
statistics, USDA, Bureau of the
Census
• During WWII, he worked with
US defense contractors, deploying
statistical methods
• Sent to Japan after WWII to work
on the census

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 46

Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 47
Copyright (c) 2009 John Wiley & Sons, Inc.
1. Create a constancy of purpose
• Plan for quality in the long term.
• Resist reacting with short-term solutions.
• Don't just do the same things better – find
better things to do.
• Invest in R&D
• Innovate
2. Adopt a new philosophy
• Eliminate defective products
– It costs as much to produce a defective unit as a
good one
• Put your customers' needs first, rather than
react to competitive pressure – and design
products and services to meet those needs.
3. Don’t rely on inspection
• Inspection only sorts out defectives
– Already have paid to produce them
• Inspection is too late in the process
• It’s also ineffective
• Prevent defectives through process
improvement
4. Don’t award business on price alone

• Consider supplier quality as well

– Give preference to those suppliers that demonstrate
process control and process capability
– Use a single supplier for any one item
– Look at suppliers as your partners in quality
5. Focus on continuous improvement
• Involve the workforce
• Use statistical techniques
6. Invest in training
• Everyone should be trained in the technical
aspects of their job, QC, and process
improvement
• Workers should be encouraged to put this
training to use
7. Practice modern supervision methods

• Help the employees improve the system in

which they work
• Don't simply supervise – provide support and
resources so that each staff member can do his
or her best. Be a coach instead of a policeman
8. Drive out fear
• Create an environment where the workers will
ask questions, report problems, or point out
conditions that are barriers to quality
9. Break down the barriers
• Break down the barriers between the
functional areas of the business
• Build a shared vision.
• Use cross-functional teamwork to build
understanding and reduce adversarial
relationships.
10. Eliminate targets and slogans
• Useless having a plan for the achievement of
the target or goal
• Let people know exactly what you want –
don't make them guess. "Excellence in service"
is short and memorable, but what does it
mean? How is it achieved?
11. Eliminate quotas
• Numerical quotas and work standards often
conflict with quality control
12. Encourage employees to do their job

• Remove the barriers

• Listen to the workers
• The person doing the job knows more about it
than anyone else
13. Have ongoing education and training

• Teach them simple yet powerful statistical

techniques
• Use the basic SPC tools, particularly the
control chart
14. Involve top management
• Management should be advocates for these
points
Deming’s Deadly Diseases
1. Lack of constancy of purpose
2. Emphasis on short-term profits
3. Performance evaluation, merit rating, annual
reviews
4. Mobility of management
5. Running a company on visible figures alone
6. Excessive medical costs for employee health care
7. Excessive costs of warrantees

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 62

Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 63
Copyright (c) 2009 John Wiley & Sons, Inc.
Joseph M. Juran
• Born in Romania (1904-
2008), immigrated to the US
• Worked at Western Electric,
influenced by Walter
Shewhart
• Juran Institute is still an
active organization
promoting the Juran
philosophy and quality
improvement practices

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 66

Copyright (c) 2009 John Wiley & Sons, Inc.
Dr. Joseph Juran
• A founder of SQC
• Co-author of QC Handbook (1957)
• His philosophy is based on management of the
quality function
The Juran Trilogy
1. Planning
2. Control
3. Improvement

• These three processes are interrelated

• Control versus breakthrough
• Project-by-project improvement

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 68

Copyright (c) 2009 John Wiley & Sons, Inc.
Armand Feigenbaum
– Author of Total Quality Control, promoted overall
organizational involvement in quality,
– Three-step approach emphasized quality leadership, quality
technology, and organizational commitment

– Says that QC should be concentrated in a specialized

department
• Conflicts with Deming on this point

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 69

• Total Quality Management (TQM)

• Quality Standards and Registration
– ISO 9000
• Six Sigma
• Just-In-Time, Lean Manufacturing, etc.
TQM
• It is a strategy for implementing and managing
quality improvement activities on an
organization-wide basis
• Began in the early 80s based on the
philosophies of Deming and Juran
• Evolved into wide spectrum of ideas
– Participation in quality groups
– Work culture
– Customer focus
– Supplier quality improvement
– Cross-functional teams concerned with quality
TQM
• A success?
– Moderately
• Why not?
– Not enough concern for reduction of variability
– Ineffective training conducted by HR people
• No knowledge of what is important
– Management not committed
General Reasons for the lack of conspicuous
success of TQM
1. lack of top down, high level of management
commitment and involvement.
2. inadequate use of statistical methods and
insufficient recognition of variability
reduction as a prime objective
3. General as opposed to specific business-
results-oriented objectives
4. Too much emphasis on widespread training
as opposed to focused technical education
More reasons for lack of success
– Zero defects, value engineering, quality is free
• Programs with no emphasis on reducing variability

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 74

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 75

Copyright (c) 2009 John Wiley & Sons, Inc.
• The ISO certification process focuses heavily on quality
assurance, without sufficient weight given to quality planning and
quality control and improvement

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 76

Copyright (c) 2009 John Wiley & Sons, Inc.
ISO 9000
• Quality system oriented
• Say what you do, do what you say
– Much effort devoted to paperwork and
bookkeeping
– Not much to reducing variability and improving
processes
Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 78
Copyright (c) 2009 John Wiley & Sons, Inc.
ISO 9000
• US$40 billion annual business worldwide
– Registrars, auditors, consultants
• Plus, 1000s of hours of internal costs
• Effective?
– Does it reduce variability?
Six Sigma
• Use of statistics & other analytical tools has grown
steadily for over 80 years
– Statistical quality control (origins in 1920, explosive
growth during WW II, 1950s)
– Operations research (1940s)
– FDA (Food and Drug Administration), EPA
(Environmental Protection Agency)in the 1970’s
– TQM (Total Quality Management) movement in the 1980’s
– Reengineering of business processes (late 1980’s)
– Six-Sigma (origins at Motorola in 1987, expanded impact
during 1990s to present)
Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 80
Copyright (c) 2009 John Wiley & Sons, Inc.
Focus of Six Sigma is on Process Improvement
with an Emphasis on Achieving Significant
Business Impact
• A process is an organized sequence of activities that
produces an output that adds value to the organization
• All work is performed in (interconnected) processes
– Easy to see in some situations (manufacturing)
– Harder in others
• Any process can be improved
• An organized approach to improvement is necessary
• The process focus is essential to Six Sigma

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 81

Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 82
Copyright (c) 2009 John Wiley & Sons, Inc.
Why “Quality Improvement” is Important:
A Simple Example
• A visit to a fast-food store: Hamburger (bun, meat, special sauce,
cheese, pickle, onion, lettuce, tomato), fries, and drink.

• This product has 10 components - is 99% good okay?

P{Single meal good}  (0.99)10  0.9044

Family of four, once a month: P{All meals good}  (0.9044) 4  0.6690
P{All visits during the year good}  (0.6690)12  0.0080

P{single meal good}  (0.999)10  0.9900, P{Monthly visit good}  (0.99)4  0.9607
P{All visits in the year good}  (0.9607)12  0.6186

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 83

Copyright (c) 2009 John Wiley & Sons, Inc.
Six Sigma Focus
• Initially in manufacturing
• Commercial applications
– Banking
– Finance
– Public sector
– Services
• DFSS – Design for Six Sigma
– New process design
– New product design (engineering)

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 84

Copyright (c) 2009 John Wiley & Sons, Inc.
Six Sigma
• A disciplined and analytical approach to process and product
improvement
• Specialized roles for people; Champions, Master Black belts,
Black Belts, Green Belts
• BBs and MBBs have responsibility (project definition,
leadership, training/mentoring, team facilitation)
• Involves a five-step process (DMAIC) :
– Define
– Measure
– Analyze
– Improve
– Control

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 85

Copyright (c) 2009 John Wiley & Sons, Inc.
What Makes it Work?
• Successful implementations characterized by:
– Committed leadership
– Use of top talent
– Supporting infrastructure
• Formal project selection process
• Formal project review process
• Dedicated resources
• Financial system integration
• Project-by-project improvement strategy
(borrowed from Juran)
Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 86
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 87
Copyright (c) 2009 John Wiley & Sons, Inc.
Design for Six Sigma (DFSS)
Taking variability reduction upstream from manufacturing (or
operational six sigma) into product design and development
Every design decision is a business decision

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 88

Copyright (c) 2009 John Wiley & Sons, Inc.
DFSS Matches Customer Needs
with Capability
• Mean and variability affects product performance and cost
– Designers can predict costs and yields in the design phase
• Consider mean and variability in the design phase
– Establish top level mean, variability and failure rate targets for
a design
– Rationally allocate mean, variability, and failure rate targets to
subsystem and component levels
– Match requirements against process capability and identify gaps
– Close gaps to optimize a producible design
– Identify variability drivers and optimize designs or make designs robust
to variability
• Process capability impact design decisions
DFSS enhances product design methods.
Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 89
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 90
Copyright (c) 2009 John Wiley & Sons, Inc.
DMAIC Solves Problems by Using
Six Sigma Tools
• DMAIC is a problem solving methodology
• Closely related to the Shewhart (Plan-Do-
Check-Act) Cycle
• Use this method to solve problems:
– Define problems in processes
– Measure performance
– Analyze causes of problems
– Improve processes  remove variations and non-
value-added activities
– Control processes so problems do not recur
Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 91
Copyright (c) 2009 John Wiley & Sons, Inc. 11
Lean Systems
• Focuses on elimination of waste
– Long cycle times
– Long queues – in-process inventory
– Inadequate throughput
– Rework
– Non-value-added work activities
• Makes use of many of the tools of operations
research and industrial engineering

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 92

Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 93
Copyright (c) 2009 John Wiley & Sons, Inc.
Little’s Law

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 94

Copyright (c) 2009 John Wiley & Sons, Inc.
Lean Focuses on Waste Elimination
Definition
• A set of methods and tools used to eliminate waste in
a process
• Lean helps identify anything not absolutely required
to deliver a quality product on time.

Benefits of using Lean

• Lean methods help reduce inventory, lead time, and
cost
• Lean methods increase productivity, quality, on time
delivery, capacity, and sales

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 95

Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 96
Copyright (c) 2009 John Wiley & Sons, Inc.
The supply chain often represents a significant component of the total
value of the organization’s products or services

Failures in the supply chain have potentially huge impact on the

organization

Chapter 1 Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 97

Copyright (c) 2013 John Wiley & Sons, Inc.
Key Supply Chain Processes
• Service management
• Demand management
• Order fulfillment
• Quality
• Manufacturing flow management
• Supplier relationship management
• Logistics and distribution
• Returns management
Chapter 1 Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 98
Copyright (c) 2013 John Wiley & Sons, Inc.
Key Supply Chain Management (SCM) Activities:

• Supplier qualification or certification

• Supplier development
• Supplier audits

Chapter 1 Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 99

Chapter 1 Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 100

Chapter 1 Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 101

Chapter 1 Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 102

• Concept of strict liability

1. Responsibility of both manufacturer and
seller/distributor
2. Advertising must be supported by valid data

Chapter 1 Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 103

•A strategic management process, focused along the

eight dimension of quality

•Suppliers and supply chain management must be

involved
•Must focus on all three components: Quality Planning,
Quality Assurance, and Quality Control and Improvement

Chapter 1 Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 104

Copyright (c) 2013 John Wiley & Sons, Inc.
Chapter 1 Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 105
Copyright (c) 2013 John Wiley & Sons, Inc.
Learning Objectives

Chapter 1 Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 106

• Effective quality improvement can be

instrumental in increasing productivity and
reducing cost.
• The cost of achieving quality improvements
and increased productivity is often
negligible.

Introduction to Statistical
Quality Control, 4th Edition
Quality Costs

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 108

Copyright (c) 2009 John Wiley & Sons, Inc.
Legal Aspects of Quality
• Product liability exposure
– As the production volume increases, the liability
exposure increases.
• Concept of strict liability
1. Responsibility of both manufacturer and
seller/distributor
2. Advertising must be supported by valid data

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 109

•A strategic management process, focused along the

eight dimension of quality

•Suppliers and supply chain management must be

involved
•Must focus on all three components: Quality Planning,
Quality Assurance, and Quality Control and Improvement

Chapter 1 Introduction to Statistical Quality Control, 6 th Edition by Douglas C. Montgomery. 110

Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 2 Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 1
Copyright (c) 2013 John Wiley & Sons, Inc.
Learning Objectives

Chapter 2 Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 2

Copyright (c) 2013 John Wiley & Sons, Inc.
Six Sigma
• Use of statistics & other analytical tools has grown
steadily for over 80 years
– Statistical quality control (origins in 1920, explosive
growth during WW II, 1950s)
– Operations research (1940s)
– FDA (Food and Drug Administration), EPA
(Environmental Protection Agency)in the 1970’s
– TQM (Total Quality Management) movement in the 1980’s
– Reengineering of business processes (late 1980’s)
– Six-Sigma (origins at Motorola in 1987, expanded impact
during 1990s to present)
Chapter 1 3 Introduction to Statistical
Quality Control, 6th Edition by
Focus of Six Sigma is on Process Improvement
with an Emphasis on Achieving Significant
Business Impact
• A process is an organized sequence of activities that
produces an output that adds value to the organization
• All work is performed in (interconnected) processes
– Easy to see in some situations (manufacturing)
– Harder in others
• Any process can be improved
• An organized approach to improvement is necessary
• The process focus is essential to Six Sigma

Chapter 1 4 Introduction to Statistical

Quality Control, 6th Edition by
Chapter 1 5 Introduction to Statistical
Quality Control, 6th Edition by
Why “Quality Improvement” is Important:
A Simple Example
• A visit to a fast-food store: Hamburger (bun, meat, special sauce,
cheese, pickle, onion, lettuce, tomato), fries, and drink.

• This product has 10 components - is 99% good okay?

P{Single meal good}  (0.99)10  0.9044

Family of four, once a month: P{All meals good}  (0.9044) 4  0.6690
P{All visits during the year good}  (0.6690)12  0.0080

P{single meal good}  (0.999)10  0.9900, P{Monthly visit good}  (0.99)4  0.9607
P{All visits in the year good}  (0.9607)12  0.6186

Chapter 1 6 Introduction to Statistical

Quality Control, 6th Edition by
Six Sigma Focus
• Initially in manufacturing
• Commercial applications
– Banking
– Finance
– Public sector
– Services
• DFSS – Design for Six Sigma
– New process design
– New product design (engineering)

Chapter 1 7 Introduction to Statistical

Quality Control, 6th Edition by
Six Sigma
• A disciplined and analytical approach to process and product
improvement
• Specialized roles for people; Champions, Master Black belts,
Black Belts, Green Belts
• BBs and MBBs have responsibility (project definition,
leadership, training/mentoring, team facilitation)
• Involves a five-step process (DMAIC) :
– Define
– Measure
– Analyze
– Improve
– Control

Chapter 1 8 Introduction to Statistical

Quality Control, 6th Edition by
What Makes it Work?
• Successful implementations characterized by:
– Committed leadership
– Use of top talent
– Supporting infrastructure
• Formal project selection process
• Formal project review process
• Dedicated resources
• Financial system integration
• Project-by-project improvement strategy
(borrowed from Juran)
Chapter 1 9 Introduction to Statistical
Quality Control, 6th Edition by
Chapter 1 10 Introduction to Statistical
Quality Control, 6th Edition by
Design for Six Sigma (DFSS)
Taking variability reduction upstream from manufacturing (or
operational six sigma) into product design and development
Every design decision is a business decision

Chapter 1 11 Introduction to Statistical

Quality Control, 6th Edition by
DFSS Matches Customer Needs
with Capability
• Mean and variability affects product performance and cost
– Designers can predict costs and yields in the design phase
• Consider mean and variability in the design phase
– Establish top level mean, variability and failure rate targets for
a design
– Rationally allocate mean, variability, and failure rate targets to
subsystem and component levels
– Match requirements against process capability and identify gaps
– Close gaps to optimize a producible design
– Identify variability drivers and optimize designs or make designs robust
to variability
• Process capability impact design decisions
DFSS enhances product design methods.
Chapter 1 12 Introduction to Statistical
Quality Control, 6th Edition by
Chapter 1 13 Introduction to Statistical
Quality Control, 6th Edition by
DMAIC Solves Problems by Using
Six Sigma Tools
• DMAIC is a problem solving methodology
• Closely related to the Shewhart (Plan-Do-
Check-Act) Cycle
• Use this method to solve problems:
– Define problems in processes
– Measure performance
– Analyze causes of problems
– Improve processes  remove variations and non-
value-added activities
– Control processes so problems do not recur
Chapter 1 14 Introduction to Statistical
Quality Control, 6th Edition by 11
DMAIC
• DMAIC is a structure problem-solving technique
consisting of the following steps:
– Define
– Measure
– Analyze
– Improve
– Control
• DMAIC is usually associated with six sigma, but it
can be used with any business or process
improvement effort
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Projects
• Essential part of DMAIC
• Breakthrough opportunity
• Financial systems integration
• Value opportunity of a project must be clear
• Project selection
• Project management

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If the improvement goal is 50%, then x = 11 years, and if it’s
75% then x = 5 years.
Must focus on projects that have high impact

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A process map or value stream map may also be
prepared. These should be completed by at least
the end of the Measure step.

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2.3 The Measure Step
• Purpose is to evaluate and determine the present
process state
• Identify key process input variables (KPIV) and key
process output variables (KPOV)
• Data – from historical records, from sampling, from
observational studies
• Histograms, box plots, Pareto charts, scatter
diagrams, stem-and-leaf diagrams may all be useful
• In some businesses, the measurement system must be
developed
• Measurement systems capability may be important

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2.4 The Analyze Step
• Determine cause-and-effect relationships
• Sources of variability – common cause versus
assignable cause
• Tools – control charts, hypothesis testing,
confidence intervals, regression models, failure
modes and effects analysis
• Discrete event simulation

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2.5 The Improve Step
• Process redesign to reduce bottlenecks
• Mistake-proofing (poka-yoke)
• Statistical tools – particularly designed
experiments
• DOX can be applied to either the physical
process or a computer model of the process
• Pilot test the solution to confirm that it will
solve the problem
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Figure: Process Flow Diagram

28
Figure: (a) Current (b) Improved Process
Flow Diagram

Copyright © 2019 by The McGraw-Hill Companies, Inc. All rights reserved. 29

Şekil 5.7: Reengineered (Improved)
Process Flow Diagram

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The Improve Tollgate

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2.6 The Control Step
• Complete all remaining work on project
• Provide the process owner with a process
control plan
• Training documents (if appropriate) should be
provided
• Methods and metrics for future audits
• Transition plan to the new process might
include a validation step
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The Control Tollgate

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Chapter Case Studies
• Litigation documents
• Improving on-time delivery
• Improving service quality in a bank

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Learning Objectives

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Easy to find percentiles of the data; see page 69

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Also called a run chart

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Group values of the variable into bins, then count the number
of observations that fall into each bin
Plot frequency (or relative frequency) versus the values of
the variable
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Additional Minitab Graphs

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Numerical Summary of Data
Sample average:

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The Standard Deviation

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Sometimes called a Sometimes called a
probability mass function probability density function

Will see many examples in the text

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The mean is the point at which the distribution exactly “balances”.

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The mean is not necessarily the 50th percentile of the distribution
(that’s the median)
The mean is not necessarily the most likely value of the random
variable (that’s the mode)

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3.2 Important Discrete Distributions
The Hypergeometric Distribution

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Discrete distributions are used frequently in designing acceptance
sampling plans – see Chapter 15

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The Binomial Distribution

Basis is in Bernoulli trials

The random variable x is the number of successes out of n

Bernoulli trials with constant probability of success p on each trial
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Binomial Distributions

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The Poisson Distribution

Frequently used as a model for count data

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The Negative Binomial Distribution

The random variable x is the number of Bernoulli trials upon

which the rth success occurs
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•The negative binomial distribution is also
sometimes called the Pascal distribution
•When r = 1 the negative binomial distribution is
known as the geometric distribution
• The geometric distribution has many useful
applications in SQC

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The Central Limit Theorem

Practical interpretation – the sum of independent random

variables is approximately normally distributed regardless of
the distribution of each individual random variable in the sum

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The Exponential Distribution

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When r is an integer, the gamma distribution is the result of summing r
independently and identically exponential random variables each with
parameter λ.
The gamma distribution has many applications in reliability engineering.

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• Determining if a sample of data might reasonably be

assumed to come from a specific distribution
• Probability plots are available for various
distributions
• Easy to construct with computer software
(MINITAB)
• Subjective interpretation

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The Normal Probability Plot on Standard Graph Paper

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Other Probability Plots
• What is a reasonable choice as a probability model
for these data?

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3.5 Some Useful Approximations

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Learning Objectives

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Learning Objectives

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4.1 Statistics and Sampling Distributions
• Statistical inference is concerned with drawing
conclusions about populations (or processes) based
on sample data from that system
• Random sample – a sample that is selected so that the
observations are independent – a random sample has
the property that it has the same probability of
selection as any other sample.
• Statistic – any function of the observations in a
sample that doesn't contain unknown parameters
• The sample mean, the sample variance, and the
sample standard deviation are all statistics

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Sampling Distributions
• A statistic is a random variable, because a
different sample with produce a different
observed value of the statistic
• Every statistic has a probability distribution
• The probability distribution of a statistic is
called a sampling distribution

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Sampling from a Bernoulli Distribution

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• Distributions are described by their parameters

• Parameters are generally unknown and must be
estimated
• Point estimator – a statistic that a single
numerical value that is the estimate of the
parameter
• Examples, page 110 & 111

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Relative efficiency of the range:

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• Statistical inference = decision making

• Hypothesis testing
– Null hypothesis, H0
– Alternative hypothesis, H1
• Confidence intervals
• These two techniques are closely related

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4.3.1 Inference on the Mean of a Population, Variance Known

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Minitab
output

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Upper and
lower
confidence
bounds

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4.3.2 P-Values

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4.3.3 Inference on the Mean of a Normal
Distribution, Variance Unknown

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P-values for t-Tests
• The tables of the standard normal distribution can
give exact P-values for the Z test for values of Z to
two decimals
• The t-table only has a selection of probabilities (see
the column headings in the table)
• Unless the value of the test statistic exactly matches a
value in the table, only an approximate P-value can
be obtained
• See text, page 124, for an example
• P-values can also be obtained from Minitab by using
the “Probability Distribution” function “Calc” menu
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4.3.4 Inference on the Variance of a Normal Distribution

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4.3.6 Type II Error and Sample Size

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Minitab can perform sample size and power calculations. From
Example 4.7:

From Example 4.3:

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4.4 Statistical Inference for Two Samples

Comparing means, comparing variances, comparing proportions

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Confidence Interval on the Difference in Means

This is a two-sided CI. The one-sided confidence

bounds would be found by using only one of the
limits in Equation (4.49) with α/2 replaced by α.

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4.4.2 Inference on the Difference in Means of
Two Normal Distributions, Variances Unknown

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Confidence Intervals – Case 1:

Case 2:

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Paired Data:

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The two-sided CI is:

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4.5 What if There Are More Than Two Populations?
The Analysis of Variance

Example: Does changing the hardwood concentration in the pulp affect

the mean tensile strength of paper?

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The Analysis of Variance (ANOVA)

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The ANOVA is based on the following partitioning of the total sum of
squares (which measures the total variability in the sample data):

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Computing Formulas:

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If F0 is greater than the critical value Fα,a-1, a(n-1) then the null hypothesis of
equal treatment means is rejected. A P-value approach can also be used.
The P-value would be the probability above F0 in the Fa-1, a(n-1) distribution.

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Graphical comparison of individual means

20% hardwood produces higher mean strength than the

others; 5% hardwood produces lower strength; 10% and
15% hardwood don’t differ but give lower strength than 20%.

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eij  yij  yˆij  yij  yi .

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Models that are not linear in the regressors can still be fit using linear
regression techniques, so long as they are linear in the parameters.
Important cases include models with interaction terms and polynomials.

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The method of least squares:

Least
squares
normal
equations

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The test procedure is to calculate the test statistic

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See Table 4.12 (slide
91) for the t-tests on
the individual
regressors in the
consumer finance
model – both variables
are significant

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Other Diagnostic Tools
• Standardized and Studentized residuals
• R-student – an outlier diagnostic
• The PRESS statistic
• R2 for prediction based on PRESS – a measure
of how well the model will predict new data
• Measure of leverage – hat diagonals
• Cook’s distance – a measure of influence

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Learning Objectives

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Learning Objectives

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• A process is operating with only chance causes of variation present is said to

be in statistical control.
• A process that is operating in the presence of assignable causes is said to be
out of control.

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• A control chart contains

– A center line
– An upper control limit
– A lower control limit
• A point that plots within the
control limits indicates the
process is in control
– No action is necessary
• A point that plots outside the
control limits is evidence that the
process is out of control
– Investigation and corrective
action are required to find and
eliminate assignable cause(s)
• There is a close connection
between control charts and
hypothesis testing

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• Important quality characteristic in hard bake is resist flow width

• Process is monitored by average flow width
– Sample of 5 wafers
– Process mean is 1.5 microns
– Process standard deviation is 0.15 microns
• Note that all plotted points fall inside the control limits
– Process is considered to be in statistical control

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Out-Of-Control-Action Plans

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More Basic Principles
• Control charts may be used to estimate process
parameters, which are used to determine capability
• Two general types of control charts
– Variables (Chapter 6)
• Continuous scale of measurement
• Quality characteristic described by central tendency and a measure
of variability
– Attributes (Chapter 7)
• Conforming/nonconforming
• Counts
• Control chart design encompasses selection of
sample size, control limits, and sampling frequency

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Types of Process Variability
• Stationary and uncorrelated  data vary around a fixed mean in a stable
or predictable manner
• Stationary and autocorrelated  successive observations are dependent
with tendency to move in long runs on either side of mean
• Nonstationary  process drifts without any sense of a stable or fixed mean

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Reasons for Popularity
of Control Charts
1. Control charts are a proven technique for improving
productivity.
2. Control charts are effective in defect prevention.
3. Control charts prevent unnecessary process
adjustment.
4. Control charts provide diagnostic information.
5. Control charts provide information about process
capability.

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• 3-Sigma Control Limits
– Probability of type I error is 0.0027
• Probability Limits
– Type I error probability is chosen directly
– For example, 0.001 gives 3.09-sigma control limits
• Warning Limits
– Typically selected as 2-sigma limits

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5.3.4 Rational Subgroups
• The rational subgroup concept means that subgroups or samples
should be selected so that if assignable causes are present, chance for
differences between subgroups will be maximized, while chance for
difference due to assignable causes within a subgroup will be
minimized.

• Two general approaches for constructing rational subgroups:

1. Sample consists of units produced at the same time  consecutive units
– Primary purpose is to detect process shifts
2. Sample consists of units that are representative of all units produced
since last sample  random sample of all process output over
sampling interval
– Often used to make decisions about acceptance of product
– Effective at detecting shifts to out-of-control state and back into in-control
state between samples
– Care must be taken because we can often make any process appear to be
in statistical control just by stretching out the interval between
observations in the sample.

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• Pattern is very nonrandom in appearance

• 19 of 25 points plot below the center line, while only 6 plot
above
• Following 4th point, 5 points in a row increase in
magnitude, a run up
• There is also an unusually long run down beginning with
18th point
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The Cyclic Pattern

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5.3.6 Discussion of the Sensitizing Rules

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4.3.7 Phase I and Phase II of Control Chart Application

• Phase I is a retrospective analysis of process

data to construct trial control limits
– Charts are effective at detecting large, sustained
shifts in process parameters, outliers, measurement
errors, data entry errors, etc.
– Facilitates identification and removal of assignable
causes
• In phase II, the control chart is used to monitor
the process
– Process is assumed to be reasonably stable
– Emphasis is on process monitoring, not on bringing
an unruly process into control

Chapter 5 Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 31

1. Histogram or stem-and-leaf plot

2. Check sheet
3. Pareto chart
4. Cause-and-effect diagram
5. Defect concentration diagram
6. Scatter diagram
7. Control chart

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Cause-and-Effect Diagram

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Defect Concentration Diagram

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5.6 An Application of SPC
• Improving quality in a copper plating operation at a
printed circuit board fabrication plant
• The DMAIC process was used
• During the define step, the team decided to focus on
reducing flow time through the process
• During the measures step, controller downtown was
recognized as a major factor in excessive flow time

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5.7 Applications of SPC and Quality Improvement
Tools in Transactional and Service Businesses
• Nonmanufacturing applications often do not differ
substantially from industrial applications, but
sometimes require ingenuity
1. Most nonmanufacturing operations do not have a natural
measurement system
2. The observability of the process may be fairly low
3. People are usually involved in transactional and services
processes, and variability between people may be an
important part of the problem
• Flow charts, operation process charts and value
stream mapping are particularly useful in developing
process definition and process understanding. This is
sometimes called process mapping.
– Used to identify value-added versus nonvalue-added
activity
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Value Stream Mapping

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Transactional and Service Businesses

• All of the quality improvement tools can be used,

including designed experiments
• Sometimes a simulation model if the process is useful
• More likely to encounter attribute data
• Lots of the continuous data may not be normally
distributed (such as cycle time)
• Non-normality isn’t a big problem, because many
techniques are relatively insensitive to the normality
assumption
• Transformations and nonparametric methods could be
used if the problem is severe enough

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Consider a regression model on y = cycle time to process a claim in an
insurance company:

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Chapter 6 Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 1
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Subgroup Data with Unknown  and 
4.2 Point Estimation of Process Parameters

• Distributions are described by their parameters

• Parameters are generally unknown and must be
estimated
• Point estimator – a statistic that a single
numerical value that is the estimate of the
parameter
• Examples, page 110 & 111

Chapter 4 5 Statistical Quality Control, 7th

Edition by Douglas C.
Properties of Point Estimators

Chapter 4 6 Statistical Quality Control, 7th

Edition by Douglas C.
Chapter 4 7 Statistical Quality Control, 7th
Edition by Douglas C.
Relative efficiency of the range:

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Edition by Douglas C.
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Phase I Application of x and R Charts
Eqns 6.4 and 6.5 are trial control limits
– Determined from m initial samples
• Typically 20-25 subgroups of size n between 3 and 5
– Any out-of-control points should be examined for assignable causes
• If assignable causes are found, discard points from calculations and revise the trial
control limits
• Continue examination until all points plot in control
• Adopt resulting trial control limits for use
• If no assignable cause is found, there are two options
1. Eliminate point as if an assignable cause were found and revise limits
2. Retain point and consider limits appropriate for control
– If there are many out-of-control points they should be examined for patterns that
may identify underlying process problems

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Example 6.1 The Hard Bake Process
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Revision of Control Limits
and Center Lines
• Effective use of control charts requires periodic
review and revision of control limits and center lines
• Sometimes users replace the center line on the x chart
with a target value
• When R chart is out of control, out-of-control points
are often eliminated to recompute a revised value of R
which is used to determine new limits and center line
on R chart and new limits on x chart

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Phase II Operation of Charts
• Use of control chart for monitoring future
production, once a set of reliable limits are
established, is called phase II of control chart
usage (Figure 6.4)
• A run chart showing individuals observations
in each sample, called a tolerance chart or
tier diagram (Figure 6.5), may reveal patterns
or unusual observations in the data

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Control vs. Specification Limits
• Control limits are derived
from natural process
variability, or the natural
tolerance limits of a process

• Specification limits are

determined externally, for
example by customers or
designers

• There is no mathematical or
statistical relationship
between the control limits
and the specification limits

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Rational Subgroups
• x charts monitor between-sample variability
• R charts measure within-sample variability
• Standard deviation estimate of  used to construct
control limits is calculated from within-sample
variability
• It is not correct to estimate  using

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Guidelines for Control Chart Design
• Control chart design requires specification of sample size,
control limit width, and sampling frequency
– Exact solution requires detailed information on statistical
characteristics as well as economic factors
– The problem of choosing sample size and sampling frequency is one of
allocating sampling effort
• For x chart, choose as small a sample size is consistent with
magnitude of process shift one is trying to detect. For
moderate to large shifts, relatively small samples are effective.
For small shifts, larger samples are needed.
• For small samples, R chart is relatively insensitive to changes
in process standard deviation. For larger samples (n > 10 or
12), s or s2 charts are better choices.

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6.2.4 Interpretation of Control Charts

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6.2.5 The Effect of Non-normality
• An assumption in performance properties is that the underlying
distribution of quality characteristic is normal
– If underlying distribution is not normal, sampling distributions can be
derived and exact probability limits obtained
• Burr (1967) notes the usual normal theory control limits are
very robust to normality assumption
• Schilling and Nelson (1976) indicate that in most cases,
samples of size 4 or 5 are sufficient to ensure reasonable
robustness to normality assumption for xchart
• Sampling distribution of R is not symmetric, thus symmetric 3-
sigma limits are an approximation and -risk is not 0.0027. R
chart is more sensitive to departures from normality than x
chart.
• Assumptions of normality and independence are not a primary
concern in phase I

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Development of the control limits:

Thus produces the control limits in equation (6.27)

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Average Run Lengths
• Crowder (1987b) showed that
ARL0 of combined individuals
and moving-range chart with
conventional 3-sigma limits is
generally much less than ARL0
(= 370) of standard Shewhart
control chart

• Ability of individuals chart to

detect small shifts is very poor
– Rather than narrowing the 3-
sigma limits, correct approach to
detecting small shifts is a
cumulative-sum or exponentially
weighted moving-average control
chart (Chapter 9)

Chapter 6 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 60

• Borror, Montgomery, and Runger (1999) report that the in-control ARL is
dramatically affected by nonnormal data
• One approach for nonnormal data is to determine control limits for individuals
control chart based on percentiles of correct underlying distribution
– Requires at least 100 and preferably 200 observations
– Transformations can also be useful

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Learning Objectives

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Design of the Fraction Nonconforming Chart

• Three parameters must be specified

1. The sample size
2. The frequency of sampling
3. The width of the control limits
• Common to base chart on 100% inspection
of all process output over time
• Rational subgroups may also play role in
determining sampling frequency

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• The np Control chart – based on the number
nonconforming

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Average sample size approach.

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Average run lengths (ARLs)

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7.3 Control Charts for Nonconformities (Defects)

A nonconforming unit does not satisfy one or more of the specifications

Each point where a specification is not satisfied is a defect or
nonconformity
Nonconforming units contain at least one nonconformity
However, units with defects are not necessarily nonconforming
It is often useful to work directly with the number of defects

Chapter 7 Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 38

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