Transcript Quality tools for process management MGT 655 Operations and Quality Management

Quality tools for
process management
MGT 655
Operations and Quality Management
Dr. Coty Keller
St. Joseph’s College
Contents of this presentation

How these concepts
fit in the total quality
framework
 8 Cool tools
 Summary &
Conclusion
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Management - Dr. Coty Keller
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How does this fit into the
framework for total quality?


Leadership and strategic planning
Management of
1. Customer and supplier relationships
2. Human resources
3. Processes
4. Data and information
This presentation is about tools for managing
processes, data & information
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8 Cool tools for managing
process
1.
2.
3.
4.
5.
6.
7.
8.
Cause-and-effect (fishbone),
Flow chart,
Check Sheet (checklist)
Pareto chart,
Bar chart (histogram)
Run (trend) chart,
Scatter diagram
Control chart (SPC chart)
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Fishbone (Cause & Effect)
Diagram

Useful for any problem (the Head of the fish
is the Problem) if everyone is involved
 Brainstorming by ALL concerned is
essential
 Categorize by general potential causes (the
Bones of the fish)
 Goal = identify likely Specific causes (the
Ribs) that can be attacked and corrected
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Cause-and-Effect
Diagrams
Machines
Personnel
Effect
Materials
Process
Checker Board Airlines
Personnel
Equipment
Passenger processing at gate
Aircraft late to gate
Other
Mechanical failures
Late cabin cleaners
Unavailable cockpit crew
Weather
Late cabin crew
Air traffic delays
Late baggage to aircraft
Poor announcement of departures
Delayed
flight
departures
Late fuel
Weight/balance sheet late
Late food service
Delayed check-in procedure
Contractor not provided
updated schedule
Materials
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Waiting for late passengers
Procedures
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Wellington Fiber Board
Co.
People
Materials
Training
Out of specification
Not available
Absenteeism
Communication
Machine maintenance
Humidity
Schedule changes
Machine speed
Wrong set-up
Other
Process
Figure 6.5
Broken
fiber
board
Cause & Effect Diagram at SJC

Policy
Find & cure causes
or bad SMACs
 Not looking for
symptoms
Faculty  Get to likely specific
causes
Ineffective
SMACs
Students
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Curriculum
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Management - Dr. Coty Keller
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How can you tell a good
fishbone?

Good ones are
made by
brainstorming that
includes everyone
 Good ones have
ribs (likely causes)
that are specific
enough so they can
be attacked and
corrected
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Process Flow Chart

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Often the first step to
improving a process is
to describe it
Help you understand
and agree
Shows how it should
work, versus how it
does work
Can help you find
redundancy,
inefficiencies and
misunderstandings
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Management - Dr. Coty Keller
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What makes a good flow chart?

A good flow chart has a
beginning and an end,
 It shows who does
what, and
 How the decisions
(triangle symbols)
impact on the path the
process takes.
 Look at the ones in
chapter 4 of the text, as
well as those on p. 103,
4 of the Walton book
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Flow charts should show who
does what
(Credit: Sharon McKiernan)
Start
Call from
Employee
Identifies claim
problem to
CSR
Yes CSR Call provider to
determine coverage of
procedure.
In -Network
Provider
?
Yes
CSR: Have
hospital/Dr office
resubmit claim.
End
No
No
CSR: Inform
employee
about out of
network
coverage
Employee
pays
deductable
and 20%
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Check Sheet (also called
checklist) : simple way to
gather and interpret data
Headliner Defects
Defect type
Tally
Total
A. Tears in fabric
////
4
B. Discolored fabric
///
3
C. Broken fiber board
//// //// //// ////
//// //// //// /
//// //
36
7
D. Ragged edges
Total
50
Pareto Charts
Common graphic technique (“let’s do a
Pareto”)
 Way to sort the vital few from the trivial
many
 Can help you determine priorities
 Checklist is one way to collect data for
the Pareto chart

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Wellington Fiber Board
Co.
Pareto Chart
40
100
80
C
30
60
20
40
10
20
D
A
0
B
0
Defect type
Cumulative percentage
Number of defects
50
Bar Chart (histogram) shows how
frequently something occurs
Number of broken fiber boards
20
15
10
5
0
First
Second
Shift
Third
Run (trend) chart
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Simplest of tools
Data plotted over time
so you can look for
trends
We do it for sales per
month and to watch our
investments
Useful anywhere
including hospital
emergency rooms
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Management - Dr. Coty Keller
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Scatter Diagram
(Picture credit: Mark Milano)
Scatter Diagram
Service $
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
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5,000,0 10,000, 15,000, 20,000,
00 000 000 000
Sales
A way to explore the
relationships between
two variables, i.e. :
 Workers’ training and
number of defects
 Moisture content and
durability
 Light levels and
computer errors
 Employee job
satisfaction and
customer satisfaction
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Management - Dr. Coty Keller
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Statistical Process Control
SPC Overview
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SPC is used to detect significant change and
indicate need for corrective action
Underlying concept from Deming
Two types of measures means two kinds of
control charts
Simple process
Deciding on spread between upper & lower
limits
Relationship between control and capability
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Deming says
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Variation is the root cause of poor quality
Common cause variation is due to causes that are
routinely present in the system while special cause
variation stems from causes that are significantly
different from normal.

Special causes must be identified and eliminated on
a case-by-case basis (well-trained workers can do
this using control chart methods).

Common cause variation is inherent to the system
and can be reduced only by improving aspects of the
system’s design (a responsibility of management).
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Theory Application
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Common causes are random, unavoidable. Their
character (mean, spread, shape) do not change over
time)
Special or Assignable causes are those causes of
variation that can be Identified and eliminated.
It is important to be aware of any change in mean,
shape or spread of process distribution, because it is
a symptom that an Assignable cause has developed.
SPC is used to detect significant change and indicate
need for corrective action
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Two types of measures
Variable measures
Attributes


measured on
continuous scale like
weight, diameter, time
 + know by how much
 - precise measure
needed
 usually use x bar and
range charts
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Discrete unit, only 2
values: yes, no; good
bad
 + less effort, less cost,
tells quickly if quality
changed
 - but does not show by
how much, needs more
observation
 usually uses p chart
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Using Control Charts for
Process Improvement
 Measure the process
 When problems are indicated,


find the assignable cause
Eliminate problems, incorporate
improvements
Repeat the cycle
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Management - Dr. Coty Keller
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Control Chart Example
Variations
UCL
Nominal
LCL
Sample number
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The Spread is an Economic
Decision
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The greater the spread UCL-LCL, the less likely an
alarm for a process being out of control. Narrow
spreads cause more alarms
Two types of errors:
– type I error: process declared out of control when
it really is okay
– type II error: process in control when in fact it is
not
Two sigma spread (narrower than a three sigma
spread)
– increases likelihood of type I error
– reduces chance of type II error
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How to decide on spread?
Implications

A manager who uses three-sigma limits
is implying that the cost of searching for
Assignable causes is relatively large
compared to the cost of not detecting a
shift in process average
 Mangers using two-sigma limits imply
that the cost of not detecting a shift in the
process average exceeds the cost of
searching for Assignable causes
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Management - Dr. Coty Keller
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Control (process variance) and
Capability (meeting design specs)
 SPC
limits are NOT specifications
 Can be in control and not meeting
specifications
 But you can use control charts to
determine if you are within tolerances.
Clue of not being capable: tolerances
are smaller than/inside control limits
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SPC highlights
Control charts “stop people from
chasing down causes”
 The formula for control limits is
designed to provide an economic
balance between searching too often for
special causes when there are none;
and not searching when a special
cause may be found
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SPC highlights -2

Do not confuse control limits with
specifications
 Common causes (variations in workers’
ability, clarity of procedures, capability of
systems and equipment, etc) can only be
changed by management
 Control charts can let you immediately detect
when something goes wrong: a Special or
Assignable cause.
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SPC highlights - 3

Special causes (machine malfunctions, an
untrained worker is put on the job, defective
material arrives from the vender) show up on
control charts as points outside the limits
 Once a system is in control, control charts
can allow workers to record data and take
action immediately when something goes
wrong.
 A point need not be outside limits to indicate
action (abrupt shifts or trends within limits
signal the need to investigate)
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Statistical Process Control
Our job is to implement
“The worker requires only a knowledge of
simple arithmetic to plot a chart. But he
cannot by himself decide that he will use a
chart on the job, and still less can he start a
movement to use charts.
 “It is the responsibility of management to
teach the use of control charts on the job
where they can be effective.” (Deming)

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Variability
Variation is central to Deming’s
philosophy
 Variation will never be eliminated
 Effort to reduce variation, however, is to
“improve constantly and forever the
system of production and service”
 SPC is a neat aid to accomplishing this

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Summary & Conclusion
The 8 tools can &
should help you
1. Manage
processes, data &
information,
2. Improve quality on
your job
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