BBA Sem 5

Total Quality Management

Module 3- Statistical Process Control

Dr. Ritu Rani

Assistant Professor
Department of Management
Studies
 History
• The concept of statistical process control has been around for a while. In 1924, Bell
Laboratories employee, William A Shewart, designed the first control chart and
pioneered the idea of statistical control. This quality control process was extensively
used during World War II in facilities for ammunition and weapons. Statistical
process control monitored the quality of products without compromising on safety.
• Since then, it has become a fundamental tool in the manufacturing sector, playing a
crucial role in the quality management systems of organizations worldwide.
• SPC is not just a set of statistical tools, but a complete philosophy and approach
towards process improvement.
• He eventually published a book titled “Statistical Method from the Viewpoint of
Quality Control” (1939).
• Today, the worldwide manufacturing sector uses statistical process controls
extensively.
 Meaning of SPC
• Statistics: Statistics is a science that deals with the collection, summarization,
analysis, and drawing of information from the data.
• Process: It converts input resources into the desired output (goods or services)
with a combination of people, materials, methods, and machines, as well as
measurements.
• Control: System, policies, and procedures in place so the overall output meets
the requirement.
• Data that falls within the control limits indicates that everything is operating as
expected. Any variation within the control limits is likely due to a common cause
—the natural variation that is expected as part of the process.
• If data falls outside of the control limits, this indicates that an assignable cause
is likely the source of the product variation, and something within the process
should be changed to fix the issue before defects occur.
 Statistical Process Control
• Statistical process control (SPC) is a scientific, data-driven methodology and set
of tools used in quality management and manufacturing to monitor, control,
and improve processes by using statistical techniques.
• It is defined as the use of statistical techniques to control a process or
production method.
• This technique utilizes statistical methods to understand the behavior of a
production process, identify significant changes, and reduce process
variability.
• SPC tools and procedures can help in monitoring process, discover issues in
internal systems, and find solutions for production issues.
• SPC monitors manufacturing processes with technology that measures and
controls quality.
 Statistical Process Control
• Statistical process control is a simple way to encourage continuous improvement.
When a process is continuously monitored and controlled, managers can ensure that
it works at its full potential, resulting in consistent, quality manufacturing.
• It uses graphical displays known as control charts to determine whether a process
should be continued or should be adjusted to achieve the desired quality.
• The primary objective of SPC is to ensure that a process operates consistently and
produces products or services that meet predetermined quality standards.
• The ultimate goal of SPC is to enhance product quality, improve productivity, and
reduce waste and costs.
• It largely relies on statistical approaches to provide you with a comprehensive picture
of the present state of your production facilities. Yet, when used correctly, it can be a
very effective tool for increasing output and minimizing different types of waste.
 Causes of variation
Shewhart noted that the quality of a product is characterised by the extent to
which the product meets the target specification, but with minimum variation. A
key insight was his identification of two causes of variation:
Common cause variation:
• which is the ‘noise’ intrinsic to the underlying process.
• reduction of common cause variation needs action to change the process
Special cause variation (Assignable Cause):
• which ‘signals’ an external cause.
• Special cause variation needs identification of the external cause before it can
be addressed.
 Benefits of statistical
process control
• Reduced wastage and warranty claims
• Reduced need for manual inspections
• Controlled costs
• Maximized productivity in a manufacturing unit
• Increased operational efficiency
• Improved analytics and reporting
• Enhanced customer satisfaction
 Benefits of Statistical Process
Control
• The objective is to stabilize the process. A stable, predictable process is said to
be in statistical control.
• To monitor the behaviour or performance of an existing process
• To support efforts to improve an existing process
• A decrease in variation will lead to better quality; lower costs (waste, scrap,
rework, claims, etc.
• commonly used technique for identifying faults in your production line, and
ensuring that the final product is within acceptable quality boundaries.
 SPC- Examples
• Assume that a consumer receives a shipment of parts, called a lot, from a producer. A
sample of parts will be taken and the number of defective items counted. If the number of
defective items is low, the entire lot will be accepted. If the number of defective items is
high, the entire lot will be rejected. Correct decisions correspond to accepting a good-quality
lot and rejecting a poor-quality lot.
• The error of rejecting a good-quality lot creates a problem for the producer; the probability
of this error is called the producer’s risk. On the other hand, the error of accepting a poor-
quality lot creates a problem for the purchaser or consumer; the probability of this error is
called the consumer’s risk.
• Control charts can be classified by the type of data they contain. For instance, an x̄-chart is
employed in situations where a sample mean is used to measure the quality of the output.
Quantitative data such as length, weight, and temperature can be monitored with an x̄-
chart. Process variability can be monitored using a range or R-chart. In cases in which the
quality of output is measured in terms of the number of defectives or the proportion of
defectives in the sample, an np-chart or a p-chart can be used.
 Reason for using Statistical
Process Control
• Today companies face increasing competition and operational costs, including
raw materials increasing. So, it is beneficial for organizations to have control
over their operation.
• Organizations must try to continuously improve quality, efficiency, and cost
reduction. Many organizations still follow inspection after production for quality-
related issues.
• SPC helps companies move towards prevention-based quality control instead of
detection-based quality controls. By monitoring SPC graphs, organizations can
easily predict the behavior of the process.
 Statistical Process Control
To arrive at a controlled process:
• the measurements have to be registered in a correct way
• the data has to be analyzed in a correct way
• decisions must be taken based on the analysis and a proper procedure
• process adjustments must be registered to follow up and evaluate the effect of
adjustments
 History of 7 QC Tools of Quality
Management
• There are seven quality control tools in quality management for process
improvement, which originated in post-war Japan. Kaoru Ishikawa introduced
these 7 QC Tools of Quality Management, who is also known as the father of
“Quality Circles” for the role he played in launching Japan’s quality movement in
the 1960s. During this time, companies were focused on training their
employees in statistical quality control easier for everyone – even those with
little knowledge of statistics – to understand.
• Since these tools are basic and easy to use. This helped workers effectively
improve the quality of the business process. The tool not only fulfilled the
requirements of the customers but also helped generate a huge amount of
profit for the organizations.
• “As much as 95 per cent of all quality-related problems in the factory can be
solved with seven fundamental quantitative tools.”
 Quality Circle
• Every organization aims to maintain and sustain the “quality” of the product and services
throughout the production process. Organizations should strive to meet their customer’s
requirements by improving their business processes and delivering high-quality
products and services. They can accomplish these tasks by using the 7 Quality Control
Tools of Quality Management.
• The 7 basic tools of quality, sometimes also referred to as 7 QC tools – represent a fixed
set of graphical tools used for troubleshooting issues that are related to quality.
• They are called basic quality tools because they can be easily learned by anyone even
without any formal training in statistics.
When should you use 7 QC Tools?
• 7 QC tools can be carried out during the quality management, quality improvement
process, six sigma implementation processes or even the regular PDCA cycle for the
quality purpose for enhanced quality management. In the first phase of measuring and
identifying, Fishbone Diagram also known as cause and effect diagram, Pareto Chart and
Control Chart can be utilized. In the next phases of assessment and analysis, Scatter
Diagram, Histogram and Checklist can be carried out. The Control Chart can be utilized
consistent quality improvement.
 QC Tools
The 7 Basic Quality Control (QC) Tools for Process Improvement in Quality Management are:
1. Cause-and-effect diagrams (Fishbone or Ishikawa diagram)
2. Scatter diagrams
3. Histograms
4. Control charts
5. Pareto charts
6. Check sheets
7. Flowchart/ Stratification
 Benefits of 7 QC Tools
• The 7 QC tools are structured and fundamental instruments that help businesses
improve their management and production process for achieving enhanced
product quality.
• From assessing and examining the production process, identification of key
challenges and problems to controlling the fluctuation present in the product
quality and providing solutions for prevention of defects in future.
• Follows the 80/20 rule i.e. gain 80% result with 20% efforts
• Provides a more structured path for problem-solving and quality improvement
• Easy to understand as well as implement yet extremely effective
• A scientific and logical approach for problem-solving
 Benefits of 7 QC Tools
• Improve the quality of product and services
• Helps in identifying and analyzing problems during the process
• Encourages team spirit and fosters a healthy culture
• Enhance customer experience and customer satisfaction
• Based on the data-driven process and customer-centric approach, 7 QC tools
implementation is one of the most effective processes that tool in the shortest
amount of time.
 Cause and Effect Diagram
(Fishbone or Ishikawa diagram)
• This tool is devised by Kaoru Ishikawa himself and is also known as the fishbone
diagram (for it’s shaped like the skeleton of a fish) and Ishikawa diagram.
• They are used for identifying the various factors (causes) leading to an issue
(effect). It ultimately helps discover the root cause of the problem allowing you
to find the correct solution effectively.
Uses
• Problem-solving; finding root causes of a problem.
• Uncovering the relationships between different causes leading to a problem.
• During group brainstorming sessions to gather different perspectives on the
matter.
 Cause and Effect Diagram
(Fishbone or Ishikawa diagram)
Real-world examples of usage
• Investigating the potential causes of low employee morale or high turnover
rates.
• Analyzing the factors contributing to product defects in a manufacturing
process.
• Identifying the root causes of customer complaints in a service industry.
Benefit
• Enhances problem-solving by systematically identifying and organizing possible
causes, allowing teams to address root causes rather than symptoms.
 Scatter Diagram
• The scatter diagram (scatter charts, scatter plots, scattergrams, scatter graphs) is a chart that helps you
identify how two variables are related.
• The scatter diagram shows the values of the two variables plotted along the two axes of the graph. The
pattern of the resulting points will reveal the correlation.
Uses
• To validate the relationship between causes and effects.
• To understand the causes of poor performance.
• To understand the influence of the independent variable over the dependent variable.
Real-world examples of usage
• Exploring the relationship between advertising expenditure and sales revenue.
• Analyzing the correlation between employee training hours and performance metrics.
• Investigating the connection between temperature and product quality in a production line.
Benefit
• Helps identify correlations or patterns between variables, facilitating the understanding of cause-and-effect
relationships and aiding in decision-making.
 Histogram
• A histogram is a type of bar chart that visualizes the distribution of numerical data. It groups numbers into
ranges and the height of the bar indicates how many fall into each range.
• It’s a powerful quality planning and control tool that helps you understand preventive and corrective
actions.
Uses
• To easily interpret a large amount of data and identify patterns.
• To make predictions of process performance.
• To identify the different causes of a quality problem.
Real-world examples of usage
• Analyzing the distribution of call wait times in a call center.
• Assessing the distribution of product weights in a manufacturing process.
• Examining the variation in delivery times for an e-commerce business.
Benefit
• Provides insights into process performance and variation, enabling teams to target areas for improvement
and make data-driven decisions.
 Control Chart
• The control chart is a type of run chart used to observe and study process variation resulting from a common or special cause over
a period of time.
• The chart helps measure the variations and visualize it to show whether the change is within an acceptable limit or not. It helps
track metrics such as defects, cost per unit, production time, inventory on hand, etc.
• Control charts are generally used in manufacturing, process improvement methodologies like Six Sigma and stock trading
algorithms.
Uses
• To determine whether a process is stable.
• To monitor processes and learn how to improve poor performance.
• To recognize abnormal changes in a process.
Real-world examples of usage
• Monitoring the variation in product dimensions during a manufacturing process.
• Tracking the number of customer complaints received per day.
• Monitoring the average response time of a customer support team.
Benefit
• Enables real-time monitoring of process stability, early detection of deviations or abnormalities, and prompt corrective actions to
maintain consistent quality.
 Pareto Chart
• The Pareto chart is a combination of a bar graph and a line graph. It helps identify the facts needed to set priorities.
• The Pareto chart organizes and presents information in such a way that makes it easier to understand the relative
importance of various problems or causes of problems. It comes in the shape of a vertical bar chart and displays the
defects in order (from the highest to the lowest) while the line graph shows the cumulative percentage of the
defect.
Uses
• To identify the relative importance of the causes of a problem.
• To help teams identify the causes that will have the highest impact when solved.
• To easily calculate the impact of a defect on the production.
Real-world examples of usage
• Analyzing customer feedback to identify the most common product or service issues.
• Prioritizing improvement efforts based on the frequency of quality incidents.
• Identifying the major causes of delays in project management.
Benefit
• Helps focus improvement efforts on the most significant factors or problems, leading to effective allocation of
resources and improved outcomes.
 Check Sheets
• Check sheets provide a systematic way to collect, record and present quantitative and qualitative data
about quality problems. A check sheet used to collect quantitative data is known as a tally sheet.
• It is one of the most popular QC tools and it makes data gathering much simpler.
Uses
• To check the shape of the probability distribution of a process
• To quantify defects by type, by location or by cause
• To keep track of the completion of steps in a multistep procedure (as a checklist)
Real-world examples of usage
• Tracking the number of defects or errors in a manufacturing process.
• Recording customer complaints or inquiries to identify common issues.
• Monitoring the frequency of equipment breakdowns or maintenance needs.
Benefit
• Provides a structured approach for data collection, making it easier to identify trends, patterns, and areas
for improvement.
 Flowchart/ Stratification
• Flowcharts are perhaps the most popular out of the 7 quality tools. This tool is used to visualize the sequence of
steps in a process, event, workflow, system, etc. In addition to showing the process as a whole, a flowchart also
highlights the relationship between steps and the process boundaries (start and end).
• Flowcharts use a standard set of symbols, and it’s important to standardize the use of these symbols so anyone
can understand and use them easily. Here’s a roundup of all the key flowchart symbols.
Uses
• To build a common understanding of a process.
• To analyze processes and discover areas of issues, inefficiencies, blockers, etc.
• To standardize processes by leading everyone to follow the same steps.
Real-world examples of usage
• Documenting and analyzing the steps involved in a customer order fulfillment process.
• Mapping out the workflow of a software development lifecycle.
• Visualizing the process flow of patient admissions in a hospital.
Benefit
• Enhances process understanding, highlights bottlenecks or inefficiencies, and supports process optimization and
standardization efforts.
 Normal curve
• In a normal distribution, data is symmetrically distributed with no skew. When
plotted on a graph, the data follows a bell shape, with most values clustering
around a central region and tapering off as they go further away from the center.
• Normal distributions are also called Gaussian distributions or bell curves
because of their shape.
• The mean, median & mode are exactly the same.
• The distribution is symmetric about the mean—half the values fall below the
mean and half above the mean.
• The normal distribution is the proper term for a probability bell curve.
• In a normal distribution, the mean is zero and the standard deviation is 1. It has
zero skew and a kurtosis of 3.
Normal curve
 Central Tendency
• Measures of central tendency help you find the middle, or the average, of a
dataset. In statistics, the central tendency is the descriptive summary of a data
set. The 3 most common measures of central tendency are the mode, median,
and mean.
• Mode: the most frequent value.
• Median: the middle number in an ordered dataset.
• Mean: the sum of all values divided by the total number of values.
• It does not provide information regarding individual data from the dataset,
where it gives a summary of the dataset.
• The purpose of the central tendency is to provide an exact representation of the
entire collected data.
 Mean & Mode
Mean
The mean represents the average value of the dataset. It can be calculated as the
sum of all the values in the dataset divided by the number of values. In general, it
is considered as the arithmetic mean.

Mode
• The mode represents the frequently occurring value in the dataset. Sometimes
the dataset may contain multiple modes and in some cases, it does not contain
any mode at all.
• Consider the given dataset 5, 4, 2, 3, 2, 1, 5, 4, 5
• Since the mode represents the most common value. Hence, the most frequently
repeated value in the given dataset is 5.
 Median
• Median is the middle value of the dataset in which the dataset is arranged in the
ascending order or in descending order. When the dataset contains an even number of
values, then the median value of the dataset can be found by taking the mean of the
middle two values.
Consider the given dataset with the odd number of observations arranged in descending
order – 23, 21, 18, 16, 15, 13, 12, 10, 9, 7, 6, 5, and 2
Here 12 is the middle or median number that has 6 values above it and 6 values below it.
Now, consider another example with an even number of observations that are arranged in
descending order – 40, 38, 35, 33, 32, 30, 29, 27, 26, 24, 23, 22, 19, and 17
When you look at the given dataset, the two middle values obtained are 27 and 29.
Now, find out the mean value for these two numbers.
i.e.,(27+29)/2 =28
Therefore, the median for the given data distribution is 28.
 Process capabilities
• Process capabilities compare the output of a process to its specification limits.
• It requires a data set from an in-control process, which means that the output
measures the process in question and then creates a normal bell-curve
distribution over time.
• The main goal of process capability analysis is to determine whether or not a
process is capable enough to meet customer requirements in terms of quality
and cost.
• Process capability is often used as input into statistical process control (SPC)
charts, which are used to monitor and improve processes.
 Process capabilities
Process capability analysis focuses on three key measures:
1. Process mean (average) deviation from target: This is the average difference
between the actual and target values for a measured characteristic (such as
weight, volume or time). The greater this deviation, the lower the process
capability.
2. Process standard deviation: This is a measure of variation in performance
around the mean value. The smaller it is, the more consistent are measurements
of a given characteristic across time or across samples taken at different times.
3. Process capability index: This provides an indication of how close actual results
are to target results (zero means perfect conformance with target values).
 Advantages of a Capable Process
• A capable process has several key advantages, but the biggest is higher quality. When
processes are performed within acceptable limits, you will consistently meet standards.
This leads to fewer defects and improves customer satisfaction.
Other advantages include:
• Cost reductions: Less waste and rework
• Operational efficiency: Less time monitoring and troubleshooting processes.
• Reduced risk: Reduces risk for poor quality, delays, or failure to meet customer
expectations.
• Standardization: Capable processes help develop standard procedures to improve
quality
• Compliance: Increase the likelihood of meeting compliance or regulatory requirements
• Reliability: Consistent output creates more reliable forecasting for lead times and
delivery
 References
• Besterfield D.H., et al. Total quality management. N.Y. Pearson
Education Publ; 2003.
• Juran J.M., Gryna F.M. Quality planning and analysis. New York:
McGraw Hill Publ; 1980.
• Deming W.R. Out of crisis. Chambers University Press; 1993.
THANK YOU