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INTRODUCTION TO OPERATIONS
MANAGEMENT– MBA 2023
Session 04 – Statistical Process Control
Learning Objectives
• Explain the need for quality control
• List and briefly explain the elements of the
control process
• Explain how control charts are used to
monitor a process, and the concepts that
underlie their use
• Use and interpret control charts
• Assess process capability
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What is Quality Control?
○ A process that evaluates output relative to a standard
and takes corrective action when output doesn’t meet
standards
■ If results are acceptable no further action is
required
■ Unacceptable results call for correction action
○ Inspection alone is not is generally not sufficient to
achieve a reasonable level of quality
■ Most organization rely upon some inspection and a
great deal of process control to achieve an
acceptable level of quality
Statistical Process Control (SPC)
● Quality control seeks
○ Quality of Conformance
■ A product or service conforms to specifications
● A tool used to help in this process:
○ SPC
■ Statistical evaluation of the output of a process
to determine if it is acceptable
■ Helps us to decide if a process is “in control” or
if corrective action is needed
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Process Variability
● Two basic questions: concerning
variability:
Q1. Issue of Process Control
■ Are the variations random? If nonrandom
variation is present, the process is said to be
unstable.
Q2. Issue of Process Capability
■ Given a stable process, is the inherent variability
of the process within a range that conforms to
performance criteria?
Process Variability (Cont’d)
● Variation
○ Random (common cause) variation:
■ Natural variation in the output of a process, created
by countless minor factors
○ Assignable (special cause) variation:
■ A variation whose cause can be identified.
■ A nonrandom variation
● Managements first job is to get rid of special cause
variation
● Once a process is “in control,” the only way to improve
performance is to reduce common cause variation
Examples?
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The Control Process
● Sampling and corrective action are only a part of the
control process
● Steps required for effective control:
○ Define: What is to be controlled?
○ Measure: How will measurement be accomplished?
○ Compare: There must be a standard of comparison
○ Evaluate: Establish a definition of out of control
○ Correct: Uncover the cause of nonrandom variability and fix it
○ Monitor: Verify that the problem has been eliminated
The Voice of the Process: Control Charts
● Control Chart
○ A time ordered plot of representative sample statistics obtained from an
ongoing process (e.g. sample means), used to distinguish between
random and nonrandom variability
○ Control limits
■ The dividing lines between random and nonrandom deviations from
the mean of the distribution
■ Upper and lower control limits define the range of acceptable
variation
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Type I & Type II Error
● Type I error
○Concluding a process is not in control when it actually is.
○ The probability of rejecting the null hypothesis when the null
hypothesis is true.
○ Manufacturer’s Risk
● • Type II error
○ Concluding a process is in control when it is not.
○ The probability of failing to reject the null hypothesis when the null
hypothesis is false.
○ Consumer’s Risk
Two types of risks are involved in controlling quality. These risks have been given names to
identify the injured party. If a process is deemed to be out of control when it in fact is performing
correctly, a Type I error has occurred, which is the producer’s risk. If a process is deemed to be
functioning properly when it in fact is out of control, a Type II error has occurred, which is the
consumer’s risk.
Types of Control Chart
● Control charts for means fall into two categories based on the
type of performance measure. Variable control charts (X-bar
chart) and (R-chart) record measurements that permit fractional
values, such as length, weight, or time. An attribute control chart
(p-chart) records discrete data, such as the number of defects or
errors as a percentage
● The purpose of the X-Bar chart is to detect changes in the
process mean of a continuous variable (e.g., ambulance response
time)
● The R-chart for the continuous variable measures the process
Dispersion
● The R-chart is frequently constructed prior to determining the X-
bar chart in order to ensure that the process variability is under
control
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Control Chart for Mean: X̅ Chart
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Control Chart for Range: R Chart
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Control Chart Factors
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Using both Mean & Range Chart
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P-Chart
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P-Chart: Example
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c-Chart
● Use only when the number of occurrences per unit of
measure can be counted; non-occurrences cannot be
counted.
○ Scratches, chips, dents, or errors per item
○ Cracks or faults per unit of distance
○ Breaks or Tears per unit of area
○ Bacteria or pollutants per unit of volume
○ Calls, complaints, failures per unit of time
UCL c c z c
LCLc c z c
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c-Chart: Example
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Process Capability
● The ability of a process to consistently produce a
good or deliver a service with a low probability of
generating a defect
● Specification limits – range of variation that is
considered acceptable by the designer or
customer
● Process limits – range of variation that a process
is able to maintain with a high degree of certainty
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Process Capability
● The ability of a process to consistently produce a
good or deliver a service with a low probability of
generating a defect
● Specification limits – range of variation that is
considered acceptable by the designer or
customer
● Process limits – range of variation that a process
is able to maintain with a high degree of certainty
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Process Capability
● The ability of a process to consistently produce a
good or deliver a service with a low probability of
generating a defect
● Specification limits – range of variation that is
considered acceptable by the designer or
customer
● Process limits – range of variation that a process
is able to maintain with a high degree of certainty
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Process Capability (Cont’d)
Process control limits exceed specification limits – process is not
capable of meeting requirements
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Process Capability (Cont’d)
Specification control limits exceed process limits (for improved process) – process is
capable of meeting requirements
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Process Capability Index – Process Centered Around
the Mean
UTL - LTL
Cp
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where
UTL upper tolerance (specification) limit
LTL lower tolerance(specification) limit
> 1.33 for the process to be capable
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Process Capability Index – Process NOT Centered
Around the Mean
C pk minC pu , C pl
UTL x x LTL
min ,
3 3
> 1.33 for the process to be capable
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In Class Problems…
● Stevenson (12th Edition) page
444 - 447
● Problems 2, 3, 4 & 6
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