8 Quality Management & Control

what are the effects on an organization if its good/services are poor quality?

• higher transformation costs (rework, scrap)

• higher warranty costs (returns, repairs)

• loss of sales

• loss of reputation

• lawsuits

the cost of quality

“the cost of quality is significant - as high as 25% of revenues for goods and 40% of operating expenses in services.”

“quality is free”

how can quality be improved?

if money can be moved out of failure costs and into control costs (no “new money” needed)

failsafing

creating a control condition where the customer or employee can only do the correct action

checklists

• they are effective and efficient

• formalize previous ‘lessons learned’

• shares best practices

• improvement is typically immediate and signficant

quality monitoring using AI

data-driven predictive analytics to spot failures and non-conformance ahead of time, with products and processes like equipment maintenance. this also ensures audit and inspection accuracy, and saves time

quality management philosophies

six sigma and PDCA cycle

six sigma

reducing process variation to the point where only 3.4 defects per million are produced by a process that involves a high volume of manufactured units or service transactions

DMAIC

define, measure, analyze, improve, control

PDCA

plan the improvement, do the improvement plan, check actual vs. planned results, act and adjust so actual meets planned results

ISO 9000

to facilitate international trade by providing a set of standards that people everywhere will recognize and respect. they are process standards, not product standards

ISO 14000

primarily concerned with the environmental management, regarding what the organization does to minimize harmful effects on the environment, as well as achieve continual improvement of its environmental performance

ISO 26000

guidance on social and environmental responsibilities, and more so a voluntary guidance tool to help move organizations from good intentions to good actions

how does ISO 26000 move organizations to good actions?

• develop an international consensus on what social responsibility means

• provide guidance on translating principles into effective actions

• refine and disseminate the information worldwide

quality control graphical tools

a. pareto analysis

b. scatter diagrams

c. cause-and-effect diagrams

pareto analysis

distinguishes the vital few, gathering data on the frequency of various events. they are ranked in decreasing order of importance

scatter diagrams

plotting data points and visually interpreting the results

root cause analysis - fishbone/ishikawa diagram

keep asking ‘why’ to determine root cause of problem

acceptance sampling

a form of appraisal, with acceptance or rejection of goods which already exists

process control

a form of prevention, to set standards to indicate when adjustments should be made while the product is still being produced

statistics

study of numerical data to better understand the characteristics of a population/process

statistical measures for quality control

central tendency and dispersion

central limit theorem

if we calculate sample means, rather than individual observations, then for large n the distribution of the sample means will tend to normality

control charts

used to make inferences about the state of the process on the basis of one or more statistics of samples drawn from the on-going process

state of control

the process is operating normally, with variations by random fluctuations

out of control

the variation is not purely random - assignable/special causes for the variability are present

what are additional reasons to stop and investigate a process?

• trends in either direction

• consecutive points near UCL/LCL

• five consecutive points above/below central line

• erratic behaviour

what does sampling depend on?

cost of sampling, variability of process, and cost of quality faults

where to monitor (control) in a multistage process

• before costly stages in process

• at the end to ensure customer satisfaction

• at historically unreliable stages

• near beginning to isolate supplier problems

why don’t we monitor at every stage of the process?

it is too expensive and too slow

process capability

measures whether the output will routinely meet the design specifications

specification limits

the upper USL and lower USL specification limits are externally set and not affected by improving the process or sampling. this is measured by the relationship of the variation of individual values of the process with the USL and LSL

advantages of ISO 14000

• positive public image and reduced exposure to liability

• good systematic approach to pollution prevention through minimization of ecological impact of products and activities

• compliance w regulatory requirements and opportunities for competitive advantage

what is process capability measured by?

the variation of individual values of the process with the USL and LSL; each individual product must meet the specification