BUSD2027 QualityMgmt Module2

Module 2: Practical Applications
of Quality Management
BUSD 2027: Quality Management

PowerPoint Disclaimer
All yellow slides in this PowerPoint are unaltered versions of the Managing
Quality: Integrating the Supply Chain slides created by Pearson Education, Inc.
These slides are under the following copyright:
All blue slides have been inserted as supplements as created by subject matter
experts of NorQuest College. They are a part of NorQuest copyright.
Statistical Terms
Mean – add up all the numbers and divide by how many numbers there are
Mode – The value which occurs most frequently
Median – The middle value of a range of values
Range – Difference between the highest and lowest value

Statistical Terms
Mean
Median
Standard Deviation – a Mode
measure of how much the
values are distributed around
the mean
Normal Distribution (Bell

Curve) – mean = median =
mode; half the values are above
the mean and half the values 1 standard
are below the mean deviation
Image: Toews, M.W. (2007). Standard deviation diagram [Digital Graphic]. Retrieved from https://commons.wikimedia.org/wiki/File:Standard_deviation_diagram.svg. Used under CC BY 2.5.
Statistical Terms
Standard Deviation
xbar = average of all values in data set (sample)

x = one of the values in the data set (sample)
n = number of points in the data set (sample)
• Note that xbar is not the average of the whole population, just your sample.
The true average would require 100% of the population. So to ensure that
xbar is useful, we have to ensure that we have a significant sample (i.e.
sample size).
Statistical Terms
Standard Deviation
Notice the dependency in this expression. Xbar is the average of all of the values in
the sample, while X is one of those values. The average value, Xbar, is therefore always
somewhere in the middle of that collection of values because it is dependent on your
sample. Xbar is not some magical number related to the population from which you
drew the samples. It is entirely dependent on the values you included in yours sample.
The true average of the population is not known until 100% of the values in the
population are known. To make the leap to assume that Xbar is a reasonable
approximation of the average value in the population, we must assume that every set
of samples we draw has an equal representation of values that are smaller than the
average and larger than the average - that is, the average deviation to the low side of
average is the same as the average deviation to the high side.
(Gorard, 2004)
Statistical Terms
Standard Deviation
So the formula for standard deviation includes a function that calculates the average
deviation. The average deviation is the sum of deviations divided by the number of
deviations that were included in the sum. Our challenge, is that some of those
deviations are negative (when Xbar is greater than X) and some of them are positive
(when Xbar is less than X).
We could have just added up the deviations and seen how closely the sum approaches
zero; that doesn’t tell us anything about how wide the spread is, just whether our
sample is balanced. To eliminate the negative sign in some of these deviations, we
have two choices. We could ignore the negative sign, and treat all deviations as
positive - that is, take the absolute value of the deviation, or we could square the
negative number, utilizing the rule that two negative numbers multiplied together
results in a positive. The latter, the “sum of squares” approach, has been the
preference of mathematicians because it lends itself to mathematical manipulation.
(Gorard, 2004)
Statistical Terms
Mean Deviation
However, the efficient and accurate approximation of the sample’s standard deviation
to the population’s standard deviation holds true only if the values are considered to
be true values. If there is measurement error associated with the values, then the two
methods are equally valid. In estimation, the mean deviation, calculating the average
absolute difference between individual values and the mean value is preferable to
standard deviation because:
• It is more efficient in calculating the spread of a normally distributed population
where there is a degree of measurement error in the results
• It is more efficient when the population is not perfectly normally distributed, or
normally distributed at all
(Gorard, 2004)
Statistical Terms
Mean Deviation
mean deviation
xbar = average of all values in data set (sample)

x = one of the values in the data set (sample)
n = number of points in the data set (sample)
Statistical Terms
Standard Deviation
In particular, the benefits of mean deviation in non-normal or not perfectly normal
distributions are two-fold.
Firstly, the concept of “normal” is theoretical, and affords advantages in that the
population can de described by two characteristics, the mean and the standard
deviation. In so many cases, we can’t prove that the population is normally
distributed; applying the formulas for normal distributions to data that is not perfectly
normal introduces error and can lead to misinterpretation.
Secondly, the larger the deviation from the mean, the more effect the value has on
the calculation of standard deviation. Because these “outliers” have a greater
influence in the calculated values than those clustered around the mean, we are
encouraged to find reasons to disregard them.
(Gorard, 2004)
Statistical Terms
z-score – The number of
standard deviations from the
mean
• To convert a value to a z-
score, subtract the mean
and then divide by the
standard deviation
cumulative percent – the

percentage of the distribution
that lies below the z-score
value
Image: Heds 1. (2007). The normal distribution [Digital Graphic]. Retrieved from https://commons.wikimedia.org/wiki/File:The_Normal_Distribution.svg. Used under CC0.
Statistical Terms
You may hear about these as you read statistics:
Null hypothesis (HO) - In any study you create alternative and null hypothesis.
The alternative is that your data is statistically relevant, the null is that it is not
(i.e. your observances are purely from chance).
Central limit theorem - distribution of the mean of any independent, random

variable (i.e. your data in an appropriately collected study) will be normal or
nearly normal (i.e. if you were to graph it it should have a distribution that looks
like a bell curve)
https://www.stat.tamu.edu/~lzhou/stat302/T-Table.pdf
How to tell whether a

sample is part of a
population (are two
distributions different)
t-test to Compare Two Sample Means
In this case, we require two separate sample means, standard deviations
and sample sizes. The t-statistic (t) and number of degrees of freedom
(d.o.f.) are computed:
http://www.chem.utoronto.ca/coursenotes/analsci/stats/ttest.html
The calculated values for t and d.o.f. (or d.f.) are used in a table of t values, and
if the calculated value is greater than the value in the table, the two samples, or
the sample and population, are different.
10-13
Overlapping normal distributions. Linacre JM. … Rasch
Measurement Transactions, 1996, 10:1 p.487
https://www.rasch.org/rmt/rmt101r.htm
10-14
Statistical Thinking
• Statistical thinking is a decision-making skill demonstrated
by the ability to draw conclusions based on data.
• Statistical thinking is based on three concepts:

• All work occurs in a system of interconnected processes.
• All processes have variation (the amount of variation tends to be
underestimated).
• Understanding variation and reducing variation are important keys
to success.
Copyright © 2017 Pearson Education, Inc. 11-15

Why Do Statistics Sometimes Fail in the
Workplace?
• A lack of knowledge about the tools leads to tools being
misapplied.
• General disdain for all things mathematical creates a natural
barrier to the use of statistics. When was the last time you
heard someone proclaim a love for statistics?
• Cultural barriers in a company make the use of statistics for
continual improvement difficult.
• Statistical specialists have trouble communicating with
managerial generalists.

Workplace? (cont’d)
• Statistics generally are poorly taught, emphasizing
mathematical development rather than application.
• People have a poor understanding of the scientific method.
• Organizations lack patience in collecting data. All decisions
have to be made “yesterday.”
• Statistics are viewed as something to buttress an already-
held opinion rather than a method for informing and
improving decision making.

• People fear using statistics because they fear they may violate
critical statistical assumptions. Time-ordered data are messy and
require advanced statistical techniques to be used effectively.
• Most people don’t understand random variation, resulting in too
much process tampering.
• Statistical tools often are reactive and focus on effects rather than
causes.
• When either type I or type II errors occur, erroneous decisions are
made relative to products that can result in high costs or lost
future sales.

• Type 1 error
• Producer’s risk
• Probability that a good product will be rejected
• Type 2 error
• Consumer’s risk
• Probability that a nonconforming product will be available for sale

Understanding Process Variation
• All processes exhibit variation
• Some variation can be managed and some cannot be managed.
• Types of process variation:

• Random
• Nonrandom

Random Variation
• Also called common cause
• Centered around the
mean and occurs with a
somewhat consistent
amount of dispersion
• Uncontrolled variation
• May be either large or
small Figure 11-1

Nonrandom Variation
• Also called special cause
variation
• Results from some event
which may be a shift in a
process mean or some
unexpected occurrence
• Dispersion and average of
the process are changing
• Process is not repeatable Figure 11-2

Process Stability
• The variation that we observe in the process is random
variation and not nonrandom.
• Process charts
• Graphs designed to signal process workers when nonrandom
variation is occurring in a process

Sampling Methods
Reasons why sampling is used:
• Samples are cheaper, take less time, are less intrusive, and allow
the user to frame the sample.
• If quality testing is destructive, 100% inspection would be

impossible.

Sampling Methods
Reasons why 100% inspection is used:
• When a lot of material has been rejected in the past and materials
must be sorted to keep good materials and return defective
materials for a refund
• When employees perform their own in-process inspection

Sampling Methods
• Random samples
• To sample in such a way that every piece or product has an equal
chance of being selected for inspection
• Systematic samples
• To sample according to time or according to sequence
• Rational subgroup samples

• To sample by a group of data that is logically homogenous
Planning for Inspection
Questions to answer about sampling:
• What type of planning will be used?
• Who will perform the inspection?
• Who will use in-process inspection?
• What is the sample size?
• What are the critical attributes to be inspected?
• Where should the inspection be performed?

Sampling Size and Frequency
The standard form of a sample size equation, to a confidence level of 95%, is:
To detect a shift of 1 standard deviation, the number of samples required is:
To detect a shift of 3 standard deviations, the number of samples required is

Sampling Size and Frequency
4 Issues to Consider:
1. Basis for Sampling – Samples should be as homogenous as possible
2. Sample Size – There is a trade-off between cost and information. Small

samples sizes involve less time, large sample sizes provide more information.
3. Frequency of Sampling – There is a trade-off between cost and information.

Samples should be taken frequent enough to provide an opportunity to detect
changes quick and minimize non-conforming output.
4. Location of Control Limits – Need to avoid incorrectly believing a special cause

is present, but also need to identify special causes that are present even
through points are within control limits.
(Evans & Lindsay, 2015, p.259-260)

Control Plans
• Provide a documented, proactive approach to defining how
to respond when process control charts show that a
process is out of control
• Required part of an ISO 9000 quality management system

(QMS)

Control Plan Sample
Figure 11-3
Process Control Charts
Statistical process control charts:
• Tools for monitoring process variation
Figure 11-4

Variables and Attributes Control Charts
• Variable
• Continuous measurement such as height, weight, or volume
• Attribute
• An either-or situation, such as a motor starting or not, or a lens
being scratched or not

The most common types of variable and attribute charts
Table 11-1

Central requirements for properly using process charts:
1. You must understand this generic process for implementing
process charts.
2. You must know how to interpret process charts.
3. You need to know when different process charts are used.
4. You need to know how to compute limits for the different types
of process charts.
5. We treat each of these topics separately.

Steps in developing process control charts:
1. Identify critical operations in the process where inspection might
be needed. These are operations in which the product will be
negatively affected if the operation is performed improperly.
2. Identify critical product characteristics. These are the aspects of
the product that will result in either good or poor functioning of
the product.
3. Determine whether the critical product characteristic is a
variable or an attribute.

Steps in developing process control charts (cont’d):
4. Select the appropriate process control chart from among the
many types of control charts. (This decision process and the
types of charts available are discussed later.)
5. Establish the control limits and use the chart to continually
monitor and improve.
6. Update the limits when changes have been made to the process.

Understanding Process Charts
• Process charts are an application of hypothesis testing
where the null hypothesis is that the process is stable.
• For example:
• Null Hypothesis: Ho: μ = 11 inches
• Alternative Hypothesis: H1: μ 11 inches
≠

Understanding Process Charts
Hypothesis Testing
Figure 11-5
Process Chart
Figure 11-6

•

Standard Process Chart Form
Figure 11-7

Completed Process Chart Form
Figure 11-8

x and R Charts Calculation Worksheet
Figure 11-9

Calculations for Figure 11-8 Data
Figure 11-10

Control Charts for Variables
Table 3.1
Copyright ©2016 Pearson Education, Inc. All rights reserved. 1-45

Interpreting Control Charts
Signals for
concern sent by
a control chart
Hansen, Bertrand L. Quality Control: Theory and Applications. Upper Saddle River, NJ: Pearson Education
(1964). ISBN: 013745208X. ©1964, p.65. Reprinted and Electronically reproduced by permission of Pearson
Education, Inc., New York, NY.
Figure 11-11
Signals for
concern sent by
a control chart
(cont’d)
Hansen, Bertrand L. Quality Control: Theory and Applications. Upper Saddle River, NJ: Pearson Education
(1964). ISBN: 013745208X. ©1964, p.65. Reprinted and Electronically reproduced by permission of Pearson
Education, Inc., New York, NY.
Figure 11-11
Out-of-control situations:
• Two points in succession farther than two standard deviations
from the mean
• Process run – Five points in succession either above or below the
center line
• Process drift – Seven points, all increasing or decreasing
• Erratic behavior – Large jumps of more than three or four standard
deviations

Example 11-1
• Problem: The Sampson Company produces high-tech radar
that is used in top-secret weapons by the Secret Service and
the Green Berets. It has had trouble with a particular round
component with a target of 6 centimeters. Samples of size 4
were taken during four successive days.
• The results are in the following table.

Example 11-1
• Develop a process chart to determine whether the process is stable.
Because these are measurements, use x and R charts.
• Using the calculation work sheet, Figure 11-12 shows the values for the
process control limits.
• The x control chart for this problem is shown with the appropriate
limits. The R chart is also in control. The sample averages were placed
on the control chart, and the process was found to be historically in
control. Because the averages and ranges fall within the control limits,
and no other signals of nonrandom activity are present, we conclude
that the process variation is random.
• Note that this example is very simple. Generally, you use 15 to 20
subgroups to establish control charts.
Example 11-1
•
Copyright © 2017 Pearson Education, Inc.

Figure 11-12
11-51
Example 11-1
Calculations
using Excel
Microsoft Excel, Microsoft Corporation. Used by permission.
Figure 11-13
X and Moving Range (MR) Charts for
Population Data
X and MR charts are used if you have a variable
measurement that you want to monitor and do not have
enough observations to use sampling.
• Central limit theorem does not apply, which may result in the data
being non-normally distributed.
• Therefore, there is an increase in the likelihood that you will draw
an erroneous conclusion.
• It is best to first make sure that the data are normally distributed.

X and Moving Range (MR) Charts for
Population Data
• X chart limits
• Center line:
• Limits:
• MR limits
• Same as R chart (where n=2),except that the ranges are computed
as the differences from one sample to the next

Example 11-2
• Problem: The EA Trucking Company of Columbia, Missouri
hauls corn from local fields to the SL Processing Plant in
Lincoln, Nebraska. Although the trucks generally take 6.5
hours to make the daily trip, recently there seems to be
more variability in the arrival times. Mr. Everett, the owner,
suspects that one of his drivers, Paul, may be visiting his
girlfriend Janice en route in Kansas City. The driver claims
that this is not the case and that the increase is simply
random variation because of variability in traffic flows. The
drivers keep written logs of departure and arrival times.

Example 11-2
Mr. Everett has listed
these times in the
following table. You
are chosen as the
analyst to investigate
this situation. What do
you think?

Example 11-2
• Solution: You
develop an X and
MR process chart to
test the hypothesis.
The results from
Excel are in Figure
11-14.
Microsoft Excel, Microsoft Corporation. Used by permission. Figure 11-14

Median Charts
• Median charts may be used if it is too time consuming or
inconvenient to compute subgroup averages or you have
concerns about the accuracy of computed means.
• Need to use an odd sample size, usually 3, 5, or 7

Median Chart Limits
• Center line:
• Control limits:

Example 11-3
• Problem: The Luftig food company has gathered the
following data with weights of its new health food product.
Because the published weight on the package is 6 ounces,
Mr. Luftig wants to know if the company is complying with
weight requirements.

Example 11-3
Twenty samples
of size 5 were
drawn.

Example 11-3
• Solution: Results
show that the process
is not in control, with
an average median of
6.23. The median
process chart does
show that some
product is being made
that is below 6
ounces. It also shows
that points 4, 7, and
10 are out of control. Microsoft Excel, Microsoft Corporation. Used by permission. Figure 11-15

•

•
Where:

•

•
Table 11-3

Example 11-4
• Problem: Twenty samples were taken for a milled rod. The
diameters are needed to determine whether the process is in
control. Because these milled rods must be measured within
1/10,000 of an inch, it is determined that the process
dispersion is important.
• Therefore, you need to use an s and x chart to monitor the
process. The data are found in Figure 11-16. We have 20
samples with n = 3.

Example 11-4
• Solution: The control
charts in Figure 11-
16 show that the
process is in control.
There is no need for
corrective action.
The solution method
is demonstrated in
the next section.
Microsoft Excel, Microsoft Corporation. Used by permission. Figure 11-16

Other Control Charts
Summary of Variables Chart Formulas
Table 11-4

Moving Average Chart
A chart for monitoring variables and measurement on a
continuous scale by using past information to predict what
the next process outcome will be

Cusum Chart
A chart used to identify slight but sustained shifts in a
universe in which there is no independence between
observations
Figure 11-17

CUSUM Example Sample
1
2
x
0.175
0.152
SH
0.001
0.000
SL
0.000
0.000
3 0.150 0.000 0.000
4 0.207 0.033 0.000
5 0.136 0.000 -0.010
6 0.212 0.038 0.000
7 0.166 0.030 0.000
8 0.141 0.000 -0.005
9 0.157 0.000 0.000
10 0.197 0.023 0.000
11 0.172 0.021 0.000
12 0.183 0.030 0.000
13 0.166 0.022 0.000
14 0.164 0.012 0.000
15 0.141 0.000 -0.005
16 0.186 0.012 0.000
17 0.127 0.000 -0.019
18 0.149 0.000 -0.016
19 0.155 0.000 -0.007
20 0.210 0.036 0.000
21 0.197 0.059 0.000
22 0.191 0.076 0.000
23 0.211 0.113 0.000
24 0.158 0.097 0.000
25 0.201 0.124 0.000
Image: SPC for Excel. (2017). Keeping the process on target: CUSUM charts [Digital Graphic]. Retrieved from https://www.spcforexcel.com/knowledge/variable-control-charts/keeping-process-target-cusum-charts.
Understanding Attributes Charts
• Defect – an irregularity or problem with a larger unit
• Countable; can be several within one unit
• Monitored using c and u charts
• Defective – a unit that, as a whole, is not acceptable or

does not meet performance requirements
• Monitored using p and np charts

Process Charts
• A process chart (or p chart) is used to graph the proportion
of items in a sample that are defective or nonconforming to
specification.
• They are also used to determine when there has been a

shift in the proportion defective for a particular product or
service.

p Charts Calculations
• Subgroup sizes
• Typically between 50-100 units, and can be of different sizes
• Formulas for control limits:
where:

np Charts
• A graph of the number of defectives (or nonconforming
units) in a subgroup
• Requires that the sample size of each subgroup be the same

each time a sample is drawn
• If sample sizes are equal, either the p or np chart can be

used.

c Charts
• A graph of the number of defects (nonconformities) per
unit
• Units must be of the same metric such as height, length,

volume, and so on.
• Used to detect nonrandom events in the life of the

production process and when you are inspecting the same
size sample space

u Charts
• A graph of the average number of defects per unit
• Allows for the units sampled to be different sizes, areas,

heights, etc.
• The uses for the u chart are the same as the c chart.

Choosing the Correct Variables Control
Chart
Figure 11-18

Corrective Action
Corrective action steps when a process is out of control:
1. Carefully identify the quality problem.
2. Form the appropriate team to evaluate and solve the problem.
3. Use problem solving methodology, fishbone diagrams or 5 Why’s
to identify causes of problems.
4. Brainstorm to identify potential solutions to problems.
5. Eliminate the cause.
6. Restart the process.
7. Document the problem, root causes, and solutions.
8. Communicate the results of the process to all personnel so this
process becomes reinforced and ingrained in the organization.
Using Control Charts to Continuously
Improve
Two key concepts:
• The focus of control charts should be on continuous improvement.
• Control chart limits should be updated only when there is a change

to the process. Otherwise, any changes are unexpected.

Effects of Tampering with the Process
Figure 11-19

Process Capability for Variables
• The capability of a process to produce a product that meets
specification
• World-class levels of process capability are measured by

parts per million (ppm) defect levels.

Process Capability for Variables
Six Sigma programs result in highly capable processes and an
average of only 3.4 defects per million units produced.
Figure 11-20

Population versus Sampling Distributions
• Population distributions
• Distributions with all individual responses from an entire
population
• Population
• A collection of all the items or observations of interest to a
decision maker
• Sample
• A subset of the population
• Sampling distributions
• Distributions that reflect the distribution of sample means
Population and Sampling Distributions for Class Heights
Figure 11-21

• In the context of quality, specifications and capability are
associated with population distributions.
• Sample-based process charts and stability are computed
statistically and reflect sampling distributions.
• Quality practitioners should not compare process chart
limits with product specifications.

Capability Studies
Reasons to perform a process capability study:
1. To determine whether a process consistently results in products
that meet specifications
2. To determine whether a process is in need of monitoring
through the use of permanent process charts

Capability Studies
Five steps to perform process capability studies:
1. Select a critical operation. These may be bottlenecks, costly
steps of the process, or places in the process in which problems
have occurred in the past.
2. Take k samples of size n, where x is an individual observation.
• Where 19 < k < 26
• If x is an attribute, n > 50 (as in the case of a binomial)
• Or if x is a measurement, 1 < n < 11
3. Use a trial control chart to see whether the process is stable.

Capability Studies
Five steps to perform process capability studies (cont’d):
4. Compare process natural tolerance limits with specification
limits. Note that natural tolerance limits are three standard
deviation limits for the population distribution. This can be
compared with the specification limits.
5. Compute capability indexes. To compute capability indexes,
compute an upper capability index (Cpu), a lower capability
index (Cpl), and a capability index (Cpk). The formulas are:
Where:

Capability Studies
• Although different firms use different benchmarks, the
generally accepted benchmarks for process capability are
1.25, 1.33, and 2.0.
• We will say that processes that achieve capability indexes

(Cpk) of 1.25 are capable, 1.33 are highly capable, and 2.0
are world-class capable (Six Sigma).

Example 11-5
•

Example 11-5
• Solution:
• The process capability is poor.

• To compute the proportion of nonconforming product
being produced:

Example 11-5
Proportion of Product Nonconforming
Figure 11-22

Population Capability Index (Ppk)
Rather than using within-groups variation to estimate the
sigma that you used in Cpk, use the population standard
deviation to compute your capability.
Where:

Example 11-6
• Problem: The upper and lower specification limits
(tolerances) for a metal plate are 3 millimeters + 0.002
millimeters. A sample of 100 plates yielded a mean x of 3.001
millimeters. We know that the population standard deviation
is .0002. Compute the Ppk for this product.
• Solution:
Therefore, the process is highly capable.

Capability versus Stability
• A process is capable if individual products consistently
meet specification.
• A process is stable if only common variation is present in

the process.

Problem Solving: The Four Rational
Processes
Charles Kepner (a social psychologist) and Benjamine Tregoe (a sociologist)
worked with advanced defense systems.
Over the years, they thought about the ways people use information in a
highly-automated data processing system.
The research and conclusions compiled by Kepner and Tregoe resulted in a

foundational textbook for management studies: “The Rational Manager: A
Systematic Approach to Problem Solving and Decision Making” launched
the careers of Kepner and Tregoe as management consultants.
As they have both recently passed, their company, Kepner-Tregoe Inc.,

continues as the leader and authority on the rational processes.
Processes
Pattern of Thought Concept Rational Process
What’s going on? Clarification Situation appraisal
Why did this happen? Cause and effect Problem solving
What course of action should

Choice Decision making
we take?
Potential problem (opportunity)

What lies ahead? Consider future possibilities
analysis
Processes
Problem Solving
Not all gaps are problems. If you have a gap, and you don’t know why the
gap exists, and you need to know why the gap exists in order to address it,
then you have a problem to solve. It’s that simple. If you don’t have a
problem, move on to the next Rational Process and see if you need that.
If you do have a problem, then the fastest way to solve it is to follow these
steps IN ORDER. Order is important here, because often problem solving
becomes a very drawn-out affair with poor results because the process is
followed out of sequence.
(Kepner & Tregoe, 1965)

Problem Solving: Step 1
Create a problem statement that clearly defines the gap you are facing, in
terms of two important characteristics: the object and the deviation.
i. The object is the item on which the gap exists. This can be an actual
object, like
i. a stapler that doesn’t work, or
ii. a piece of fruit that is bruised
or it be less physical, like a conversation or a concept. The object
represents the entity that is not meeting a standard or an ideal.
ii. The specific gap on, around, or about the object is known as the deviation
ii. The bent staple
iii. The bruise on the fruit
iv. The uncomfortable nature of the conversation, etc.
Create a problem specification answering the following questions:
Question Is Is Not
What is the object?

What is the deviation?
Where is the defect on the object?

Where is the object when the deviation is first observed?
When is the deviation first observed in clock and calendar time?

When is the deviation first observed in the object’s life cycle?
When, since then, has it been observed? Is there a pattern?
How many objects have the defect?

How many deviations are there on the object?
How big is each deviation?
Is there a trend in the number of occurrences of the deviation?
Is there a trend in the size of the deviation?
Reviewing the problem specification, including both the “Is” and “Is Not”
statements, imagine a number of possible causes. Write each possible cause in a
separate statement. This exercise is not the same as “Brainstorming”, a technique
often associated with problem-solving exercises. Unlike brainstorming, this is not
a free flow of ideas. In this case, your imagination is bounded by the factors
documented in the problem statement, and one or both of the following:
a) The knowledge and experience of the problem-solving team:

Tapping into the knowledge and experience of the members of the project
team, or other experts that might be available, imagine what could have
caused the deviations.
b) Distinctions between the factors in the problem statement, and changes

that are known to have occurred within or shortly before the period
during which the deviations were observed (Kepner & Tregoe, 1965)
To develop your statements of possible cause, applying your team’s accumulated
knowledge and experience, and reflecting on these distinctions and changes, ask
yourself the following questions:
• What about each distinction, or combination of distinctions might suggest
a possible cause?
• How could each change have cause this deviation?
• How could a change plus a distinction have caused this deviation?
• How could a combination of changes have caused this deviation?
Refine each statement of possible cause to be as specific as you can.

Once you have exhausted your imagination creating and refining these
statements of possible cause, begin to evaluate each statement against the
problem specification.
Ask yourself for each statement, if the possible cause is the true cause of the
deviation, how does it explain both the IS and the IS NOT information? For the
possible cause to be the true cause, it must explain all of the IS and IS NOT
statements. List any assumptions you must confirm in order to make the possible
cause fit all of the IS and IS NOT statements.

Having created an explanation of how each possible cause might be the true
cause, it is time to select one as the “the most probable cause”.
Note the phrase “most probable”. This reflects the reality that we are suggesting a
true cause, as opposed to definitively stating a true cause. There is a bit of leeway
here that recognizes the imaginative conjecture that we are entertaining as we
move from the problem statement, a collection of facts, and the statements of
possible cause, that require assumptions, facts not yet in evidence, and
imagination.
We will test our assumptions to confirm the true cause, but testing costs time and
money. For now, we want to prioritize which possible cause to test first so that we
might arrive at the true cause most expeditiously.

In determining which statement describes the most probable cause, ask yourself
which statement best explains both the IS and the IS NOT facts of the problem
statement, with the fewest assumptions.
For example, consider two points on a graph with a horizontal axis for cause, and
a vertical axis for effect. By definition, there is only one line that can pass through
two points on this graph, but there can exist any number of curved lines. Which
would we believe to describe the most probable relationship between cause and
effect represented by those two points? Logic would suggest that the straight line
is the most probable because there are no facts in evidence to support a curved
line, unless we make certain assumptions. The option with the fewest
assumptions, the straight line, is, therefore, the most probable cause.

Confirm that your most probable cause is the true cause by testing it. What can
be done to confirm your assumptions? How can you observe this possible cause
at work? How can you demonstrate the relationship between them?
Note the distinction between problem solving and decision making. The problem
is solved when you determine the most probable cause to be the true cause.
What you do with this information, in terms of eliminating or controlling the
cause, requires decision-making. Albeit subtle, it is an important distinction.
Often the problem solving team only has the mandate to find the cause, but
neither the resources nor the authority to dictate changes to operational policy or
procedure to effect the necessary changes to eliminate or control the cause.

Other Problem Solving Tools
Deming’s PDSA Cycle
Plan - Includes recognizing that a problem exists and identifying objectives;

defining who will be investigating the problem and finding a solution, and how
their success will be measured; and developing the steps of the plan.
Do - Putting the planned experiment into action.
Study – Evaluates the progress and success of the experiment, and areas for
further improvement.
Act - Summarizes the learnings from the study of the implemented plan, from
which a new plan is to be developed.
Other Problem Solving Tools
The 5 Whys
When confronted with an issue, ask a “Why” question 5 times. It is generally

accepted that by the fifth time the question is asked, the root cause should be
revealed. Sometimes this works, and sometimes it doesn’t. Use the technique
when the consequence of being wrong is relatively low. The more expensive the
consequence, the more rigorous should be the problem-solving methodology.
One drawback of the “5 Whys” method is that, for each why question, there may
be many possible causes. Without the ability to analyse the likelihood of each
cause (using distinctions and changes with the IS-IS NOT grid), each cause would
need to be investigated. This is likened to a “Shot Gun Approach”. Spray the area
with activity and hope you get the true cause while implementing a number of
improvements.
Improving the System
To be successful, a business or organization must balance the
needs of these different functional areas:
• Supply chain management
• Marketing
• Accounting
• Human resources
• Operations
• Engineering
• Strategy

Improving the System
A quality system uses the business model with a focus on the
customer, and includes the dynamics of:
• Continual improvement
• Change
• Planning
• Renewal

A Quality System
Figure 10-1

Ishikawa’s Basic Seven Tools of Quality (B7)
• Process maps
• Check sheets
• Histograms
• Scatter plots
• Control charts
• Cause and effect diagrams
• Pareto analysis

Ishikawa’s Basic Seven Tools of Quality (B7)
Logical Map of the Order of the Basic Seven (B7) Tools
Figure 10-2
Based on M. Brassard, The Memory Jogger II, published by GOAL/QPC, 2 Manor Parkway, Salem, New Hampshire,
2004. Reprinted with permission of GOAL/QPC.

Process Maps
• A picture of a process, or map of the process, as it exists
• The following set of symbols is used:
Figure 10-3

Simple Rules for Process Maps
• Use the simple symbols to chart the process from the
beginning, with all arcs in the process map leaving and
entering a symbol.
• The arcs represent the progression from one step to the next.
• Develop a general process map and then fill it out by adding
more detail, or a subflowchart, to each of the elements.
• Step through the process by interviewing those who
perform it – as they do the work.

Simple Rules for Process Maps (cont’d)
• Determine which steps add value and which don’t in an
effort to simplify the work.
• Before simplifying the work, determine whether the work

really needs to be done in the first place.

Home Occupation Process: Current
Figure 10-4

Home Occupation Process: Proposed
Figure 10-5

Steps in Process Mapping
1. Settle on a standard set of process mapping symbols to be
used.
2. Clearly communicate the purpose of the process map to all the
individuals involved in the exercise.
3. Observe the work being performed by shadowing the workers
performing the work.
4. Develop a map of the process.
5. Review the process map with the employees to make needed
changes and adjustments to the process map.
6. Develop a map of the improved process.

SIPOC Diagram
A diagram that is useful when it is not clear who your
customers are, where specifications for inputs exist, and
when clarifying customer requirements.
• Supplier
• Inputs
• Process
• Outputs
• Customers

Example 10-1
• Problem: The well construction unit of a state department of
water resources entered into a multiyear project to update
its database management system. As part of the process, the
well construction staff was asked to document its current
process flows.

Example 10-1
• Solution: The resulting process map is shown in Figure 10-6.
Through a brainstorming process, the well construction team
was asked to rethink its processes to simplify the workflow
and to take advantage of new technology. The team worked
together to develop the new process, which resulted in a
streamlined flow that required less time for drillers to receive
permits.

Example 10-1
Process map with
responsibility of
existing process

Figure 10-6
10-125
Example 10-1
Process map with
responsibility of
existing process
(cont’d)

Figure 10-6 cont.
10-126
A Closer Look at Quality 10-1
• Extended value stream mapping of supply chains
• Customers and suppliers can collaborate to improve supply chains.
• Global Corp metrics:

Global Corp.
Prior-state
extended
value stream
map

Figure 10-7A
10-128
Global Corp.
Ideal-state
extended
value stream
map

Figure 10-7B
10-129
Check Sheets
• Data-gathering tools that can be used to provide data for
histograms
• Can be either tabular, computer-based, or schematic
• Setting up a check sheet:

• Identify common defects occurring in the process.
• Draw a table with common defects in the left column and time period
across the tops of the columns to track the defects.
• The user of the check sheet then places check marks on the sheet
whenever the defect is encountered.

Example 10-2
• Problem: A copying company wants to set up a check sheet
so that it can keep track of error sources.
• Following are the major error types with frequencies:

Example 10-2
• Solution: Figure 10-8 shows
a check sheet for these data.
The check sheet will be kept
to monitor how well
workers are adhering to the
new procedures.
Figure 10-8
Histograms
• Graphical representations of data in bar format
• Used for continuous numerical data and to observe the

shape of the data

Rules for Developing Histograms
• The width of the histogram bars must be consistent.
• The classes must be mutually exclusive and all-inclusive (or
collective exhaustive).
• A good rule of thumb for the number of classes is 2k > n.
• Where n is the number of raw data values and k is the number of
classes
• Solving for k, we obtain k > log n/log 2, therefore:

Example 10-3
• Problem: The Big City Cafeteria
wants to determine the distribution
of its sales during lunchtime. On a
given day, the manager randomly
selects 40 sales from the sales
register receipt. Develop a histogram
of the sales.
• The following table shows the sales
(in dollars).
Example 10-3
• Solution: It is helpful to compute the mean, standard deviation,
maximum value, and minimum value when developing a
histogram because the histogram is often used to determine
whether the data are normally distributed.
• Following are these statistics from the previously given data:
• Mean = 4.20
• Maximum value = 8.95
• Minimum value = .790
• Difference = 8.16
• Sum = 168

Example 10-3
• k > log40/log 2
• k > 5.32
• The number of classes is 6,

therefore:
• Class width = 8.16/6 – 1.36 ~1.40
• Classes: 0.76-2.15, 2.16-3.55, 3.56-
4.95, 4.96-6.35, 6.36—7.75, 7.76-
9.15
Figure 10-9

Scatter Diagrams
• Charts used to examine the relationships between variables; also
called scatter plots.
• Sometimes used to identify indicator variables in organizations.
• Steps to set up a scatter plot:

1. Determine your x (independent) and y (dependent) variables.
2. Gather process data relating to the variables identified in Step 1.
3. Plot the data on a two-dimensional plane.
4. Observe the plotted data to see whether there is a relationship
between the variables.
Scatter Diagrams
Scatter plot of the relationship between conformance data and
prevention and appraisal quality-related costs in a real firm
Figure 10-10

Example 10-4
• Problem: Healthy People, Inc., a company specializing in
home healthcare solutions for U.S. consumers, was a
growing company. The company wanted to study the
relationship between absenteeism and the number of
overtime hours worked by employees. Thirty employees
were randomly selected, and numbers of overtime hours
were graphed against numbers of days absent for the
previous year. (See Figure 10-11.)

Example 10-4

Example 10-4
Figure 10-11

Control Charts
Charts used to determine whether a process will produce a
product or service with consistent measurable properties
Figure 10-12

Cause-and-Effect (Ishikawa Diagrams)
• A tool to help move to lower levels of abstraction in solving
problems
• Looks like the skeleton of a fish

• Problem = Head
• Ribs = Major causes
• Bones = Subcases

Cause-and-Effect (Ishikawa Diagrams)
Steps to create a cause-and-effect diagram:
• State the problem clearly in the head of the fish.
• Draw the backbone and the ribs by asking participants to identify
major causes of the problems labeled in the head of the diagram.
• Continue to fill out the diagram asking “Why?” about each
problem or cause of a problem until the fish is filled out.
• View the diagram and identify core causes.
• Set goals to address the core causes.

Cause-and-Effect Diagram: Wobbling Saw
Blade
Figure 10-13
Reprinted by permission from Patrick Shannon.

Example 10-5
• Problem: A team of employees from the adjudication team
at a department of water resources was assigned to improve
its process. Adjudication is a process of going through the
courts to settle legal disputes, in this case, concerning water
rights. Prior to brainstorming improvements for the process,
the employees were asked to brainstorm some of the causes
of problems with the existing system.
• A fishbone (Ishikawa) diagram was used to help identify the
causes of the problems they were experiencing.
Example 10-5
The fishbone
diagram shows
that three major
areas of concern
are contractors,
region office–
state office
communication,
and database
management.
Figure 10-14
Pareto Charts
• Charts used to identify and prioritize problems to be solved
• Aided by the 80/20 rule, which states that roughly 80% of

the problems are created by 20% of the causes – or there
are a “vital few” causes that create most of the problems

Pareto Charts
• Rules for constructing Pareto charts:
• Information must be selected based on types or classifications of
defects that occur as a result of a process.
• Data must be collected and classified into categories.
• A frequency chart must be constructed, showing the number of
occurrences in descending order.
• Steps in Pareto analysis:
1. Gather categorical data relating to quality problems.
2. Draw a frequency chart of the data.
3. Focus on the tallest bars in the frequency chart first when
solving the problem.

Example 10-6
• Problem: A copying company is concerned because it is
taking too long for operators to set up new printing jobs.
They decide to use Pareto analysis to find out why setup
times are taking so long.
• The data gathered reflect the following major causes:

Example 10-6
• Solution: First, order the problems by frequency and
compute the percentage of problems related to each cause,
and then draw a frequency chart of the results.

Example 10-6
Pareto Chart
Figure 10-15

Spider Charts
Graphs that present
multiple metrics
simultaneously in a
two-dimensional plane
Figure 10-26

Balanced Scorecards
Spreadsheets that are communicated to management on a
regular basis – weekly, monthly, quarterly, and annually
Figure 10-27

Dashboards
Tools that quickly
communicate
performance levels,
with a focus on easy,
clear communication
Figure 10-28

Product Quality
Here is a great tutorial on the subject:
https://www.sciencedirect.com
/topics/engineering/quality-function-deployment
Quality Function Deployment (QFD)
• A method for translating customer

requirements into functional design
• The process of translation is also
called the voice of the customer.
Figure 7-3

7-158
Quality Function Deployment
Step 1 – Develop a list of customer requirements.
Figure 7-4

7-159
Quality Function Deployment (cont’d)
Step 2 – Develop a list of

technical design elements along
the roof of the house.
Figure 7-5

7-160
Step 3 – Demonstrate the relationships between the customer requirements and

technical design elements.
Figure 7-6

7-161
Step 4 – Identify the

correlations between design
elements in the roof of the
house.
Figure 7-7

7-162
Step 5 – Perform a competitive

assessment of the customer
requirements.
Figure 7-8

7-163
Step 6 – Prioritize customer

requirements.
Figure 7-9

7-164
Step 7 – Prioritize technical

requirements.
Figure 7-10

7-165
Step 8 – Perform a final

evaluation.
Figure 7-11

7-166
The Houses of Quality
Figure 7-12

7-167
Works Cited (Blue Slides Only)
Evans, J.R. & Lindsay, W.M. (2015). An introduction to Six Sigma & process improvement (2nd ed.). Stamford, CT: Cengage Learning.
Gorard, S. (2004). Revisiting a 90-year-old debate: The advantages of the mean deviation. Education Online. Retrieved from
http://www.leeds.ac.uk/educol/documents/00003759.htm
Kepner, C.H. & Tregoe, B.B. (1965). The rational manager: A systemmatic approach to problem solving and decision-making.
Princeton, NJ: Kepner-Tregoe, Inc.

BUSD2027 QualityMgmt Module2

Uploaded by

Copyright:

Available Formats

BUSD2027 QualityMgmt Module2

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

BUSD2027 QualityMgmt Module2

Uploaded by

Copyright:

Available Formats

Module 2: Practical Applications

BUSD 2027: Quality Management

Mode – The value which occurs most frequently

Median – The middle value of a range of values

Range – Difference between the highest and lowest value

Normal Distribution (Bell

xbar = average of all values in data set (sample)

xbar = average of all values in data set (sample)

cumulative percent – the

Central limit theorem - distribution of the mean of any independent, random

How to tell whether a

• Statistical thinking is based on three concepts:

Copyright © 2017 Pearson Education, Inc. 11-15

Copyright © 2017 Pearson Education, Inc. 11-16

Copyright © 2017 Pearson Education, Inc. 11-17

Copyright © 2017 Pearson Education, Inc. 11-18

Copyright © 2017 Pearson Education, Inc. 11-19

• Types of process variation:

Copyright © 2017 Pearson Education, Inc. 11-20

Copyright © 2017 Pearson Education, Inc. 11-21

Copyright © 2017 Pearson Education, Inc. 11-22

Copyright © 2017 Pearson Education, Inc. 11-23

• If quality testing is destructive, 100% inspection would be

Copyright © 2017 Pearson Education, Inc. 11-24

• When employees perform their own in-process inspection

Copyright © 2017 Pearson Education, Inc. 11-25

• Rational subgroup samples

Copyright © 2017 Pearson Education, Inc. 11-27

To detect a shift of 1 standard deviation, the number of samples required is:

To detect a shift of 3 standard deviations, the number of samples required is

2. Sample Size – There is a trade-off between cost and information. Small

3. Frequency of Sampling – There is a trade-off between cost and information.

4. Location of Control Limits – Need to avoid incorrectly believing a special cause

(Evans & Lindsay, 2015, p.259-260)

• Required part of an ISO 9000 quality management system

Copyright © 2017 Pearson Education, Inc. 11-30

Copyright © 2017 Pearson Education, Inc. 11-32

Copyright © 2017 Pearson Education, Inc. 11-33

The most common types of variable and attribute charts

Copyright © 2017 Pearson Education, Inc. 11-34

Copyright © 2017 Pearson Education, Inc. 11-35

Copyright © 2017 Pearson Education, Inc. 11-36

Copyright © 2017 Pearson Education, Inc. 11-37

Copyright © 2017 Pearson Education, Inc. 11-38

Copyright © 2017 Pearson Education, Inc. 11-39

Copyright © 2017 Pearson Education, Inc. 11-40

Copyright © 2017 Pearson Education, Inc. 11-41

Copyright © 2017 Pearson Education, Inc. 11-42

Copyright © 2017 Pearson Education, Inc. 11-43

Copyright © 2017 Pearson Education, Inc. 11-44

Copyright ©2016 Pearson Education, Inc. All rights reserved. 1-45

Copyright © 2017 Pearson Education, Inc. 11-48

Copyright © 2017 Pearson Education, Inc. 11-49

Copyright © 2017 Pearson Education, Inc.

Microsoft Excel, Microsoft Corporation. Used by permission.

Copyright © 2017 Pearson Education, Inc. 11-53

Copyright © 2017 Pearson Education, Inc. 11-54

Copyright © 2017 Pearson Education, Inc. 11-55

Copyright © 2017 Pearson Education, Inc. 11-56