TOPIC 10

Quality Control

Intended Learning Outcomes

 Discuss the basic issues of inspection

 List and briefly explain the elements of control process
 Explain how control charts are used to monitor a process and the concepts that
underlie their use.
 Assess process capability

Introduction

This topic covers quality control. The purpose of quality control is to assure that
processes are performing in an acceptable manner. Companies accomplish this by
monitoring process output using statistical techniques. Quality control is a process that
measures output relative to a standard and stakes corrective action when output does
not meet standards. If the results are not acceptable, no further action is required;
unacceptable results call for corrective action.

Every process generates output that exhibits random variability. This is natural and
cannot be corrected. However, if there are nonrandom variations in process output,
that can be corrected. Quality control tools are used to decide when corrective action is
needed.

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Acceptance sampling- quality assurance that relies primarily on inspection of lots
(batches) of previously produced items.
Statistical process control- quality control efforts that occur during production
The best companies emphasize designing quality into the process, thereby greatly
reducing the need for inspection or control efforts.

INSPECTION
Inspection - is an appraisal activity that compares goods or services to a standard.
Inspection is vital but often unappreciated aspect of quality control. In lean
organizations, inspection is less of an issue than it is for other organizations because
lean organizations place extra emphasis on quality in the design of both products and
processes. Inspection can occur at 3 points: before production, during production, and
after production.

The logic of checking conformance before production is to make sure that inputs are
acceptable.
The logic of checking conformance during production is to make sure that the
conversion of inputs into outputs is proceeding in an acceptable manner.
The logic of checking conformance of output is to make a final verification of
conformance before passing goods on to customers.

Inspection before and after production often involves acceptance sampling procedures;
monitoring during the production process is referred to as process control.

How Much to Inspect and How Often

The amount of inspection can range from no inspection whatsoever to inspection of
each item numerous times.
Low cost, high volume items such as paper clips, roofing nails and wooden pencils often
require little inspection because (1) the cost associated with passing defective items is
quite low, (2) the processes that produce these items are usually highly reliable so
defects are rare.
High cost, low volume items that have large costs associated with passing defective
products often require more intensive inspections.
In high-volume systems, automated inspection is one option that may be employed.

Where to Inspect in the Process

1. Raw materials and purchased parts. There is little sense in paying for goods
that do not meet quality standards and in expending time and effort on material
that is bad to begin with. Supplier certification programs can reduce or eliminate
the need for inspection.
2. Finished products. Customer satisfaction and the firm’s image are at stake
here, and repairing or replacing products in the field is usually much more costly
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 than doing it at the factory. Likewise, the seller is usually responsible for shipping
costs on returns, and payments for goods or service may be held up pending
delivery of satisfactory goods or remedial service. Well-designed processes,
products and services, quality at the source, and processes monitoring can
reduce or eliminate the need for inspection.
3. Before a costly operation. The point is not to waste costly labor or machine
time on items that are already defective.
4. Before an irreversible process. In many cases, items can be reworked up to
a certain point; beyond that point they cannot. For example, pottery can be
reworked prior to firing. After that, defective pottery must be discarded or sold
as seconds at a lower price.
5. Before a covering process. Painting, plating, and assemblies often mask
defects.

Centralized versus On-site Inspection

Some situations require that inspections be performed on site. At other times,
specialized tests can best be performed in a lab. The central issue in the decision
concerning on-site or lab inspections is whether the advantages of specialized lab
tests are worth the time and interruption needed to obtain the results. Reasons
favoring on-site inspection include quicker decisions and avoidance of
introduction of extraneous factors. On the other hand, specialized equipment and
a more favorable test environment offer strong arguments for using a lab.
Some companies rely on self-inspections by operators if errors can be traced
back to specific operators. This places responsibility for errors at their source.

STATISTICAL PROCESS CONTROL

Quality of conformance- a product or service conforms to specifications
Statistical process control (SPC) – is used to evaluate process output to decide if a
process is “in control” or if corrective action is needed.

Process Variability
All process generate output that exhibits some degree of variability. The issue is
whether the output variation is within acceptable range. The issue is addressed by
answering two basic questions about process variation:
1. Are the variations random? If nonrandom variations are present, the process is
considered to be unstable. Corrective action will need to be taken to improve the
process by eliminating the causes of non-randomness to achieve a stable
process.

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 2. Given a stable process, is the inherent variability of process output within a
range that conforms to performance criteria? This involves assessment of a
process’s capability to meet standards. If a process is not capable, that situation
will need to be addressed.

Random variations- the natural or inherent process variation in process output is

referred to as chance or random variations. Such variations are due to combined
influences of countless minor factors. In Deming’s terms, this is referred to as common
variability.
Assignable Variation - or nonrandom variation, a second kind of variability in process
output. In Deming’s terms, this is referred to as special variation. Unlike natural
variation, the main sources of assignable variation can usually be identified.

Sampling and sampling distribution

Sampling Distribution - a theoretical distribution that describes the random variability of
sample statistics.
Central limit theorem – states that as the sample size increases, the distribution of
sample averages approaches a normal distribution regardless of the shape of the
sampled population.
The control process

Sampling and corrective action are only a part of the control process. Effective control
requires the following steps:
Define. The first step is to define in sufficient detail what is to be controlled. It is not
enough, for example, to simply refer to painted surface. Different characteristics may
require different approaches for control purposes.
Measure. Only those characteristics that can be counted or measured are candidates
for control. Thus, it is important to consider how measurement will be accomplished.
Compare. There must be a standard of comparison that can be used to evaluate the
measurements. This will relate to the level of quality being sought.
Evaluate. Management must establish a definition of out of control. Even a process
that is functioning as it should will not yield output that conforms exactly to a standard,
simply because of the natural variations inherent in all process, manual or mechanical, a
certain amount of variation is inevitable. The main task of quality control is to
distinguish random from non-random variability, because nonrandom variability means
that a process is out of control.
Correct. When a process is judged to be out of control, corrective action must be
taken. This involves uncovering the cause of nonrandom variability and correcting it.
Monitor results. To ensure that corrective action is effective, the output of a process
must be monitored for a sufficient period of time to verify that the problem has been
eliminated.
In sum, control is achieved by checking a portion of the goods or service, comparing
the results to a predetermined standard, evaluating departures from the standard,

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taking corrective action when necessary, and following up to endure that problems have
been corrected.

Control Charts: The Voice of the Process

An important tool in statistical process control which was developed by Walter
Shewhart. A control chart is a time-ordered plot of sample statistics. It is used to be
distinguishing between random variability and non-random variability. It has upper and
lower limits, called control limits that define the range of acceptable variation for the
sample statistic. The purpose of a control chart is to monitor process output to see if it
is random. A necessary condition for a process to be deemed “in control”, or stable, is
for all the data points to fall between the upper and lower control limits. A data point
that falls outside of either limit would be taken as evidence that the process output may
be nonrandom and, therefore, not “in control”. If that happens, the process output
would be halted to find and correct the cause of non-random variation. The essence of
statistical process control is to assure that the output of a process is random so that
future output will be random.

Control limits - The dividing lines between what will be designed as random deviations
from the mean of the distribution and what will be designated as non-random deviation
from the mean of the distribution.
Control charts have two limits that separate random variation and non-random
variation. The larger value is the upper control limit (UCL) and the smaller value is the
lower control limit (LCL).

Type I error - where the error is concluding that non randomness is present when only
randomness is present. It is also referred to as an alpha risk, where alpha is the some
of the probabilities in the two tails.

Type II error - Concluding that a process is in control when it is really out of control,
concluding non random variations are not present when they are.
There are 4 commonly use control chart. Two are used for variables and two are used
for attributes. Attribute data or counted, variables data are measured.

Control Charts for Variables

Mean and range charts are used to monitor variables. Control charts for means monitor
central tendency of a process, and range charts monitor the dispersion of a process.
Mean Charts. A mean control chart sometimes referred to as an X or “X Bar” chart is
base on a normal distribution. It can be constructed in one of two ways.
Range chart. Range control charts or R-Chart are used to monitor process dispersion,
they are sensitive to changes in process
Using mean and range charts. Mean control charts and range control charts provide
different perspective on a process. Mean Charts are sensitive to changes in the process
mean, whereas range chart are sensitive to changes in process dispersion.

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Control charts for attributes
Control charts for attributes are used when the process characteristic is counted rather
than measured. There are two types of attribute control chart, one for the fraction of
defective items in sample (p-chart) and one for the number of defects per unit (c-
chart).
p-chart. A p-chart is used to monitor the proportion of defective items generated by a
process. The theoretical basis for a p-chart is the binomial distribution, although for
large sample sizes, the normal distribution provides a good approximation to it. A p-
chart is constructed and used in much the same way as mean chart.
c-chart- When the goal is to control the number of occurrences per unit, a c-chart is
used. The underlying sampling distribution is the Poisson distribution. Use of the
Poisson distribution assumes that defects occur over some continuous region and that
the probability of more than one defect at any particular point is negligible.

Managerial Considerations Concerning Control Charts

Using control charts adds to the cost and time needed to obtain output. Ideally a
process is so good that the desired level of quality could be achieved without the use of
any control charts. The best organizations strive to reach this level, but many are not
yet there, so they employ control charts at various points in their process.

Run Tests

Control charts test for points that are too extreme to be considered random. However,
even if all points are within the control limits, the data may still not reflect a random
process.

Run - sequence of observations with a certain characteristics, followed by one or more

PROCESS CAPABILITY

Variablity of a process becomes the focal point of the analysis.

Three commonly used terms refer to the variability of process output.
Specification or Tolerances are established by engineering design or customer
requirements. They indicates a range of values in which individual units of output must
fall in order to be acceptable.

Control limits are statistical limits that reflect the extent to which sample statistics
such as means and ranges can vary due to randomness alone.

Process variability reflects the natural or inherent variability in a process. It is

measured in terms of the process standard deviation.
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Control limits and process variability are directed related because control limits are
based on sampling variability, and sampling variability is a function of process
variability. There is no direct link between specifications and either control limits or
process variability. They are specified in terms of output of a product or service, not in
terms of the process by which the output is generated.
In a given instance, the output of a process may or may not conform to specifications
even though the process may be statistically in control. That is why it is also necessary
to take into account capability of a process. The term
process capability refers to the inherent variability of process output relative to the
variation allowed by the design specifications.

Capability Analysis
Capability analysis is performed on a process that is in control for the purpose of
determining if the range of variation is within design specifications that would make the
output acceptable for its intended use. If it is within the specifications, the process is
said to be “capable” if it is not, the manager must decide how to correct the situation.
In other words, the process could be in control and still generate unacceptable output.
We cannot automatically assume that a process that is in control will provide desired
output. Instead, we must specifically check whether a process is capable of meeting
specifications and not simply set up a control chart to monitor it.
A process should be both in control and within specifications before production begins.
Obviously, process variability is a key factor in process capability. It is measured in
terms of the process standard deviation.

Bill Smith "The Father of Six Sigma". He introduced this quality improvement
methodology to Motorola. Six sigma is a set of the techniques and tools for process
improvement. It was developed by Motorola in 1986.

Improving process capability

Requires the changing the process target value and/or reduces the process variability
that is inherent in a process.
This might involve simplifying, standardizing, making the process mistake-proof,
upgrading equipment, or automating.
Take note!
 Improved process capability means less need for inspection, lower warranty
costs, fewer complaints about service, and higher productivity.
 For process control purposes, it means narrower control limits.

Taguchi Loss Function

Genichi Taguchi, a Japanese quality expert, holds a non-traditional view of what
constitutes poor quality, and hence the cost of poor quality. The traditional view is that
as long as output is within specifications, there is no cost.
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Limitations of Capability Indexes
There are several risks using capability index:
1. The process may not be stable, in which case a capability index is meaningless.
2. The process output may not be normally distributed, in which case inferences
about the fraction of output that is an acceptable will be incorrect.
3. The process is not centered but Cp index is used , giving a misleading result.

OPERATION STRATEGY

Quality is a major consideration for virtually all customers, so achieving and maintaining
quality standard is a strategic importance to all business organizations. Quality
assurance and product and service design are two vital links in the process.
Organization should continually seek to increase the capability of the processes they
use, so that they can move from a position of using inspection or extensive use of
control charts to achieve desired levels of quality to one where quality is built into
products and processes, so that little or no effort is needed to assure quality. Processes
that exhibit evidence of nonrandomness, or processes that are deemed to not be
capable, should be viewed as opportunities for continuous process improvement.

TOPIC TERMINOLOGIES

Quality Control – A process that evaluates output relative to a standard and takes
corrective action when output doesn’t meet standards.
Inspection – Appraisal of goods or services
Quality of conformance – a product or services to conforms to specifications.
Statistical process control (SPC)– Statistical evaluation of the output of a process.
Random Variation – Natural variation in the output of a process, created by countless
minor factors.
Assignable variation – In process output, a variation whose cause can be identified. A
nonrandom variation.
Sampling distribution – A theoretical distribution of sample statistics.
Cental limit theorem – The distribution of sample averages tends to be normal
regardless of the shape of the process distribution.
Control chart – A visual tool for monitoring forecast errors.
Control limits – The dividing lines between random and nonrandom variations from the
mean of the distribution.
Type I error – concluding a process is not in control when actually is.
Type II error – concluding a process is in control when it is not.
Variables – Generate data that are measured
Attribute – Generate data that are counted.
Mean control chart – control chart used to monitor the central tendency of a process.
Range control chart – Control chart used to monitor process dispersion.
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p-chart – control chart for attributes, used to monitor the proportion of defective items
in a process.
c-chart - control chart for attributes, used to monitor the number of defects per unit.
Run test – A test for pattern in a sequence.
Run – sequence of observations with a certain characteristics.
Specifications – A range of acceptable values established by engineering design or
customer requirements.
Process variability – Natural or inherent variability in a process.
Process capability – The inherent variability of process output relative to the variation
allowed by the design specification.
Process index – Used to assess the ability of a process to meet specifications.

Announcement/pointers

What : Final exam

Subject : Operations Management
When : To be posted (as per school calendar)
Coverage : Topic 7, 8, 9. & 10
Type of Exam : Multiple choices
No. of items : 50

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