Quality

1
Operations Management Process Quality
Improvement Module

• Quality the Voice of the Customer
• What is Quality?
• Quality Programs in practice
• Voice of the Customer
• Process Capability and Improvement
• Process Capability
• Checking for Improvement (Quality Wireless)
• Control Charts Voice of the Process
• Statistical Process Control (SPC)
• Quality Wireless (B)
• Why 6-Sigma?
• Flyrock Tires

2
8 Dimensions of Quality

• Performance
• Features
• Serviceability
• Aesthetics
• Perceived Quality
• Reliability
• Conformance
• Durability

Q of design
Q of process conformance to design process
capability
3
Elements of TQM

• Management by fact
• Cross-functional (process) approach
• Culture and leadership
• Customer focus
• Employee focus
• High performance focus
• Continuous improvement
• Benchmarking
• External alliances - the value chain
• Source Eitan Zemel

4
Malcolm Baldridge National Quality Award

• 1 Leadership 110
• 2 Strategic Planning 80
• Strategy Development Process
• 3 Customer and Market Focus 80
• 4 Information and Analysis 80
• 5 Human Resource Development and Management 100
• 6 Process Management 100
• Product and Service Processes
• Support Processes
• Supplier and Partnering Processes
• 7 Business Results 450
• TOTAL POINTS 1000

5
Malcolm Baldridge Award Winners

• Ames Rubber Corporation (1993)
• Armstrong World Industries Building Products
  Operations (1995)
• ATT Consumer Communications Services (1994)
• ATT Network Systems Group (1992)
• ATT Universal Card Services (1992)
• Cadillac Motor Car Company (1990)
• Chugach School District (2001)
• Clarke American Checks (2001)
• Corning Telecommunications Products Division
  (1995)
• Dana Corporation (2000)
• Eastman Chemical Company (1993)
• Federal Express Corporation (1990)
• Globe Metallurgical Inc. (1988)
• Granite Rock Company (1992)
• GTE Directories Corporation (1994)
• IBM Rochester (1990)

• Karlee Company, Inc. (2000)
• Los Alamos National Bank (2000)
• Marlow Industries (1991)
• Milliken Company (1989)
• Motorola Inc. (1988)
• Operations Management International (2000)
• Pals Sudden Service (2001)
• Pearl River School District (2001)
• The Ritz-Carlton Hotel Company (1992)
• Solectron Corporation (1991)
• Texas Instruments Incorporated - Defense Systems
  Electronics Group (1992)
• University of Wisconsin-Stout (2001)
• Wainwright Industries, Inc. (1994)
• Wallace Co., Inc. (1990)
• Westinghouse Electric Corporation - Commerical
  Nuclear Fuel Division (1988)
• Xerox Corporation - Business Products Systems
  (1989)
• Zytec Corporation (1991)

Last Updated May 28, 2002
6
ISO 9000

• Series of standards agreed upon by the
  International Organization for Standardization
  (ISO)
• Adopted in 1987
• More than 100 countries
• A prerequisite for global competition?
• ISO 9000 document what you do and then do as
  you documented.

Design
Procurement
Production
Final test
Installation
Servicing
ISO 9003
ISO 9002
ISO 9001
Source Adapted from Chase Aquilano
7
(No Transcript)
8
(No Transcript)
9
Costs of Quality

• Cost of Conformance
• Cost of Appraisal
• Cost of Prevention
• Cost of Non-Conformance
• Cost of Internal Failure
• Cost of External Failure

10
Components of Quality

• Voice of the customer
• Customer Needs
• Quality of Design
• Voice of the process
• Quality of Conformance
• Process Capability
• Process Control and Improvement

11
Voice of the Customer Linking Customer Needs to
Business Processes

• Business Process Customer Need
  Internal Metric

Source Kordupleski et al., CMR 93.
12
Voice of the Customer Quality Function
Deployment

• What do customers want?
• Are all preferences equally important?
• Will delivering perceived needs deliver a
  competitive advantage?
• How can we change the product?
• How do engineering characteristics influence
  customer perceived quality?
• How does one engineering attribute affect
  another?
• What are the appropriate targets for the
  engineering characteristics?

13
House of Quality
Correlation
Strong positive
X
Positive
X
X
Negative
X
X
X
Strong negative

Engineering Characteristics
Competitive evaluation
Door seal resistance
Check force on level ground
X Ours
Energy needed to close door
Energy needed to open door
Accoust. Trans. Window
Water resistance
A Comp. A
Importance to Cust.
B Comp. B
Customer Requirements
(5 is best)


1 2 3 4 5
-
-
-

AB
X
X
Easy to close
7
X AB
Stays open on a hill
5
Easy to open
3
XAB
A X B
Doesnt leak in rain
3
No road noise
2
X A
B
Relationships
Importance weighting
Strong 9
Medium 3
Target values
Reduce energy level to 7.5 ft/lb
Small 1
Reduce energy to 7.5 ft/lb.
Reduce force to 9 lb.
Maintain current level
Maintain current level
Maintain current level
5
BA
BA
B
B
BXA
X
Technical evaluation (5 is best)
4
B
X
A
X
A
3
A
X
2
X
Source Hauser and Clausing 1988
1
14
Linked Houses From Customer To Manufacturing
15
Benefits of QFD
Startup and Preproduction costs at Toyota Auto
Body
Japanese automaker with QFD made fewer changes
than US company without QFD
Design Changes
US
Japan
Before QFD
After QFD (39 of preQFD costs)
90 of total Japanese changes complete
Job 1
Job 1
20 - 24 months
14 - 17 months
1 - 3 months
1 - 3 months
time
t
Source Hauser and Clausing 1988
16
More New Product Development Tools

• Value analysis / Value engineering
• Design for manufacturability
• Robust design

17
Value Analysis/Value Engineering

• Achieve equivalent or better performance at a
  lower cost while maintaining all functional
  requirements defined by the customer
• Does the item have any design features that are
  not necessary?
• Can two or more parts be combined into one?
• How can we cut down the weight?
• Are there nonstandard parts that can be
  eliminated?

18
Robust Quality Taguchis View of Cost of
Variability
Lower Tolerance
Design Spec
Upper Tolerance
Traditional View
Taguchis View
19
Quality the Voice of the Customer Key
Learning Objectives

• Elements of TQM / Baldridge / ISO 9000
• Costs of Quality
• Components of Quality
• Voice of the Customer
• Linking business processes to customer needs
• Product Design Methodologies
• Convert customer needs to product and process
  specifications QFD
• Value Engineering

20
Operations Management Process Quality
Improvement Module

• Quality the Voice of the Customer
• What is Quality?
• Quality Programs in practice
• Voice of the Customer
• Process Capability and Improvement
• Process Capability
• Checking for Improvement (Quality Wireless)
• Control Charts Voice of the Process
• Statistical Process Control (SPC)
• Quality Wireless (B)
• Why 6-Sigma?
• Flyrock Tires

21
Process Capability

• Percent defective
• Proportion of output that does not meet customer
  specifications
• Sigma-capability
• Number of standard deviations from the mean of
  the process output to the closest specification
  limit.

22
Quality Wireless (A) Capability
Out of Specs
Within Specs
23
Quality Wireless (A) Capability

• Proportion of days within specification in
  2003-04 491/731 0.672
• The call center had a mean hold time of 99.67
  with a standard deviation of 24.24. With a
  specification of 110 seconds or less,
• s-capability of call center (110 99.67)/24.24
• 0.426
• The call center is a 0.426-sigma process.
  Expected fraction of days within specifications
  from a 0.426-sigma process NORMSDIST(0.426)
  0.665

24
What is Process Improvement?
25
Continuous ImprovementPDCA Cycle (Deming
Wheel)
Institutionalize the change or abandon or do it
again.
Plan a change aimed at improvement.
1. Plan
4. Act
2. Do
3. Check
Execute the change.
Study the results did it work?
26
Quality Wireless (A) Checking for Improvement

• Performance in April 2005 Mean 79.50, Standard
  deviation 16.86
• What is the probability of observing such a
  sample if performance has not improved relative
  to 2003-04?
• Mean hold in 2003-04 99.67
• Standard deviation 24.24
• Given that April 2005 had 30 days, we need to
  consider distribution of samples of size 30. The
  standard deviation of sample means 24.24/v30
  4.43
• Probability of observing a sample of size 30 with
  mean 79.50 or less NORMDIST(79.50, 99.67, 4.43,
  1) 2.64E-06

27
Operations Management Process Quality
Improvement Module

• Quality the Voice of the Customer
• What is Quality?
• Quality Programs in practice
• Voice of the Customer
• Process Capability and Improvement
• Process Capability
• Checking for Improvement (Quality Wireless)
• Control Charts Voice of the Process
• Statistical Process Control (SPC)
• Quality Wireless (B)
• Why 6-Sigma?
• Flyrock Tires

28
Has Process Performance Changed? Quality Wireless
(B)

• Average hold time from September 1-10 86.6
  seconds
• Ray yells at supervisors
• Performance improves from September 11-20 to an
  average hold of 74.4 seconds
• What do you think of Rays management style?

29
Performance of Inventory Manager
WIP
Award Given
month
J F M A M J J A S O N
WIP
Manager repents and kicks...
month
J F M A M J J A S O N D J F
WIP
.. and concludes that kick ... mgt works !?
J F M A M J J A S O N D J F M A M J
month
30
Statistical Process Control Source of
Variability

• Inherent (common cause)
• External (assignable cause)
• Objective Identify inherent variability and
  eliminate external variability. A process is in
  control if it has only inherent variability.
• To improve the system, attack common causes
  (methods, people, material, machines). This is
  the role of management.

31
Various Patterns in Control Charts
Pattern
Description Possible
Causes
Normal Random Variation
Lack of Stability Assignable (or special) causes
(e.g. tool, material, operator, overcontrol
Cumulative trend Tool Wear
Cyclical Different work shifts, voltage
fluctuations, seasonal effects
32
SPC Quality Wireless (B)

• After the improvements, daily hold time has an
  average of 79.50 and a standard deviation of
  16.86.
• Since we are considering samples of size 10 (10
  days), we need to consider the distribution of
  sample means. Sample means have an average of
  79.50 and a standard deviation of 16.86/v10
  5.33.
• Probability of observing 86.6 or higher even if
  process is in control 1-NORMDIST(86.6, 79.50,
  5.33, 1) 0.0915

33
SPC Quality Wireless (B)

• Probability of observing 74.4 or lower even if
  process is in control NORMDIST(74.4, 79.50,
  5.33, 1) 0.1693
• What we need is a hypothesis test each time we
  observe a sample Does the sample belong to the
  in-control population or not?

34
SPC Setting Control Limits

• Upper Control Limit UCL Mean 3sXbar
• Lower Control Limit LCL Mean - 3sXbar
• In the case of Quality Wireless
• UCL 79.50 35.33 95.49
• LCL 79.50 - 35.33 63.51
• The process was in control when samples with
  means of 86.6 and 74.4 were observed.

35
Control Charts Voice of the Process Key
Learning Objectives

• The role of variability in evaluating performance
• A process
• in control has only inherent (from common cause)
  variation
• out of control has variation from an assignable
  cause
• SPC framework for process control and improvement

36
Operations Management Process Quality
Improvement Module

• Quality the Voice of the Customer
• What is Quality?
• Quality Programs in practice
• Voice of the Customer
• Process Capability and Improvement
• Process Capability
• Checking for Improvement (Quality Wireless)
• Control Charts Voice of the Process
• Statistical Process Control (SPC)
• Quality Wireless (B)
• Why 6-Sigma?
• Flyrock Tires

37
Why 6-Sigma?

• 2 sigma
• 69.146 of products and/or services meet customer
  requirements with 308,538 defects per million
  opportunities.
• 4 sigma
• 99.379 of products and/or services meet customer
  requirements ... but there are still 6,210
  defects per million opportunities.
• 6 sigma
• 99.99966 As close to flaw-free as a business
  can get, with just 3.4 failures per million
  opportunities (e.g. products, services or
  transactions).

38
Why 6-Sigma?

• Impact of of parts/stages in a process

39
Why 6-Sigma? Robustness to Mean Shifts
99.9
99.9
40
Why 6-Sigma? 6-Sigma Quality at Flyrock

• At the extruder, the rubber for the AX-527 tires
  had thickness specifications of 400 ? 10. Susan
  and her staff had analyzed many samples of output
  from the extruder and determined that if the
  extruder settings were accurate, the output
  produced by the extruder had a thickness that was
  normally distributed with a mean of 400 and a
  standard deviation of 4.
• If the setting is accurate, what proportion of
  the rubber extruded will be within
  specifications?

41
Process Capability Sigma Capability

• Sigma capability is the number of standard
  deviations from the mean to the closest
  specification limit.
• Sigma capability of extrusion process
• Susan has asked operators to take a sample of 10
  sheets of rubber each hour from the extruder and
  measure the thickness of each sheet. Based on the
  average thickness of this sample, operators will
  decide whether the extrusion process is in
  control or not. Given that Susan plans 3-sigma
  control limits, what upper and lower control
  limits should she specify to the operators?

42
Impact of Mean Shift

• If a bearing is worn out, the extruder produces a
  mean thickness of 403 when the setting is 400.
  Under this condition, what proportion of
  defective sheet will the extruder produce?
  Assuming the control limits in (2), what is the
  probability that a sample taken from the extruder
  with the worn bearings will be out of control? On
  average, how many hours are likely to go by
  before the worn bearing is detected.

43
Why 6-Sigma? Rapid Detection

• What if extrusion is to become a 6-Sigma process?
• Target mean
• Target standard deviation
• Process improvement has resulted in the extrusion
  process having a mean of 400 and a standard
  deviation of 1.667. What should the new control
  limits be? What is the proportion of defectives
  produced?

44
Improving Process Capability

• Return to the case of the worn bearing in (3)
  where extrusion produces a mean thickness of 403
  when the setting is 400. Under this condition,
  what proportion of defective sheets will the
  extruder produce (for the 6-sigma process)?
  Assuming the control limits in (5), what is the
  probability that a sample taken from the extruder
  with the worn bearings will be out of control? On
  average, how many hours are likely to go by
  before the worn bearing is detected.

45
Key Learning Objectives SPC

• Specification limits Voice of the customer
• Process capability is a measure of the quality
  delivered (external) links VoP with VoC
• Improving capability may require variability
  reduction and/or mean shift
• Control limits used to verify if process is in
  control (internal), i.e., is maintaining
  capability Voice of the process
• Higher process capability reduces defectives and
  speeds up detection of assignable cause