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

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

1.1 Definitions – Meaning of Quality andQuality Improvement1.1.1 The Eight Dimensions of Quality1.Performance 2.Reliability 3.How often the product fail?Durability 4.How long does the product last?Serviceability 5.How easy is it to repair the product?Aesthetics 6.What does the product look like?Features 7.What does the product do?Perceived Quality 8.What is the reputation of the company or its product?Conformance to Standards Chapter 1Will the product do the intended job?Is the product made exactly as the designer intended?Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.3

1.1 Definitions – Meaning of Quality andQuality Improvement The eight dimensions are adequate to describequality in industry. In service sectors add:– Responsiveness– Professionalism– AttentivenessChapter 1Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2012 John Wiley & Sons, Inc.4

This is a traditional definition Two aspects of fitness for use: Quality of design Quality of conformanceChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.5

This is a modern definition of qualityChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.6

The Transmission ExampleChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.7

The transmission example illustrates the utility of this definition An equivalent definition is that quality improvement is theelimination of waste. This is useful in service or transactionalbusinesses.Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.8

1-1.2 Quality Engineering TerminologyChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.9

Terminology cont’d Specifications– Lower specification limit– Upper specification limit– Target or nominal values Defective or nonconforming product Defect or nonconformity Not all products containing a defect arenecessarily defectiveChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.10

1.2. History of Quality ImprovementChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.11

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.12

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.13

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.14

1.3 Statistical Methods for QualityControl and ImprovementChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.15

Statistical Methods Statistical process control (SPC)– Control charts, plus other problem-solving tools– Useful in monitoring processes, reducing variabilitythrough elimination of assignable causes– On-line technique Designed experiments (DOX)– Discovering the key factors that influence processperformance– Process optimization– Off-line technique Acceptance SamplingChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.16

Walter A. Shewart (1891-1967) Trained in engineering and physics Long career at Bell Labs Developed the first control chartabout 1924Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.17

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.18

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.19

1.4 Management Aspects of QualityImprovementEffective management of quality requires theexecution of three activities:1. Quality Planning2. Quality Assurance3. Quality Control and ImprovementChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.20

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.21

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.22

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.23

1.4.1 Quality Philosophy and Management StrategyW. Edwards Deming Taught engineering, physics in the1920s, finished PhD in 1928 Met Walter Shewhart at WesternElectric Long career in governmentstatistics, USDA, Bureau of theCensus During WWII, he worked withUS defense contractors, deployingstatistical methods Sent to Japan after WWII to workon the censusChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.24

Deming Deming was asked by Japanese Union ofScientists and Engineers to lecture onstatistical quality control to management. Japanese adopted many aspects of Deming’smanagement philosophy Deming stressed “continual never-endingimprovement” Deming lectured widely in North Americaduring the 1980s; he died 24 December 1993Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.25

Deming’s 14 Points1. Create constancy of purpose toward improvement2. Adopt a new philosophy, recognize that we are in a time ofchange, a new economic age3. Cease reliance on mass inspection to improve quality4. End the practice of awarding business on the basis of pricealone5. Improve constantly and forever the system of production andservice6. Institute training7. Improve leadership, recognize that the aim of supervision ishelp people and equipment to do a better job8. Drive out fear9. Break down barriers between departmentsChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.26

14 Points cont’d10. Eliminate slogans and targets for the workforce such as zerodefects11. Eliminate work standards12. Remove barriers that rob workers of the right to pride in thequality of their work13. Institute a vigorous program of education and selfimprovement14. Put everyone to work to accomplish the transformationNote that the 14 points are about changeChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.27

Deming’s Deadly Diseases1. Lack of constancy of purpose2. Emphasis on short-term profits3. Performance evaluation, merit rating, annualreviews4. Mobility of management5. Running a company on visible figures alone6. Excessive medical costs for employee health care7. Excessive costs of warranteesChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.28

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.29

Deming’s Obstacles to SuccessChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.30

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.31

Joseph M. Juran Born in Romania (19042008), immigrated to the US Worked at Western Electric,influenced by WalterShewhart Emphasizes a more strategicand planning orientedapproach to quality thandoes Deming Juran Institute is still anactive organizationpromoting the Juranphilosophy and qualityimprovement practicesChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.32

The Juran Trilogy1. Planning2. Control3. Improvement Chapter 1These three processes are interrelatedControl versus breakthroughProject-by-project improvementStatistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.33

Some of the Other “Gurus” Kaoru Ishikawa– Son of the founder of JUSE, promoted widespread use ofbasic tools Armand Feigenbaum– Author of Total Quality Control, promoted overallorganizational involvement in quality,– Three-step approach emphasized quality leadership, qualitytechnology, and organizational commitmentChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.34

Total Quality Management (TQM) Started in the early 1980s, Deming/Juranphilosophy as the focal point Emphasis on widespread training, qualityawareness Training often turned over to HR function Not enough emphasis on quality control andimprovement tools, poor follow-through, noproject-by-project implementation strategy TQM was largely unsuccessfulChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.35

Total Quality Management (TQM) TQM is “just another program”Value engineeringZero defects“Quality is free”Recipes for Ineffectiveness and maybe DisasterChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.36

Quality Systems and StandardsChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.37

The ISO certification process focuses heavily on qualityassurance, without sufficient weight given to quality planning andquality control and improvementChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.38

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.39

The Malcolm Baldrige NationalQuality Award The MBNQA process is a valuable assessment tool See Table 1-4 for Performance Excellence Criteria and point valuesChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.40

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.41

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.42

Six Sigma Use of statistics & other analytical tools has grownsteadily for over 80 years– Statistical quality control (origins in 1920, explosivegrowth during WW II, 1950s)– Operations research (1940s)– FDA, EPA 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 impactduring 1990s to present)Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.43

Focus of Six Sigma is on Process Improvementwith an Emphasis on Achieving SignificantBusiness Impact A process is an organized sequence of activities thatproduces 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 SigmaChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.44

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.45

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 0.9044Family of four, once a month: P{All meals good} (0.9044) 4 0.6690P{All visits during the year good} (0.6690)12 0.0080P{single meal good} (0.999)10 0.9900, P{Monthly visit good} (0.99) 4 0.9607P{All visits in the year good} (0.9607)12 0.6186Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.46

Six Sigma Focus Initially in manufacturing Commercial applications––––BankingFinancePublic sectorServices DFSS – Design for Six Sigma– Only so much improvement can be wrung out of anexisting system– New process design– New product design (engineering)Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.47

Some Commercial Applications Reducing average and variation of days outstanding onaccounts receivable Managing costs of consultants (public accountants, lawyers) Skip tracing Credit scoring Closing the books (faster, less variation) Audit accuracy, account reconciliation Forecasting Inventory management Tax filing Payroll accuracyChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.48

Six Sigma A disciplined and analytical approach to process and productimprovement Specialized roles for people; Champions, Master Black belts,Black Belts, Green Belts Top-down driven (Champions from each business) BBs and MBBs have responsibility (project definition,leadership, training/mentoring, team facilitation) Involves a five-step process (DMAIC) :–––––Chapter 1DefineMeasureAnalyzeImproveControlStatistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.49

What Makes it Work? Successful implementations characterized by:– Committed leadership– Use of top talent– Supporting infrastructure Formal project selection processFormal project review processDedicated resourcesFinancial system integration Project-by-project improvement strategy(borrowed from Juran)Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.50

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.51

Design for Six Sigma (DFSS)Taking variability reduction upstream from manufacturing (oroperational six sigma) into product design and developmentEvery design decision is a business decisionChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.52

DFSS Matches Customer Needswith 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 fora design– Rationally allocate mean, variability, and failure rate targets tosubsystem 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 robustto variability Process capability impact design decisionsDFSS enhances product design methods.Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.53

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.54

DMAIC Solves Problems by UsingSix Sigma Tools DMAIC is a problem solving methodology Closely related to the Shewhart Cycle Use this method to solve problems:––––Define problems in processesMeasure performanceAnalyze causes of problemsImprove processes remove variations and nonvalue-added activities– Control processes so problems do not recurChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.5511

Lean Systems Focuses on elimination of waste–––––Long cycle timesLong queues – in-process inventoryInadequate throughputReworkNon-value-added work activities Makes use of many of the tools of operationsresearch and industrial engineeringChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.56

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.57

Little’s LawChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.58

Lean Focuses on Waste Elimination Definition A set of methods and tools used to eliminate waste ina process Lean helps identify anything not absolutely requiredto deliver a quality product on time. Benefits of using Lean Lean methods help reduce inventory, lead time, andcost Lean methods increase productivity, quality, on timedelivery, capacity, and salesChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.59

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.60

The supply chain often represents a significant component of the totalvalue of the organization’s products or servicesFailures in the supply chain have potentially huge impact on theorganizationChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.61

Key Supply Chain Processes Service managementDemand managementOrder fulfillmentQualityManufacturing flow managementSupplier relationship managementLogistics and distributionReturns managementChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.62

Key Supply Chain Management (SCM) Activities: Supplier qualification or certification Supplier development Supplier auditsChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.63

Returns ManagementCosts attributable to poor supplier qualityChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.64

Quality CostsChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.65

The Hidden Factory (or Office)Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.66

Legal Aspects of Quality Product liability exposure Concept of strict liability1. Responsibility of both manufacturer andseller/distributor2. Advertising must be supported by valid dataChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.67

Implementing Quality Improvement A strategic management process, focused along theeight dimension of quality Suppliers and supply chain management must beinvolved Must focus on all three components: Quality Planning,Quality Assurance, and Quality Control and ImprovementChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.68

Chapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.69

Learning ObjectivesChapter 1Statistical Quality Control, 7th Edition by Douglas C. Montgomery.Copyright (c) 2013 John Wiley & Sons, Inc.70

1.3 Statistical Methods for Quality Control and Improvement Chapter 1 Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 15 . Scientists and Engineers to lecture on statistical quality control t

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