Montgomery Ch01

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery.
1
Copyright (c) 2012 John Wiley & Sons, Inc.
Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 2
Learning Objectives

1.1 Definitions – Meaning of Quality and
Quality Improvement
1.1.1 The Eight Dimensions of Quality
1. Performance
2. Reliability
3. Durability
4. Serviceability
5. Aesthetics
6. Features
7. Perceived Quality
8. Conformance to Standards

•This is a traditional definition
•Quality of design
•Quality of conformance

This is a modern definition of quality

The Transmission Example

• The transmission example illustrates the utility of this definition
• An equivalent definition is that quality improvement is the
elimination of waste. This is useful in service or transactional
businesses.

1-1.2 Terminology

Terminology cont’d
• Specifications
– Lower specification limit
– Upper specification limit
– Target or nominal values
• Defective or nonconforming product
• Defect or nonconformity
• Not all products containing a defect are
necessarily defective

1.2. History of Quality Improvement

1.3 Statistical Methods for Quality
Control and Improvement

Statistical Methods
• Statistical process control (SPC)
– Control charts, plus other problem-solving tools
– Useful in monitoring processes, reducing variability
through elimination of assignable causes
– On-line technique
• Designed experiments (DOX)
– Discovering the key factors that influence process
performance
– Process optimization
– Off-line technique
• Acceptance Sampling
Walter A. Shewart (1891-1967)
• Trained in engineering and physics
• Long career at Bell Labs
• Developed the first control chart
about 1924

1.4 Management Aspects of Quality
Improvement
Effective management of quality requires the
execution of three activities:
1. Quality Planning
2. Quality Assurance
3. Quality Control and Improvement

1.4.1 Quality Philosophy and Management Strategy
W. Edwards Deming
• Taught engineering, physics in the

1920s, finished PhD in 1928
• Met Walter Shewhart at Western
Electric
• Long career in government
statistics, USDA, Bureau of the
Census
• During WWII, he worked with
US defense contractors, deploying
statistical methods
• Sent to Japan after WWII to work
on the census

Deming
• Deming was asked by JUSE to lecture on
statistical quality control to management
• Japanese adopted many aspects of Deming’s
management philosophy
• Deming stressed “continual never-ending
improvement”
• Deming lectured widely in North America
during the 1980s; he died 24 December 1993

Deming’s 14 Points
1. Create constancy of purpose toward improvement
2. Adopt a new philosophy, recognize that we are in a time of
change, a new economic age
3. Cease reliance on mass inspection to improve quality
4. End the practice of awarding business on the basis of price
alone
5. Improve constantly and forever the system of production and
service
6. Institute training
7. Improve leadership, recognize that the aim of supervision is
help people and equipment to do a better job
8. Drive out fear
9. Break down barriers between departments

14 Points cont’d
10. Eliminate slogans and targets for the workforce such as zero
defects
11. Eliminate work standards
12. Remove barriers that rob workers of the right to pride in the
quality of their work
13. Institute a vigorous program of education and self-
improvement
14. Put everyone to work to accomplish the transformation
Note that the 14 points are about change

Deming’s Deadly Diseases
1. Lack of constancy of purpose
2. Emphasis on short-term profits
3. Performance evaluation, merit rating, annual
reviews
4. Mobility of management
5. Running a company on visible figures alone
6. Excessive medical costs for employee health care
7. Excessive costs of warrantees

Deming’s Obstacles to Success

Joseph M. Juran
• Born in Romania (1904-
2008), immigrated to the US
• Worked at Western Electric,
influenced by Walter
Shewhart
• Emphasizes a more strategic
and planning oriented
approach to quality than
does Deming
• Juran Institute is still an
active organization
promoting the Juran
philosophy and quality
improvement practices

The Juran Trilogy
1. Planning
2. Control
3. Improvement
• These three processes are interrelated

• Control versus breakthrough
• Project-by-project improvement

Some of the Other “Gurus”
• Kaoru Ishikawa
– Son of the founder of JUSE, promoted widespread use of
basic tools
• Armand Feigenbaum
– Author of Total Quality Control, promoted overall
organizational involvement in quality,
– Three-step approach emphasized quality leadership, quality
technology, and organizational commitment
• Lesser gods, false prophets

Total Quality Management (TQM)
• Started in the early 1980s, Deming/Juran
philosophy as the focal point
• Emphasis on widespread training, quality
awareness
• Training often turned over to HR function
• Not enough emphasis on quality control and
improvement tools, poor follow-through, no
project-by-project implementation strategy
• TQM was largely unsuccessful
Total Quality Management (TQM)
• TQM is “just another program”
• Value engineering
• Zero defects
• “Quality is free”
Recipes for Ineffectiveness and maybe Disaster

Quality Systems and Standards

• The ISO certification process focuses heavily on quality
assurance, without sufficient weight given to quality planning and
quality control and improvement

The Malcolm Baldrige National
Quality Award
• The MBNQA process is a valuable assessment tool

• See Table 1-4 for Performance Excellence Criteria and point values

Six Sigma
• Use of statistics & other analytical tools has grown
steadily for over 80 years
– Statistical quality control (origins in 1920, explosive
growth during WW II, 1950s)
– Operations research (1940s)
– FDA, EPA in the 1970’s
– TQM (Total Quality Management) movement in the 1980’s
– Reengineering of business processes (late 1980’s)
– Six-Sigma (origins at Motorola in 1987, expanded impact
during 1990s to present)

Focus of Six Sigma is on Process Improvement
with an Emphasis on Achieving Significant
Business Impact
• A process is an organized sequence of activities that
produces an output that adds value to the organization
• All work is performed in (interconnected) processes
– Easy to see in some situations (manufacturing)
– Harder in others
• Any process can be improved
• An organized approach to improvement is necessary
• The process focus is essential to Six Sigma

Why “Quality Improvement” is Important:
A Simple Example
• A visit to a fast-food store: Hamburger (bun, meat, special sauce,
cheese, pickle, onion, lettuce, tomato), fries, and drink.
• This product has 10 components - is 99% good okay?
P{Single meal good}  (0.99)10  0.9044

Family of four, once a month: P{All meals good}  (0.9044) 4  0.6690
P{All visits during the year good}  (0.6690)12  0.0080
P{single meal good}  (0.999)10  0.9900, P{Monthly visit good}  (0.99)4  0.9607
P{All visits in the year good}  (0.9607)12  0.6186

Six Sigma Focus
• Initially in manufacturing
• Commercial applications
– Banking
– Finance
– Public sector
– Services
• DFSS – Design for Six Sigma
– Only so much improvement can be wrung out of an
existing system
– New process design
– New product design (engineering)

Some Commercial Applications
• Reducing average and variation of days outstanding on
accounts receivable
• Managing costs of consultants (public accountants, lawyers)
• Skip tracing
• Credit scoring
• Closing the books (faster, less variation)
• Audit accuracy, account reconciliation
• Forecasting
• Inventory management
• Tax filing
• Payroll accuracy

Six Sigma
• A disciplined and analytical approach to process and product
improvement
• Specialized roles for people; Champions, Master Black belts,
Black Belts, Green Belts
• Top-down driven (Champions from each business)
• BBs and MBBs have responsibility (project definition,
leadership, training/mentoring, team facilitation)
• Involves a five-step process (DMAIC) :
– Define
– Measure
– Analyze
– Improve
– Control

What Makes it Work?
• Successful implementations characterized by:
– Committed leadership
– Use of top talent
– Supporting infrastructure
• Formal project selection process
• Formal project review process
• Dedicated resources
• Financial system integration
• Project-by-project improvement strategy
(borrowed from Juran)
Design for Six Sigma (DFSS)
Taking variability reduction upstream from manufacturing (or
operational six sigma) into product design and development
Every design decision is a business decision

DFSS Matches Customer Needs
with Capability
• Mean and variability affects product performance and cost
– Designers can predict costs and yields in the design phase
• Consider mean and variability in the design phase
– Establish top level mean, variability and failure rate targets for
a design
– Rationally allocate mean, variability, and failure rate targets to
subsystem and component levels
– Match requirements against process capability and identify gaps
– Close gaps to optimize a producible design
– Identify variability drivers and optimize designs or make designs robust
to variability
• Process capability impact design decisions
DFSS enhances product design methods.

DMAIC Solves Problems by Using
Six Sigma Tools
• DMAIC is a problem solving methodology
• Closely related to the Shewhart Cycle
• Use this method to solve problems:
– Define problems in processes
– Measure performance
– Analyze causes of problems
– Improve processes  remove variations and non-
value-added activities
– Control processes so problems do not recur

Copyright (c) 2012 John Wiley & Sons, Inc. 11
Lean Systems
• Focuses on elimination of waste
– Long cycle times
– Long queues – in-process inventory
– Inadequate throughput
– Rework
– Non-value-added work activities
• Makes use of many of the tools of operations
research and industrial engineering

Little’s Law

Lean Focuses on Waste Elimination
• Definition
• A set of methods and tools used to eliminate waste in
a process
• Lean helps identify anything not absolutely required
to deliver a quality product on time.
• Benefits of using Lean

• Lean methods help reduce inventory, lead time, and
cost
• Lean methods increase productivity, quality, on time
delivery, capacity, and sales

The supply chain often represents a significant component of the total
value of the organization’s products or services
Failures in the supply chain have potentially huge impact on the

organization

Key Supply Chain Processes
• Service management
• Demand management
• Order fulfillment
• Quality
• Manufacturing flow management
• Supplier relationship management
• Logistics and distribution
• Returns management
Key Supply Chain Management (SCM) Activities:
• Supplier qualification or certification

• Supplier development
• Supplier audits

Returns Management
Costs attributable to poor supplier quality

Quality Costs

The Hidden Factory (or Office)

Legal Aspects of Quality
• Product liability exposure
• Concept of strict liability

1. Responsibility of both manufacturer and
seller/distributor
2. Advertising must be supported by valid data

Implementing Quality Improvement
•A strategic management process, focused along the
eight dimension of quality
•Suppliers and supply chain management must be

involved
•Must focus on all three components: Quality Planning,
Quality Assurance, and Quality Control and Improvement

Learning Objectives


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Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery.

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• Taught engineering, physics in the

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 24

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 25

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 26

Note that the 14 points are about change

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Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 32

• These three processes are interrelated

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 33

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 34

Recipes for Ineffectiveness and maybe Disaster

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 36

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 37

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 38

• The MBNQA process is a valuable assessment tool

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 40

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 43

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 44

• This product has 10 components - is 99% good okay?

P{Single meal good}  (0.99)10  0.9044

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 46

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 47

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 48

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 49

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 52

DFSS enhances product design methods.

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 55

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 56

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 58

• Benefits of using Lean

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 59

Failures in the supply chain have potentially huge impact on the

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 61

• Supplier qualification or certification

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 63

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 64

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 65

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 66

• Concept of strict liability

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 67

•Suppliers and supply chain management must be

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 68

Chapter 1 Introduction to Statistical Quality Control, 7th Edition by Douglas C. Montgomery. 70

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