1. OPERATIONS MANAGEMENT for MBAs Fourth Edition 1 Meredith and Shafer John Wiley and Sons, Inc. Chapter 3: Controlling Processes Topic 6: Controlling Processes

2. Monitoring and Controlling Processes 2 Balanced Scorecard Strategy Maps ISO 9000/14000/14001 Benchmarking Statistical Process Control Homework, Quality Control Charts – Next Section

3. Balanced Scorecard 3

4. Strategy Map 4

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6. ISO 9000 and 14000 6

7. Statistical Quality/Process Control 7 The act of reducing differences between plan and reality for a process. Monitoring and comparing actual performance to a standard. Statistical Process Control (SPC/SQC) the application of statistical methods and procedures (such as control charts) to analyze the inherent variability of a process or its outputs to achieve and maintain a state of statistical control, and to improve the process capability.

8. SPC, Causes of Variation 8 Common causes  Random, unavoidable sources of variation Assignable causes (out of statistical control)  Can be identified and eliminated  Change in the mean, spread, or shape

9. 9 Control Charts: time-ordered diagram of process performance

10. Control Chart Factors 10 |FACTORS FOR CALCULATING THREE-SIGMA LIMITS FOR |THE xbar -CHART AND R -CHART Size of Sample ( n ) Factor for UCL and LCL for x -Chart ( A 2 ) Factor for LCL for R -Chart ( D 3 ) Factor for UCL for R -Chart ( D 4 ) 21.88003.267 31.02302.575 40.72902.282 50.57702.115 60.48302.004 70.4190.0761.924 80.3730.1361.864 90.3370.1841.816 100.3080.2231.777 WS Example

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12. 12 Using xbar - and R -Charts EXAMPLE The management of West Allis Industries is concerned about the production of a special metal screw used by several of the company’s largest customers. The diameter of the screw is critical to the customers. Data from five samples appear in the accompanying table. The sample size is 4. Is the process in statistical control? Data for the x - and R -Charts: Observation of Screw Diameter (in.) Observation Sample Number 1234 Rx 10.50140.50220.50090.50270.00180.5018 20.50210.50410.50240.50200.00210.5027 30.50180.50260.50350.50230.00170.5026 40.50080.50340.50240.50150.00260.5020 50.50410.50560.50340.50470.00220.5045 Average0.00210.5027

13. Example 13

14. Example 14

15. Process Capability Indexes C p and C pk (for example) 15 Process capability compares the output of an in-control process to the specification limits by using capability indices. The comparison is made by forming the ratio of the spread between the process specifications (the specification "width") to the spread of the process values, as measured by 6 process standard deviation units (the process "width"). Process capability refers to the ability of the process to meet the design specification for the product or service Design specifications are often expressed as a nominal value and a tolerance Three-sigma quality, Ratio>1 Four-sigma quality, Ratio>1.33 Six-sigma quality, Ratio>2

16. 16 X X X X X X X X X X X X X X X X X X X X X X X X X X Good Bad Good Bad X X X X X X X X X CpCp C pk

17. 17 No Yes No Yes Variation needs attention? Centering needs attention? Crit Crit>Cpl Crit Crit>Cpu Crit Crit<Cpl=Cpu, Cp<Crit Crit<Cpl<Cpu, Cp<Crit Crit<Cpu<Cpl, Cp<Crit Crit>Cpl<Cpu, Cp<Crit Crit>Cpu<Cpl, Cp<Crit

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