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    CHAPTER 9: MANAGING FLOW VARIABILITY: PROCESSCONTROL AND CAPABILITY

    9.1 ObjectiveThis chapter focuses primarily on product quality and process capability, although we try to position it

    more generally as dealing with variability in any product measure such as cost, availability and response

    time. We claim that they all vary from one flow unit to the next, and this variability leads to customer

    dissatisfaction. It is therefore necessary to measure this variability, track down its sources and eliminate

    them.

    In the process of measuring variability, we introduce some elementary tools of quality or process

    improvement such as Pareto charts. We then classify variability into abnormal and normal types.

    We introduce statistical process control over time as a device to identify and eliminate abnormal

    variability in the short run. Since our goal is to teach the fundamental framework of feedback control and

    control limit policy, our discussion of SPC is primarily conceptual, without getting into constructing

    charts from given data using ranges, constants, etc. However, these details can easily be covered bysupplementing the chapter with a one page handout on estimating the mean and standard deviation from

    ranges.

    Once the process is internally stabilized by removing abnormal variability, we can discuss its capability in

    meeting external customer requirements, and how it can be improved. We conclude by discussing six

    sigma quality and some general principles of design for manufacturability and robust design. We have

    also discussed general TQM philosophy and Malcolm Baldrige award framework.

    9.2 Additional Suggested Readings

    We have used in the past someHBR articles andHBScases to discuss principles of TQM, when it was a

    hot topic in 1980s. For example, the following two go well together.

    Incline of Quality by F. Leonard and W. Sasser, Sept-Oct 1982. Hank Kolb: Director Quality Assurance. HBSCase 681-083, 1981. Author: F. Leonard

    Suggested assignment questions:

    1. What can you say about the quality attitude in this company?2. What seem to be the causes of the quality problem on the Greasex line?3. What can top management do to remedy the situation?As TQM lost its appeal, most of us have moved away from teaching it, although some of us still include

    at least part of it in our course. Given its qualitative and fuzzy nature, it has been received with mixed

    success. More in line with this book, however, we have continued to teach the SPC tools. In the past we

    developed some data for the Hank Kolb case to illustrate the SPC tools that we have illustrated in this

    book using the MBPF example. We have also used the following service oriented case that one of us has

    developed for this purpose. Excel Logistics Services,KelloggCase 2001. Author: Sunil Chopra. Six Sigma Quality at Flyrock Tires,KelloggCase 2002. Author: Sunil Chopra. Quality Wireless (A and B),KelloggCase 2005. Author: Sunil Chopra.

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    9.3 Solutions to the Problem Set

    Problem 9.1

    a. Given the symmetric shape of normal distribution around its mean, maximum conformance of theoutput within the given specifications will be achieved by centering the process at the midpoint of

    the specifications, i.e., at = 32.5 gms. Now if we desire 98% of the output to conform to the

    specifications, it means that only 2% can fall outside the specs. Given a centered process and the

    symmetry of the normal distribution, this means only 1% below lower spec and 1% above upper

    spec. Thus, from the Normal tables (single-sided at 1%), the specification limits should bez= 2.33

    standard deviations on either side of the mean, i.e., (32.5 - 30)/= 2.33, or= 2.5/2.33 = 1.073

    gms. The sigma-capability of this process is 2.33. The corresponding process capability ratio is Cp

    = (35- 30)/6= (35-30)/(6*1.073) = 0.78.

    b. With n = 12, and = 1.073 as above, we can now determine the ideal control limits on subgroupaverages of 12 bottles as:Average control chart: 3 / n = 32.5 (3)(1.073)/ 12 = (31.57, 33.34)

    Problem 9.2

    a. In order to produce 98% of the boxes above 15.5 oz., the process mean must bez= 2.055 standarddeviations above 15.5, i.e., = 15.5 + (2.055)(0.5) = 16.53 oz.

    If= 16.53, then the proportion of overweight boxes will be

    P(X> 16) = P[Z> (16-16.53)/0.5] = P(Z> -1.06) = 0.8554.

    b. With = 16.53, = 0.5, and n = 9, the control limits on the average weight in a sample of 9 boxesare: + 3 / 9 = (16.03, 17.03). The observed average of 15.9 is below the lower control limit of

    16.03, which signals that the mean has shifted below 16.53 due to an assignable cause. They

    should stop the process and adjust the mean upward. That the average weight is above the

    minimum individual weight of 15.5 oz is irrelevant. The specifications are on weights of individual

    boxes, not on average weights.

    c. The FDA specifications require at least 15.5 ozs per box. To be a 6-sigma process, the fillingprocess must produce output centered at a mean of and a standard deviation of, where (-15.5)/

    = 6. This can be achieved for many different values of and . In particular, = 16.1 and = 0.1

    results in a 6-sigma process.

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    Problem 9.3

    From the 26 observations given, we can calculate the average number of errors per thousand transactions

    m = 3.3077, which is much better than the industry average = 15. a. We can then determine the control

    limits on the number of errors, assuming Poisson distribution, as m 3 m = (0, 8.75). b. Observe thatthree observations out of the 26 given exceed the UCL = 8.75. Hence, the process is notin control, even

    though on average it is better than the BAI standard! The process is not stable, and our estimate ofm is

    not reliable. We first need to stabilize the process by removing assignable causes.

    Problem 9.4

    a. If the process mean = 515, standard deviation= 5 gms, and sample size n = 25, Control limitsareLCL = 25 = 512 gms and UCL = 25 = 518 gms

    b. Proportion of underweight output isProb(W< 500) = Prob [Z< (500515) / 5] = Prob (Z 0.992, the banks requirement

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    Problem 9.8

    IfD is the diameter of basketballs produced, we need 95% of diameters to fall between 29.3 and 29.7.

    Given a centered process and the symmetry of the normal distribution, this means only 2.5% below lower

    spec and 2.5% above upper spec. Thus, from the Normal tables (single-sided at 2.5%), the specificationlimits should bez= 1.96 standard deviations on either side of the mean

    Soz= (29.729.5) / = 1.96 or we need = .2/1.96 = 0.102. inch .

    Hence, Cp = (USL LSL)/6 = (29.7 29.3)/6 = 0.65.

    Please note that the Selected Answer at the end of the text erroneously corresponds to requiringthat 98% of the ball diameters should fall between 29.3 and 29.7 inches.

    Problem 9.9

    a. False. Control limits only assure process stability. They have nothing to do with meetingcustomer specifications.

    b. True. As sample size increases, standard deviation of sample averages decreases, and the controlbands becomes narrower.

    c. True. If control limits are 3 standard deviations from the mean, the probability of sample averagefalling outside control limits is 0.27%, regardless of the value of the standard deviation.

    d. If the process improves sigma capability, its standard deviation goes down, and the width of thecontrol band decreases.

    e. False. A 6-sigma process may be out of control if an assignable cause leads to a mean shift (forinstance). A 6-sigma process, however, is likely to produce very few defectives even when it is

    out of control. Thus, a 6-sigma process has the advantage of detecting small shifts even before

    they impact the customer.

    Problem 9.10

    a. R chart andX-bar chartb. p chartc. c chartd. c charte. R chart andX-bar chartf. c chart

    9.4 Test Questions

    9.4.1. You are a manager with nine employees reporting directly to you. (You have full span of

    control.) All nine employees have essentially the same responsibilities. They all have numerous

    opportunities to make mistakes (of various types) in their jobs, but only a small chance of makingany one particular mistake at any one time. In the past year you have recorded the following

    number of mistakes for each employee. Assume that all mistakes are equally critical, so that you

    cannot distinguish between employees based on the type of mistake they make.

    Employee 1 2 3 4 5 6 7 8 9

    No. of Mistakes 10 15 11 5 17 22 11 12 10

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    It is time for evaluations and merit raise recommendations. Suggest an approach (you do not have

    to show any computations) to decide who to reward and who to penalize? Assume that the total

    number of transactions performed by each employee are the same during the year.

    Answer: You should construct appropriate control limits based on the data available. For

    example, with this data, assuming Poisson distribution of errors, mean = variance = 12.55. Socontrol limits are: 12.55 + 3 Sqrt (12.55) = (1.92, 23.18) Employees with error rates above the

    upper control limit or below the lower control limit would be asked for abnormal causes of

    variation. Effort should be made to eliminate assignable errors above the UCL and replicate

    assignable errors below the LCL. All employees with error rates within control limits should be

    treated equally. In this case, all employees seem to display normal variability, so take no action.

    In the long run, you should try to reduce the mean of 12.55 through better training, and mistake-

    proofing the process.

    9.4.2 A customer wants delivery to be ensured between 10 am and 2 pm. Your truck leaves the factory at 4 am

    and the time taken to reach the customer is normally distributed with an average of 8 hrs and a standard

    deviation of 1 hr.

    (a) What is the process capability ratio of the process?

    0.67 0.50 1.00 2.00 None of the aboveAnswer: Cp = (USLS)/6 = 4/6 = 0.67

    (b) What specific action(s) (in terms of mean and standard deviation targets to be achieved)

    would you take to improve the ability of the delivery process to be a 6- process (like

    Motorola)?

    Target mean =

    Answer: Same as before

    Target standard deviation =

    Answer: = 1/3 will yield Cp = 2, which corresponds to six sigma quality. To reduce the

    standard deviation, use interstate highways to avoid unforeseen traffic jams and lights. Get good,

    reliable trucks, reduce travel distance (which also affects the mean), improve driver training, etc.

    9.4.3 An assembly process has twenty successive stages, each with 3- capability. The company has

    come up with a new design that will require only ten assembly stages. The capability at each

    stage still remains 3-. The overall assembly process capability with the new design will be

    Higher than the original design.

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    Same as the original design. Lower than the original design.

    Answer: Higher. Reducing the number of stages reduces the overall variability and improves

    process capability.

    9.4.4 A machine produces drive shafts. Manufacturing currently takes samples of 10 shafts every half

    an hour to check if the process is in control. Control limits have been set at 3 standard

    deviations of the sample means and are set at 10 30.001 cm. A suggestion calls for control

    limits to be tightened to 2 standard deviations, i.e., 10 20.001 cm. As a result the proportion

    of shafts produced that are defective (outside specification limits) will

    (i) Increase(ii) Decrease(iii) Remain unchangedAnswer: Remain unchanged

    Explain.

    Answer: Decreasing control limits increases the number of investigations to check whether the

    process is still behaving according to its distribution. This does not imply anything about meeting

    customer specification limits; we will simply be investigating more frequently.

    [As a second order effect, one can argue that a possible process change - getting out of control - is

    detected earlier, and hence, fewer defects would be produced.]

    9.4.5 K-Log produces cereals that are sold in boxes labeled to contain 390 grams. If the cereal content

    is below 390 grams, K-Log may invite FDA scrutiny. Filling much more than 390 grams costs the

    company since it essentially means giving away more of the product. Accordingly, K-Log has setspecification limits between 390 and 410 grams for the weight of cereal boxes. Currently the

    boxes are filled automatically by a filling machine and they have an average weight of 405 g with

    a standard deviation of 4 g. What process targets (in terms of mean and standard deviation of the

    filling process) are needed for the filling machine to have a six- capability?

    Answer: We need to center the process at the middle of the specs, i.e., at 400 gms. To yield six

    sigma quality the standard deviation must be (400-390)/6 = 1.67 gms