CHAPTER 20:
Total Quality Management
to accompany
Introduction to Business Statistics
fourth edition,by Ronald M,Weiers
Presentation by Priscilla Chaffe-Stengel
Donald N,Stengel
? 2002 The Wadsworth Group
Chapter 20 - Learning Objectives
? Understand the philosophy of total quality
management ( TQM).
? Be able to distinguish between defect prevention
and defect detection strategies for the
management of quality.
? Be able to distinguish random variation from
assignable variation.
? Understand the fundamentals of statistical
process control charts.
? Be able to prepare and interpret the major types
of control charts.
? 2002 The Wadsworth Group
Total Quality Management
? A management philosophy that
integrates quality into all facets of an
organization and focuses on systematic
improvement
? Process orientation rather than results
orientation
? Emphasis on small continuous
improvements rather than relying on
large-scale innovations
? 2002 The Wadsworth Group
TQM-Related Practices
?The Quality Audit
?Competitive Benchmarking
?Just-In-Time Manufacturing
?Quality Circles
?Baldrige National Quality Award
? 2002 The Wadsworth Group
Pareto Diagram
? A Pareto diagram is a bar chart
illustrating the major types of defects in
a product or service.
? The size of each bar indicates the
relative frequency of the associated
type of defect.
? Types of defects are sorted by
decreasing relative frequency.
? 2002 The Wadsworth Group
Pareto Diagram - An Example
Problem,Fatal Work Injuries
40%
20%
16%
10% 10%
4%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Trans por t
A cci dents
A s s ault s Co ntac t
w it h
Equipm ent
F al ls Expo s ure t o
Toxics
O ther
? 2002 The Wadsworth Group
Quality and Process Variation
? The quality of products and services
is related to variation in the
underlying processes.
? Two sources of process variation:
– Random variation
– Assignable variation
? 2002 The Wadsworth Group
Random Variation
?..,is variation due to chance that is
inherent in the design of the
process.
?..,can be reduced by using a better
design,better materials,or better
equipment.
? 2002 The Wadsworth Group
Assignable Variation
? Assignable variation is due to a specific,
identifiable cause which,in turn,
changes the process,such as worker
error.
? Statistical process control is a procedure
for monitoring and analyzing process
variation so that assignable variation
can be identified and reduced.
? 2002 The Wadsworth Group
Control Charts
?Control charts are graphical tools
for statistical process control.
?Output from the process is
sampled at regular intervals.
?Measurements from successive
samples are plotted on a control
chart.
? 2002 The Wadsworth Group
Use of Control Charts
? When the process remains within control
limits,process variation can be attributed
to random variation and deemed,in
control.”
? When the process goes beyond control
limits,it is likely that significant
assignable variation is present,The
process is then deemed,out of control.”
? 2002 The Wadsworth Group
Mean Charts (μ,s known)
? Control chart showing sample means over
successive samples.
If mean μand standard deviation s for the
process are known:
– Centerline of control chart is defined by μ.
– Upper control limit is defined by,where
n is the size of each sample.
– Lower control limit is defined by,
? ? 3? sn
? – 3? sn
? 2002 The Wadsworth Group
Mean Chart - Problem 20.41
Burst Strength of Gas Cylinder,μ= 3400 psi,s = 100 psi,n = 4
Process is in control.
3200
3300
3400
3500
3600
0 1 2 3 4 5 6
U pper C ontrol Lim it = 3 550
Lo w er C ontrol Lim it = 3 250
C enterli ne = 340 0
Sam ple
Mean
Sam ple
? 2002 The Wadsworth Group
Mean Chart - Problem 20.43
Thickness of Coating,μ= 3.000 mil,s = 0.300 mil,n = 4
Process is out of control,Sample 5 is outside the control limit.
2.0
3.0
4.0
0 1 2 3 4 5 6
U pper C ontrol Lim it = 3,45
Lo w er C ontrol Lim it = 2,55
C enterli ne = 3.0 00
Sam ple
Mean
Sam ple
? 2002 The Wadsworth Group
Mean Charts (μ,s unknown)
? The centerline is defined by,the average
of the sample means.
? The upper control limit is defined by
where is the average of the sample
ranges and A2 is a value from the 3-Sigma
Control Chart Factors Table.
? The lower control limit is defined by
x
x ? A2 R
R
x A 2 R
? 2002 The Wadsworth Group
Range Charts
? Range charts examine variation within samples
by tracking sample ranges.
? The centerline is defined by,the average of
the sample ranges.
? The upper control limit is defined by
where D4 is a value from the 3-Sigma Control
Factors Table.
? The lower control limit is defined by
where D3 is a value from the 3-Sigma Control
Factors Table.
R
D4 R
D3R
? 2002 The Wadsworth Group
p-Charts
? p-charts monitor the proportion of defective
units across successive samples.
? The centerline is defined by,the average of
the sample proportions.
? The upper control limit is defined by
where n is the sample size.
? The lower control limit is defined by
p
p ? 3 ? p ?( 1 – p )n
p 3 ? p ?( 1 – p )n
? 2002 The Wadsworth Group
c-Charts
? c-charts track the number of defects found in
each samples.
? The centerline is defined by,the average
number of defects for the samples.
? The upper control limit is defined by
? The lower control limit is defined by
c
c ? 3 ? c
c 3 ? c
? 2002 The Wadsworth Group
Total Quality Management
to accompany
Introduction to Business Statistics
fourth edition,by Ronald M,Weiers
Presentation by Priscilla Chaffe-Stengel
Donald N,Stengel
? 2002 The Wadsworth Group
Chapter 20 - Learning Objectives
? Understand the philosophy of total quality
management ( TQM).
? Be able to distinguish between defect prevention
and defect detection strategies for the
management of quality.
? Be able to distinguish random variation from
assignable variation.
? Understand the fundamentals of statistical
process control charts.
? Be able to prepare and interpret the major types
of control charts.
? 2002 The Wadsworth Group
Total Quality Management
? A management philosophy that
integrates quality into all facets of an
organization and focuses on systematic
improvement
? Process orientation rather than results
orientation
? Emphasis on small continuous
improvements rather than relying on
large-scale innovations
? 2002 The Wadsworth Group
TQM-Related Practices
?The Quality Audit
?Competitive Benchmarking
?Just-In-Time Manufacturing
?Quality Circles
?Baldrige National Quality Award
? 2002 The Wadsworth Group
Pareto Diagram
? A Pareto diagram is a bar chart
illustrating the major types of defects in
a product or service.
? The size of each bar indicates the
relative frequency of the associated
type of defect.
? Types of defects are sorted by
decreasing relative frequency.
? 2002 The Wadsworth Group
Pareto Diagram - An Example
Problem,Fatal Work Injuries
40%
20%
16%
10% 10%
4%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Trans por t
A cci dents
A s s ault s Co ntac t
w it h
Equipm ent
F al ls Expo s ure t o
Toxics
O ther
? 2002 The Wadsworth Group
Quality and Process Variation
? The quality of products and services
is related to variation in the
underlying processes.
? Two sources of process variation:
– Random variation
– Assignable variation
? 2002 The Wadsworth Group
Random Variation
?..,is variation due to chance that is
inherent in the design of the
process.
?..,can be reduced by using a better
design,better materials,or better
equipment.
? 2002 The Wadsworth Group
Assignable Variation
? Assignable variation is due to a specific,
identifiable cause which,in turn,
changes the process,such as worker
error.
? Statistical process control is a procedure
for monitoring and analyzing process
variation so that assignable variation
can be identified and reduced.
? 2002 The Wadsworth Group
Control Charts
?Control charts are graphical tools
for statistical process control.
?Output from the process is
sampled at regular intervals.
?Measurements from successive
samples are plotted on a control
chart.
? 2002 The Wadsworth Group
Use of Control Charts
? When the process remains within control
limits,process variation can be attributed
to random variation and deemed,in
control.”
? When the process goes beyond control
limits,it is likely that significant
assignable variation is present,The
process is then deemed,out of control.”
? 2002 The Wadsworth Group
Mean Charts (μ,s known)
? Control chart showing sample means over
successive samples.
If mean μand standard deviation s for the
process are known:
– Centerline of control chart is defined by μ.
– Upper control limit is defined by,where
n is the size of each sample.
– Lower control limit is defined by,
? ? 3? sn
? – 3? sn
? 2002 The Wadsworth Group
Mean Chart - Problem 20.41
Burst Strength of Gas Cylinder,μ= 3400 psi,s = 100 psi,n = 4
Process is in control.
3200
3300
3400
3500
3600
0 1 2 3 4 5 6
U pper C ontrol Lim it = 3 550
Lo w er C ontrol Lim it = 3 250
C enterli ne = 340 0
Sam ple
Mean
Sam ple
? 2002 The Wadsworth Group
Mean Chart - Problem 20.43
Thickness of Coating,μ= 3.000 mil,s = 0.300 mil,n = 4
Process is out of control,Sample 5 is outside the control limit.
2.0
3.0
4.0
0 1 2 3 4 5 6
U pper C ontrol Lim it = 3,45
Lo w er C ontrol Lim it = 2,55
C enterli ne = 3.0 00
Sam ple
Mean
Sam ple
? 2002 The Wadsworth Group
Mean Charts (μ,s unknown)
? The centerline is defined by,the average
of the sample means.
? The upper control limit is defined by
where is the average of the sample
ranges and A2 is a value from the 3-Sigma
Control Chart Factors Table.
? The lower control limit is defined by
x
x ? A2 R
R
x A 2 R
? 2002 The Wadsworth Group
Range Charts
? Range charts examine variation within samples
by tracking sample ranges.
? The centerline is defined by,the average of
the sample ranges.
? The upper control limit is defined by
where D4 is a value from the 3-Sigma Control
Factors Table.
? The lower control limit is defined by
where D3 is a value from the 3-Sigma Control
Factors Table.
R
D4 R
D3R
? 2002 The Wadsworth Group
p-Charts
? p-charts monitor the proportion of defective
units across successive samples.
? The centerline is defined by,the average of
the sample proportions.
? The upper control limit is defined by
where n is the sample size.
? The lower control limit is defined by
p
p ? 3 ? p ?( 1 – p )n
p 3 ? p ?( 1 – p )n
? 2002 The Wadsworth Group
c-Charts
? c-charts track the number of defects found in
each samples.
? The centerline is defined by,the average
number of defects for the samples.
? The upper control limit is defined by
? The lower control limit is defined by
c
c ? 3 ? c
c 3 ? c
? 2002 The Wadsworth Group
