OPERATIONS MANAGEMENT for MBAs Fourth Edition

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OPERATIONS MANAGEMENTfor MBAs Fourth Edition
Meredith and Shafer
John Wiley and Sons, Inc.
Topic 6 Controlling Processes
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Monitoring and Controlling Processes

• Balanced Scorecard
• Strategy Maps
• ISO 9000/14000/14001
• Benchmarking
• Statistical Process Control
• Homework, Quality Control Charts Next Section

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Balanced Scorecard
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Strategy Map
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Strategy Map
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ISO 9000 and 14000
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Statistical Quality/Process Control
The act of reducing differences between plan and
reality for a process. Monitoring and comparing
actual performance to a standard. Statistical
Process Control (SPC/SQC) the application of
statistical methods and procedures (such as
control charts) to analyze the inherent
variability of a process or its outputs to
achieve and maintain a state of statistical
control, and to improve the process capability.
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SPC, Causes of Variation

• Common causes
• Random, unavoidable sources of variation

• Assignable causes (out of statistical control)
• Can be identified and eliminated
• Change in the mean, spread, or shape

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• Control Charts time-ordered diagram of process
  performance

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Control Chart Factors
FACTORS FOR CALCULATING THREE-SIGMA LIMITS FOR THE xbar-CHART AND R-CHART FACTORS FOR CALCULATING THREE-SIGMA LIMITS FOR THE xbar-CHART AND R-CHART FACTORS FOR CALCULATING THREE-SIGMA LIMITS FOR THE xbar-CHART AND R-CHART FACTORS FOR CALCULATING THREE-SIGMA LIMITS FOR THE xbar-CHART AND R-CHART
Size of Sample (n) Factor for UCL and LCL for x-Chart (A2) Factor for LCL for R-Chart (D3) Factor for UCL for R-Chart (D4)
2 1.880 0 3.267
3 1.023 0 2.575
4 0.729 0 2.282
5 0.577 0 2.115
6 0.483 0 2.004
7 0.419 0.076 1.924
8 0.373 0.136 1.864
9 0.337 0.184 1.816
10 0.308 0.223 1.777
Example
WS
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Using xbar- and R-Charts
EXAMPLE The management of West Allis Industries
is concerned about the production of a special
metal screw used by several of the companys
largest customers. The diameter of the screw is
critical to the customers. Data from five samples
appear in the accompanying table. The sample size
is 4. Is the process in statistical control?
Data for the x- and R-Charts Observation of Screw Diameter (in.) Data for the x- and R-Charts Observation of Screw Diameter (in.) Data for the x- and R-Charts Observation of Screw Diameter (in.) Data for the x- and R-Charts Observation of Screw Diameter (in.) Data for the x- and R-Charts Observation of Screw Diameter (in.) Data for the x- and R-Charts Observation of Screw Diameter (in.) Data for the x- and R-Charts Observation of Screw Diameter (in.) Data for the x- and R-Charts Observation of Screw Diameter (in.) Data for the x- and R-Charts Observation of Screw Diameter (in.) Data for the x- and R-Charts Observation of Screw Diameter (in.) Data for the x- and R-Charts Observation of Screw Diameter (in.)
Observation Observation Observation Observation
Sample Number 1 2 3 4 R x
1 0.5014 0.5022 0.5009 0.5027 0.0018 0.5018
2 0.5021 0.5041 0.5024 0.5020 0.0021 0.5027
3 0.5018 0.5026 0.5035 0.5023 0.0017 0.5026
4 0.5008 0.5034 0.5024 0.5015 0.0026 0.5020
5 0.5041 0.5056 0.5034 0.5047 0.0022 0.5045
Average 0.0021 0.5027
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Example
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Example
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Process Capability IndexesCp and Cpk (for
example)
Process capability compares the output of an
in-control process to the specification limits by
using capability indices. The comparison is made
by forming the ratio of the spread between the
process specifications (the specification
"width") to the spread of the process values, as
measured by 6 process standard deviation units
(the process "width").
Process capability refers to the ability of the
process to meet the design specification for the
product or service Design specifications are
often expressed as a nominal value and a
tolerance Three-sigma quality,
Ratiogt1 Four-sigma quality, Ratiogt1.33 Six-sigma
quality, Ratiogt2
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Cp
Bad
Good
Good
Cpk
Bad
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Variation needs attention?
Yes
No
CritltCplCpu, CpgtCrit CritltCplltCpu,
CpgtCrit CritltCpultCpl, CpgtCrit
CritltCplCpu, CpltCrit CritltCplltCpu,
CpltCrit CritltCpultCpl, CpltCrit
No
Centering needs attention?
CritgtCplltCpu, CpltCrit CritgtCpultCpl, CpltCrit
CritgtCplltCpu, CpgtCrit CritgtCpultCpl, CpgtCrit
Yes
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