Chapter 6 - Statistical Quality

Control

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Learning Objectives
 Describe Categories of SQC
 Using statistical tools in measuring quality characteristics
 Identify and describe causes of variation
 Describe the use of control charts
 Identify the differences between x-bar, R-, p-, and
c-charts
 Explain process capability and process capability index
 Explain the term six-sigma
 Explain acceptance sampling and the use of OC curves
 Describe the inherent challenges in measuring quality in service
organizations
Three SQC Categories
 Statistical quality control (SQC) is the term used to describe
the set of statistical tools used by quality professionals
 SQC Encompasses three broad categories of:
 Descriptive statistics
 e.g. the mean, standard deviation, and range
 Acceptance sampling used to randomly inspect a batch of goods
to determine acceptance/rejection
 Does not help to catch in-process problems
 Statistical process control (SPC)
 Involves inspecting the output from a process
 Quality characteristics are measured and charted
 Helpful in identifying in-process variations
Sources of Variation
 Variation exists in all processes.
 Variation can be categorized as either;
 Common or Random causes of variation, or
 Random causes that we cannot identify
 Unavoidable
 e.g. slight differences in process variables like diameter, weight, service
time, temperature

 Assignable causes of variation

 Causes can be identified and eliminated
 e.g. poor employee training, worn tool, machine needing repair
Traditional Statistical Tools
The Mean- measure of n

x


central tendency i
x i 1

n
 The Range- difference
between largest/smallest
observations in a set of data

 x 
n
 Standard Deviation 2
measures the amount of i X
data dispersion around mean σ i 1

n 1
Distribution of Data
 Normal distributions  Skewed distribution
 SPC Methods-Control Charts
 Control Charts show sample data plotted on a graph with CL,
UCL, and LCL
 Control chart for variables are used to monitor characteristics
that can be measured, e.g. length, weight, diameter, time
 Control charts for attributes are used to monitor characteristics
that have discrete values and can be counted, e.g. % defective,
number of flaws in a shirt, number of broken eggs in a box
 Setting Control Limits
 Percentage of values  Control limits balance
under normal curve risks like Type I error
 Control Charts for Variables
 Use x-bar and R-bar
charts together
 Used to monitor
different variables
 X-bar & R-bar Charts
reveal different
problems
 In statistical control on
one chart, out of control
on the other chart? OK?
 Constructing a X-bar Chart: A quality control inspector at the Cocoa
Fizz soft drink company has taken three samples with four observations
each of the volume of bottles filled. If the standard deviation of the
bottling operation is .2 ounces, use the below data to develop control
charts with limits of 3 standard deviations for the 16 oz. bottling operation.

 Center line and control

Time 1 Time 2 Time 3
limit formulas
Observation 1 15.8 16.1 16.0

Observation 2 16.0 16.0 15.9 x 1  x 2  ...x n σ

x , σx 
Observation 3 15.8 15.8 15.9 k n
where (k) is the # of sample means and (n)
Observation 4 15.9 15.9 15.8
is the # of observations w/in each sample
Sample 15.875 15.975 15.9
UCL x  x  zσ x
means (X-bar)
Sample 0.2 0.3 0.2 LCL x  x  zσ x
ranges (R)
Solution and Control Chart (x-bar)
 Center line (x-double bar):

15.875  15.975  15.9

x  15.92
3
 Control limits for±3σ limits:

 .2 
UCL x  x  zσ x  15.92  3   16.22
 4
 .2 
LCL x  x  zσ x  15.92  3   15.62
 4
X-bar Control Chart
 Control Chart for Range (R)
 Center Line and Control Limit  Factors for three sigma control limits
formulas: Factor for x-Chart Factors for R-Chart
Sample Size
(n) A2 D3 D4
0.2  0.3  0.2 2 1.88 0.00 3.27
R  .233 3 1.02 0.00 2.57
3
4 0.73 0.00 2.28
5 0.58 0.00 2.11
6 0.48 0.00 2.00
UCLR  D4 R  2.28(.233)  .53
7 0.42 0.08 1.92
LCLR  D3 R  0.0(.233)  0.0 8 0.37 0.14 1.86
9 0.34 0.18 1.82
10 0.31 0.22 1.78
11 0.29 0.26 1.74
12 0.27 0.28 1.72
13 0.25 0.31 1.69
14 0.24 0.33 1.67
15 0.22 0.35 1.65
R-Bar Control Chart
Second Method for the X-bar Chart Using
R-bar and the A2 Factor (table 6-1)
 Use this method when sigma for the process
distribution is not know
 Control limits solution:
0.2  0.3  0.2
R  .233
3

UCL x  x  A 2 R  15.92   0.73 .233  16.09

LCL x  x  A 2 R  15.92   0.73 .233  15.75

Control Charts for Attributes –
P-Charts & C-Charts
 Attributes are discrete events; yes/no,
pass/fail
 Use P-Charts for quality characteristics that are
discrete and involve yes/no or good/bad decisions
 Number of leaking caulking tubes in a box of 48
 Number of broken eggs in a carton

 Use C-Charts for discrete defects when there can be

more than one defect per unit
 Number of flaws or stains in a carpet sample cut from a
production run
 Number of complaints per customer at a hotel
 P-Chart Example: A Production manager for a tire company has
inspected the number of defective tires in five random samples
with 20 tires in each sample. The table below shows the number of
defective tires in each sample of 20 tires. Calculate the control
limits.

Sample Number Number of Proportion

of Tires in Defective
 Solution:
Defective each
Tires Sample
1 3 20 .15 # Defectives 9
CL  p    .09
2 2 20 .10 Total Inspected 100
3 1 20 .05 p(1  p) (.09)(.91)
σp    0.64
4 2 20 .10 n 20
5 2 20 .05 UCLp  p  z  σ   .09  3(.064)  .282
Total 9 100 .09 LCLp  p  z  σ   .09  3(.064)  .102  0
P- Control Chart
 C-Chart Example: The number of weekly customer
complaints are monitored in a large hotel using a
c-chart. Develop three sigma control limits using the
data table below.

Week Number of  Solution:

Complaints
1 3
2 2 # complaints 22
3 3
CL    2.2
# of samples 10
4 1
5 3 UCLc  c  z c  2.2  3 2.2  6.65
6 3
LCLc  c  z c  2.2  3 2.2  2.25  0
7 2
8 1
9 3
10 1
Total 22
C-Control Chart
 Process Capability
 Product Specifications
 Preset product or service dimensions, tolerances
 e.g. bottle fill might be 16 oz. ±.2 oz. (15.8oz.-16.2oz.)
 Based on how product is to be used or what the customer expects
 Process Capability – Cp and Cpk
 Assessing capability involves evaluating process variability relative to
preset product or service specifications
 Cp assumes that the process is centered in the specification range
specification width USL  LSL
Cp  
process width 6σ
 Cpk helps to address a possible lack of centering of the process
 USL  μ μ  LSL 
Cpk  min , 
 3σ 3σ 
Relationship between Process
Variability and Specification Width
 Three possible ranges for Cp

 Cp = 1, as in Fig. (a), process

variability just meets
specifications

 Cp ≤ 1, as in Fig. (b), process not

capable of producing within
specifications

 Cp ≥ 1, as in Fig. (c), process

exceeds minimal specifications

 One shortcoming, Cp assumes

that the process is centered on
the specification range

 Cp=Cpk when process is centered

 Computing the Cp Value at Cocoa Fizz: three bottling
machines are being evaluated for possible use at the Fizz plant.
The machines must be capable of meeting the design
specification of 15.8-16.2 oz. with at least a process
capability index of 1.0 (Cp≥1)

 The table below shows the information  Solution:

gathered from production runs on each
machine. Are they all acceptable?
 Machine A
USL  LSL .4
Cp   1.33
6σ 6(.05)
Machine σ USL-LSL 6σ
 Machine B
A .05 .4 .3
Cp=
B .1 .4 .6
 Machine C
C .2 .4 1.2

Cp=
Computing the Cpk Value at Cocoa Fizz
 Design specifications call for a
target value of 16.0 ±0.2 OZ.
(USL = 16.2 & LSL = 15.8)
 Observed process output has now
shifted and has a µ of 15.9 and a
σ of 0.1 oz.
 16.2  15.9 15.9  15.8 
Cpk  min , 
 3(.1) 3(.1) 
.1
Cpk   .33
.3
 Cpk is less than 1, revealing that
the process is not capable
 ±6 Sigma versus ± 3 Sigma
 Motorola coined “six-sigma” to  PPM Defective for ±3σ
describe their higher quality versus ±6σ quality
efforts back in 1980’s

 Six-sigma quality standard is

now a benchmark in many
industries
 Before design, marketing ensures
customer product characteristics
 Operations ensures that product
design characteristics can be met
by controlling materials and
processes to 6σ levels
 Other functions like finance and
accounting use 6σ concepts to
control all of their processes
±6 Sigma versus ± 3 Sigma

3σ = 99.74%

6σ = 99.99966%

1.482 1.491 1.50 1.509 1.518

Specification Limits
1.48 1.52
Acceptance Sampling
 Definition: the third branch of SQC refers to the
process of randomly inspecting a certain number of
items from a lot or batch in order to decide whether to
accept or reject the entire batch
 Different from SPC because acceptance sampling is
performed either before or after the process rather
than during
 Sampling before typically is done to supplier material
 Sampling after involves sampling finished items before shipment
or finished components prior to assembly
 Used where inspection is expensive, volume is high, or
inspection is destructive
Acceptance Sampling Plans
 Goal of Acceptance Sampling plans is to determine the criteria
for acceptance or rejection based on:
 Size of the lot (N)
 Size of the sample (n)
 Number of defects above which a lot will be rejected (c)
 Level of confidence we wish to attain
 There are single, double, and multiple sampling plans
 Which one to use is based on cost involved, time consumed, and cost of
passing on a defective item
 Can be used on either variable or attribute measures, but more
commonly used for attributes
 Operating Characteristics (OC)
Curves
 OC curves are graphs which show
the probability of accepting a lot
given various proportions of
defects in the lot
 X-axis shows % of items that are
defective in a lot- “lot quality”
 Y-axis shows the probability or
chance of accepting a lot
 As proportion of defects increases,
the chance of accepting lot
decreases
 Example: 90% chance of accepting
a lot with 5% defectives; 10%
chance of accepting a lot with 24%
defectives
 AQL, LTPD, Consumer’s Risk (α)
& Producer’s Risk (β)
 AQL is the small % of defects that
consumers are willing to accept;
order of 1-2%
 LTPD is the upper limit of the
percentage of defective items
consumers are willing to tolerate
 Consumer’s Risk (α) is the chance
of accepting a lot that contains a
greater number of defects than the
LTPD limit; Type II error
 Producer’s risk (β) is the chance a
lot containing an acceptable quality
level will be rejected; Type I error
 Developing OC Curves
 OC curves graphically depict the discriminating power of a sampling plan
 Cumulative binomial tables like partial table below are used to obtain probabilities of
accepting a lot given varying levels of lot defectives
 Top of the table shows value of p (proportion of defective items in lot), Left hand column
shows values of n (sample size) and x represents the cumulative number of defects found

Table 6-2 Partial Cumulative Binomial Probability Table (see Appendix C for complete table)
Proportion of Items Defective (p)
.05 .10 .15 .20 .25 .30 .35 .40 .45 .50
n x
5 0 .7738 .5905 .4437 .3277 .2373 .1681 .1160 .0778 .0503 .0313
Pac 1 .9974 .9185 .8352 .7373 .6328 .5282 .4284 .3370 .2562 .1875
AOQ .0499 .0919 .1253 .1475 .1582 .1585 .1499 .1348 .1153 .0938
 Example 6-8 Constructing an OC Curve
 Lets develop an OC curve for a
sampling plan in which a sample
of 5 items is drawn from lots of
N=1000 items
 The accept /reject criteria are set
up in such a way that we accept a
lot if no more that one defect
(c=1) is found
 Using Table 6-2 and the row
corresponding to n=5 and x=1
 Note that we have a 99.74%
chance of accepting a lot with 5%
defects and a 73.73% chance
with 20% defects
 Average Outgoing Quality (AOQ)
 With OC curves, the higher the quality of the
lot, the higher is the chance that it will be
accepted
 Conversely, the lower the quality of the lot,
the greater is the chance that it will be
rejected
 The average outgoing quality level of the
product (AOQ) can be computed as follows:
AOQ=(Pac)p
 Returning to the bottom line in Table 6-2,
AOQ can be calculated for each proportion
of defects in a lot by using the above
equation
 This graph is for n=5 and x=1 (same
as c=1)
 AOQ is highest for lots close to 30%
defects
Implications for Managers
 How much and how often to inspect?
 Consider product cost and product volume
 Consider process stability
 Consider lot size
 Where to inspect?
 Inbound materials
 Finished products
 Prior to costly processing
 Which tools to use?
 Control charts are best used for in-process production
 Acceptance sampling is best used for inbound/outbound
SQC in Services
 Service Organizations have lagged behind
manufacturers in the use of statistical quality control
 Statistical measurements are required and it is more
difficult to measure the quality of a service
 Services produce more intangible products
 Perceptions of quality are highly subjective
 A way to deal with service quality is to devise
quantifiable measurements of the service element
 Check-in time at a hotel
 Number of complaints received per month at a restaurant
 Number of telephone rings before a call is answered
 Acceptable control limits can be developed and charted
 Service at a bank: The Dollars Bank competes on customer service and
is concerned about service time at their drive-by windows. They recently
installed new system software which they hope will meet service
specification limits of 5±2 minutes and have a Capability Index (Cpk) of
at least 1.2. They want to also design a control chart for bank teller use.

 They have done some sampling recently (sample size of 4

customers) and determined that the process mean has
shifted to 5.2 with a Sigma of 1.0 minutes.
USL  LSL 7-3
Cp   1.33
6σ  1.0 
6 
 4
 5.2  3.0 7.0  5.2 
Cpk  min , 
 3(1/2) 3(1/2) 
1.8
Cpk   1.2
1.5
 Control Chart limits for ±3 sigma limits
 1 
UCLx  X  zσ x  5.0  3   5.0  1.5  6.5 minutes
 4
 1 
LCL x  X  zσ x  5.0  3   5.0  1.5  3.5 minutes
 4
SQC Across the Organization
 SQC requires input from other organizational
functions, influences their success, and are actually
used in designing and evaluating their tasks
 Marketing – provides information on current and future
quality standards
 Finance – responsible for placing financial values on SQC
efforts
 Human resources – the role of workers change with SQC
implementation. Requires workers with right skills
 Information systems – makes SQC information accessible for
all.
 Chapter 6 Highlights
 SQC can be divided into three categories: traditional statistical tools
(SQC), acceptance sampling, and statistical process control (SPC).
 SQC tools describe quality characteristics, acceptance sampling is used
to decide whether to accept or reject an entire lot, SPC is used to
monitor any process output to see if its characteristics are in Specs.
 Variation is caused from common (random), unidentifiable causes and
also assignable causes that can be identified and corrected.
 Control charts are SPC tools used to plot process output characteristics
for both variable and attribute data to show whether a sample falls
within the normal range of variation: X-bar, R, P, and C-charts.
 Process capability is the ability of the process to meet or exceed
preset specifications; measured by Cp and Cpk.
Chapter Highlights (continued)

 The term six-sigma indicates a level of quality in which the

number of defects is no more than 3.4 parts per million.
 Acceptance sampling uses criteria for acceptance or rejection
based on lot size, sample size, and confidence level. OC curves
are graphs that show the discriminating power of a sampling
plan.
 It is more difficult to measure quality in services than in
manufacturing. The key is to devise quantifiable measurements.