8/9/2019 Chapter 01 Quality Control
1/40
Chapter 1
Fundamentals of QualityGitlow, Oppenheim, Oppenheim and Levine
8/9/2019 Chapter 01 Quality Control
2/40
Chapter 1Fundamentals of Quality
Learning ObjectivesUnderstand the definition of a processUnderstand variation and its causes in a processSpecial causes of variation
Common causes of variationUnderstand the two definitions of qualityGoal post viewContinuous improvement view
Understand the quality environment
8/9/2019 Chapter 01 Quality Control
3/40
Chapter 1Fundamentals of Quality
Learning ObjectivesUnderstand the three types of qualityQuality of design or redesignQuality of conformanceQuality of performance
Understand the relationship between Quality and CostFeatures and priceUniformity and dependability
Understand the relationship between Quality and ProductivityUnderstand the benefits of improving quality
Know how to apply take-away knowledge
8/9/2019 Chapter 01 Quality Control
4/40
Process Basics
Definition of a processA process is a collection of interacting components
that transform inputs into outputs toward a commonaim called a mission statement.
Manpower
Equipment
Materials/Goods
Methods
Environment
Inputs
Transformation ofinputs, value (time,place, form) is addedor created
Process
ManpowerEquipment
Materials/Goods
Methods
Environment
Outputs
8/9/2019 Chapter 01 Quality Control
5/40
Definition of a process
It is managements job to optimize the entireprocess toward its aim.
This may require the sub-optimization of selectedcomponents of the process.
8/9/2019 Chapter 01 Quality Control
6/40
Definition of a ProcessProcesses exist in all facets of organizations and
our understanding of them is crucialAdministrationSales and serviceHuman resources
MaintenanceCommunicationProduction
Relationships between people are processesAll processes can be studied, documented, defined,
improved, and innovated
8/9/2019 Chapter 01 Quality Control
7/40
Definition of a processAn organization is a multiplicity of micro sub-
processes, all synergistically building to the macro
process of that firm.
All processes have customers and suppliers; thesecustomers and suppliers can be internal or externalto the organization.
8/9/2019 Chapter 01 Quality Control
8/40
Variation in a Process
The outputs from all processes and theircomponent parts vary over time.
Time
Num
ber
of
Accidents
Actual Values(Variation amongactual values)
Ideal Value = 0
Variation between Ideal and Actual Values
8/9/2019 Chapter 01 Quality Control
9/40
Variation in a processSpecial causes of variation are due to events
external to the usual functioning of a system.Examples could include (if they are not part of the system):New raw materialsA drunk employeeA new operator
8/9/2019 Chapter 01 Quality Control
10/40
Variation in a processCommon causes of variation are due to the
process itself.Process capability is determined by inherent
common causes of variation.
Examples of common causes of variation include:Hiring, training and supervisory practicesLightingStress
Management stylePolicies and proceduresDesign of products or services
8/9/2019 Chapter 01 Quality Control
11/40
Variation in a processEmployees cannot control a common cause of
variation and should not be held accountable for, orpenalized for, its outcomes.
Managers must realize that unless a change is
made in the process (which only they can make) theprocesss capability will remain the same.
8/9/2019 Chapter 01 Quality Control
12/40
Process Basics
Workshop:The Drunk Employee
8/9/2019 Chapter 01 Quality Control
13/40
More About the Feedback LoopA feedback loop relates information about outputs
from any stage or stages back to another stage orstages so that an analysis of the process can bemade.
Input Process Output
Feedback Loop
8/9/2019 Chapter 01 Quality Control
14/40
More About the Feedback Loop
There are three feedback loop situations
no feedback loopspecial cause only feedback loopspecial and common cause feedback loop
8/9/2019 Chapter 01 Quality Control
15/40
DEFINITION OF QUALITY
Goal Post View
Continuous Improvement View
8/9/2019 Chapter 01 Quality Control
16/40
Goal post view
Conformance to valid customer requirements, thatis, as long as an output fell within acceptable limits,called specification limits, around a desired value,called the nominal value (denoted by m), or
target value, it was deemed conforming, good, oracceptable.
8/9/2019 Chapter 01 Quality Control
17/40
Definition of Quality
No
Good,
Loss
No
Good,
Loss
Loss
Good,
No Loss
LSL USLNominal
QualityCharacteristic
m
8/9/2019 Chapter 01 Quality Control
18/40
Goal post view (example)The desired diameter of stainless steel ball
bearings is 25 mm (the nominal value).A tolerance of 5 mm above or below 25 mm is
acceptable to purchasers.Thus, if a ball bearing diameter measures between
20 mm and 30 mm (inclusive), it is deemedconforming to specifications.If a ball bearing diameter measures less than 20
mm or more than 30 mm, it is deemed notconforming to specifications, and is scrapped at a
cost of $1.00 per ball bearing.
8/9/2019 Chapter 01 Quality Control
19/40
Continuous Improvement ViewQuality is a predictable degree of uniformity and
dependability, at low cost and suited to the market.Losses begin to accrue as soon as a qualitycharacteristic of a product or service deviates fromthe nominal value.As with the goal post view of quality, once the
specification limits are reached the loss suddenlybecomes positive and constant, regardless of thedeviation from the nominal value beyond thespecification limits.
8/9/2019 Chapter 01 Quality Control
20/40
8/9/2019 Chapter 01 Quality Control
21/40
Continuous improvement viewL(y) = k(y-m)2 = loss of deviating (y-m) units from
the nominal value of my= the value of the quality characteristic for a
particular item of product or servicem = the nominal value for the quality characteristic
k = a constant, A/d2
A = the loss (cost) of exceeding specification limits(e.g., the cost to scrap a unit of output)d = the allowable tolerance from m that is used to
determine specification limits.
8/9/2019 Chapter 01 Quality Control
22/40
Continuous improvement viewUnder the Taguchi Loss Function the
continuous reduction of unit-to-unit variation
around the nominal value is the mosteconomical course of action, absent capitalinvestment
8/9/2019 Chapter 01 Quality Control
23/40
Continuous improvement view (example)Returning to the production of stainless steel ball
bearings. Every millimeter higher or lower than 25mm causes a loss that can be expressed by thefollowing Taguchi loss function:
L(y) = k(y-m)2 = (A/d2)(y-m)2 = ($1.00/5mm2)(y-25mm)2= (.04)(y-25mm)2
8/9/2019 Chapter 01 Quality Control
24/40
Diameter of Ball Bearing (y) Value of Taguchi LossFunction L(y)
18 1.00
19 1.00
20 1.00
21 0.64
22 0.36
23 0.16
24 0.04
25 0.00
26 0.16
27 0.36
28 0.6429 1.00
30 1.00
31 1.00
32 1.00
8/9/2019 Chapter 01 Quality Control
25/40
The Quality EnvironmentThe pursuit of quality requires that organizations
globally optimize theirsystem of interdependentstakeholders.
This system includes employees, customers,
investors, suppliers and subcontractors,regulators, the environment, and the community.
8/9/2019 Chapter 01 Quality Control
26/40
Employees are the most critical stakeholdersof an organization.
According to quality expert Kaoru Ishikawa:In management, the first concern of thecompany is the happiness of people who areconnected with it. If the people do not feel
happy and cannot be made happy, thatcompany does not deserve to exist. . . Thefirst order of business is to let the employeeshave adequate income. Their humanity must
be respected, and they must be given anopportunity to enjoy their work and lead ahappy life.
8/9/2019 Chapter 01 Quality Control
27/40
Types of Quality
There are three types of quality:Quality of design / redesignQuality of conformanceQuality of performance
The above types of quality create the neverending spiral of continuous improvement ofproducts, services or processes
8/9/2019 Chapter 01 Quality Control
28/40
Quality of design
Quality of design / redesign focuseson determining the qualitycharacteristics of products that aresuited to the needs and wants of amarket, at a given cost; that is, qualityof design develops products from a
customer orientation.
8/9/2019 Chapter 01 Quality Control
29/40
Quality of design / redesignQuality of design studies begin with consumer
research, service call analysis, and sales callanalysis, and lead to the determination of a productconcept that meets the consumers needs andwants.Next, specifications are prepared for the product
concept.
8/9/2019 Chapter 01 Quality Control
30/40
Quality of conformanceQuality of conformance is the extent to which a
firm and its suppliers can produce products with apredictable degree of uniformity and dependability,at a cost that is in keeping with the qualitycharacteristics determined in a quality-of-design
study.The ultimate goal of process improvement and
innovation efforts is to create products and serviceswhose quality is so high that consumers (bothexternal and internal) extol them.
8/9/2019 Chapter 01 Quality Control
31/40
Quality-of-performance
Quality of performance studies focus on
determining how the quality characteristicsdetermined in quality-of-design studies, andimproved and innovated in quality-of-conformancestudies, are performing in the marketplace.
The major tools of quality-of-performance studiesare consumer research and sales/service callanalysis.These tools are used to study after-sales service,
maintenance, reliability, and logistical support, aswell as to determine why consumers do notpurchase the companys products.
8/9/2019 Chapter 01 Quality Control
32/40
Relationship between
Quality and CostFeatures and PriceFeatures and price determine whether a consumer
will initially enter a market segment; hence featuresand price determine market size.Dependability and uniformity determine a products
success, and therefore its market share, within amarket segment.
8/9/2019 Chapter 01 Quality Control
33/40
Generally, products or services with more featuresor fancier features have higher costs to themanufacturer and higher prices to the consumerthan products or services with fewer or simpler
features.
8/9/2019 Chapter 01 Quality Control
34/40
8/9/2019 Chapter 01 Quality Control
35/40
Dependability and UniformityUniformity and dependability create an inverse
relationship between quality and cost. When thedegree of uniformity and dependability of a productis high, the quality of the product is high, and theoverall cost to both the manufacture and the
consumer is less.This relationship is explained by the Taguchi Loss
Function.
1 5 R l ti hi b t
8/9/2019 Chapter 01 Quality Control
36/40
1.5 Relationship betweenQuality and Cost
8/9/2019 Chapter 01 Quality Control
37/40
ConclusionManagers must balance the cost of having many
market segments with the benefits of highconsumer satisfaction caused by small deviationsbetween an individual consumers needs and theproduct characteristic package for his market
segment. Also, managers must continually strive toreduce variation in product characteristics for allmarket segments.
8/9/2019 Chapter 01 Quality Control
38/40
8/9/2019 Chapter 01 Quality Control
39/40
Stressing productivity often has the oppositeeffect of what management desires
Managements ability to improve the processresults in a decrease in defectives, yielding anincrease in good units, quality, and productivity
8/9/2019 Chapter 01 Quality Control
40/40
Benefits of Improving Quality
Several benefits result from improving a process:rework decreasesproductivity risesquality improvescost per good unit is decreasedprice can be cutworkers morale goes up because they are not seen as the
problem. This last aspect leads to further benefits: less employee absenteeism less burnout,more interest in the job increased motivation to improve work.
This is called the chain reaction of quality