1. MODULE 5 Quality Monitoring
29 August 2014
Lesson 4: Safety Stock

2. Module Objective
After completing this module, the student will be able to implement best practices, predict variations in product specifications and processes, interpret process control and capability data, and use Lean and Six Sigma to assist suppliers in the continuous performance improvement process

3. LESSON 1 Variation and Quality
06January2014

4. Lesson Objectives
Upon completion of this lesson, you should be able to:
Analyze variation in a Quality Assurance (QA) process to determine its impact on quality of products or services, efficiency, and cost
Contrast traditional vs. modern QA processes to highlight the importance of variation reduction
Identify why 100% manual inspection is not an effective QA process
Contrast the philosophies of three quality gurus: Deming, Juran, and Crosby

5. Lesson Topics This lesson will cover the following topics:
Variation in a QA Process
Traditional vs. Modern Quality
Inspections
Philosophies of Deming, Juran, and Crosby

6. What’s In It For Me?
Your understanding of the best practices from traditional and modern QA processes will enable you to support your suppliers’ efforts to reduce variation, reduce cost, increase efficiency, and improve the quality of their products or services

7. Lesson Introduction
What impact do variations in a process have on quality, schedule, and cost?

8. Variation in a QA Process
Lesson Topics:
Variation in a QA Process
Traditional vs. Modern Quality
Quality Assurance
Philosophies of Deming, Juran, and Crosby

9. Types of Waste – “TIM WOOD”
Waiting
Overproduction
Inventory
Defects
Transportation
Overprocessing
Motion

10. Variation in a QA Process
Deviations from the target tolerance in a product or process
Variation within the tolerance range is acceptable
Variation outside the tolerance range is considered unacceptable

11. Variation in a QA Process (cont.)
Variation Attributes
Prime source of waste
Contributes to poor quality, cost, and schedule performance
Variation occurs due to:
Common causes
Special causes

12. Characteristics of Common Causes of Variation
Common causes in variation include:
Small variations
Part of normal system functioning
Common causes are also known as natural causes or chance causes
Common causes in variation are:
Expected when performed according to the standard operating procedures
Often difficult to identify

13. Characteristics of Special Causes of Variation
Special causes in variation:
Occur occasionally
Cause a large variation in characteristics
Are unexpected
Occur when:
Standard procedures are not followed
There is a significant variation in the environment
Special causes are also known as:
Abnormal causes

14. Design Specifications and Variation
Devise a test strategy that demonstrates the quality of the product to the customer
Test strategies depend on the:
Complexity of the product
Degree to which testing can be accomplished at various points
Cost of testing

15. Design Specifications and Variation (cont.)
Consider a test strategy that encompasses:
Build components and test
Integrate components and test
Testing after each successive build or integration reduces the chance of failure in the end product

16. Example: Design Specification and Variation
In a sample design specification, correct placement of a weld is measured from 1.00 ± 0.01
Defective
Good
0.99
Lower
Specification
Limit
1.00
Nominal
Dimension
1.01
Upper

17. Exercise: Penny-Dropping Game (1 of 3)
Goal: Achieve quality placement of pennies
If a penny falls within the center of the target, it is considered good placement (or quality placement)
Any pennies that fall outside of the center of the target are considered defective placement

18. Exercise: Penny-Dropping Game (2 of 3)
Equipment needed:
Paper towel cardboard tube
United States (U.S.) penny
Ruler
Target

19. Exercise: Penny-Dropping Game (3 of 3)
Perfect quality is achieved by locating the penny in the center of the target
Quality degrades with increasing distance from the center of the target

20. Variation Histograms
Which of the frequency histograms represents better penny-dropping performance?
Observations
Number of
Defective
Defective
Observations
Number of
Defective
Defective

21. Importance of Variation Reduction
As a product approaches its target specifications:
Prevents cost from rising
Overall performance improves
Variation reduction is enforced through:
Standardized
Procedures for operations
Machine setup
Preventive maintenance
Leveled, regularized production schedules

22. Question and Answer
Small variations that occur as part of typical system functioning are due to what type of variation causes?
Special cause
Common cause
Typical cause
Usual cause

23. Question and Answer
What type of variation occurs when standard operating procedures are not followed?
Special cause
Atypical cause
Common cause
Unusual cause

24. Which method does not enforce variation reduction?
Question and Answer
Which method does not enforce variation reduction?
Standardization of procedures for operations
Machine setup
Preventive maintenance
Quality analysis of finished products

25. Taguchi Techniques for Quality Engineering
Continuous reduction of variation improves quality
Higher quality levels within tolerance limits
Better quality to the customer
More competitive product
Lower loss

26. Example: Taguchi Techniques
Example of one transmission manufactured in two different countries
Transmissions only installed in American cars
Results differed due to variation

27. Example: Taguchi Techniques (cont.)
Reduced variance yielded fewer warranty claims for one set of transmissions
Investigation determined that transmissions with fewer warranty claims were built to tighter tolerances within the allowable range

28. Taguchi Loss Function Loss includes: Warranty repair Rework
Dissatisfied customer (lost future sales)
Loss
Quality Cost = a(1-x) 2
0.99
1.00
1.01

29. The Goalpost Perspective
Defective
Good
0.99
1.00
1.01
Target Range

30. The Goalpost Perspective (cont.)
Contrast these philosophies:
Goalpost
Stops improvement efforts once dimensions are within the target range (i.e., Good range)
Taguchi
Continually reduce variation on an ongoing basis
In effect, shrink the target range over time

31. Results of Variation Variation results in: Higher warranty cost
Customer dissatisfaction
Reduced customer perception of quality
Lower sales

32. Traditional vs. Modern Quality
Lesson Topics:
Variation in a QA Process
Traditional vs. Modern Quality
Quality Assurance
Philosophies of Deming, Juran, and Crosby

33. Results of Improving Quality
Improving quality means reducing variation
Decreasing Variation in Dimensions
Late 1800s
Now?
High Quality, data and analytics
Craftsman Era
Mass Production

34. Traditional vs. Modern Quality
Changes in quality management philosophies can be summarized
Dimension
Traditional
(Pre-1980)
Modern
(Now)
Responsibility for Quality
QC Department
Production Departments
Role of QC Department
Enforcers
Facilitators, Resource
Supplier of Quality
Acceptance Sampling
Supplier Certification
Quality vs. Cost
Tradeoff between Quality and Cost
No Tradeoff: Improved Quality Reduces Cost

35. QUALITY ASSURANCE Lesson Topics: Variation in a QA Process
Traditional vs. Modern Quality
Quality Assurance
Philosophies of Deming, Juran, and Crosby

36. Quality Assurance (1 of 3)
100% manual inspection does not guarantee quality
Manual inspection is approximately 80% effective after several iterations
MAKE -
INSPECT
REPAIR ..
Six Sigma = 3.4 defects per million parts

37. Quality Assurance (2 of 3)
Must be built into the product or process by the production staff
Cannot be inspected into the product or service

38. Quality Assurance (3 of 3)
Tactics:
Reduce variability
Root cause of defects
Identify
Resolve
Revise process
Mistake Proof (Poka Yoke) process using:
Visual system
Lean or Six Sigma tactics

39. Metrics (1 of 3) First-Pass Yield (FPY): First-time quality
Percentage of parts that are made correct the first time without any rework
FPY is the percentage of production units originally started into production that are delivered to the customer without needing any rework/repair in the production process

40. Metrics (2 of 3) Parts Per Million (PPM): Parts Per Million defects
The average number of defective parts out of each million parts made

41. Metrics (3 of 3) Cost of Quality (COQ): Money spent on rework
Money spent on scrap
Money spent on warranty repair

42. Question and Answer
Approximate how effective is 100% manual inspection after several iterations?
20%
50%
80%
100%

43. Question and Answer
What term references the percentage of production units delivered to the customer without needing rework during production?
Fault-Free Yield
First-Pass Yield
Net Yield
Total Yield

44. Question and Answer
Which metric measures the average number parts out of specification from every million parts produced?
Defect Yield
Fault Yield
Net Faults
Parts Per Million

45. Question and Answer
To reduce variability, mistake-proof the process using visual systems, and_________________ .
Allow 20% failure rate in the first cycle by default
Hire enforcers to ensure quality at all cost
Choose suppliers who continually strive to achieve levels of tolerance close to target levels
Resolve only the top 10% of the root causes of defects

46. Philosophies of Deming, Juran, and Crosby
Lesson Topics:
Variation in a QA Process
Traditional vs. Modern Quality
Quality Assurance
Philosophies of Deming, Juran, and Crosby

47. Philosophies of Deming, Juran, and Crosby
Philip B. Crosby
W. Edwards Deming
Joseph M. Juran
1941
1951
1979
“Deming Wheel”
Plan-Do-Check-Act
(PDCA)
“Vital few and trivial many”
Juran
Deming
Pareto Principle
(80/20 Rule)
Crosby
“Quality is Free”
14-point Management Plan

48. Job Aid: Philosophies of Quality
Job Aid Activity:
Refer to Module 5, Lesson 1, Job Aid 1 CME130_M5_L1_JA1_Philosophies_of_Quality_FINAL.docx
Reference the Philosophies of Quality job aid while discussing the slides within this topic

49. W. Edwards Deming Key concepts:
Management is responsible for 85% of defects
There is no tradeoff between cost and quality
Early Deming: Statistical tools
Later Deming: Management philosophy
Build quality into the product throughout the process

50. Joseph M. Juran Key concepts:
Management is responsible for 80% of defects
The cost of quality needs to get top management’s attention; show them the money
The cost of quality is a system to formally account for these costs:
Internal
External
Appraisal
Prevention

51. Juran (1 of 4) Internal cost: Administrative costs
Incurred before the product is delivered
Scrap, rework

52. Juran (2 of 4) External cost:
Incurred after customer receives the product
Processing
Customer complaints
Customer returns
Warranty claims
Product recalls

53. Juran (3 of 4)
Appraisal cost:
Inspection
Testing

54. Juran (4 of 4) Prevention cost: Continuous improvement
Education and training

55. Philip B. Crosby Key concepts:
“Quality is Free” — no tradeoff between cost and quality
Cost of Quality (COQ) = 15% - 20% of sales

56. Cost of Quality Cost of Quality philosophies:
Deming – There is no tradeoff between cost and quality
Juran – The COQ accounts for internal, external, appraisal, and prevention costs
Crosby – Quality is free. There is no tradeoff between cost and quality; the COQ is 15-20% of sales

57. Question and Answer
Which quality management expert(s) indicated that the cost of quality is 15-20% of sales?
Philip B. Crosby
W. Edwards Deming
Joseph M. Juran
Milton C. Bradley

58. Question and Answer
Which quality management expert(s) indicated that the cost of quality accounts for internal, external, appraisal, and prevention costs?
Philip B. Crosby
W. Edwards Deming
Joseph M. Juran
Milton C. Bradley

59. Question and Answer
Which quality management expert(s) indicated that there is no tradeoff between cost and quality?
Philip B. Crosby
W. Edwards Deming
Joseph M. Juran
Both A and B
Both B and C
Both A and C

60. Question and Answer
Which cost did Juran identify as being incurred by an organization before the product is delivered?
Appraisal
External
Internal
Prevention

61. Which quality management expert(s) indicated that quality is free?
Question and Answer
Which quality management expert(s) indicated that quality is free?
Philip B. Crosby
W. Edwards Deming
Joseph M. Juran
Both A and B
Both B and C
Both A and C

62. Question and Answer
Which quality management expert(s) indicated that continuous improvement is a cost?
Philip B. Crosby
W. Edwards Deming
Joseph M. Juran
Both A and B
Both B and C
Both A and C

63. Question and Answer
Joseph M. Juran believed that customer complaints represent which cost of quality category?
Appraisal
External
Internal
Prevention

64. Summary Having completed this lesson, you should now be able to:
Analyze variations in a QA process to determine their impact on quality of products or services, efficiency, and cost
Contrast traditional vs. modern QA processes to highlight the importance of variation reduction
Identify why 100% manual inspection is not an effective QA process
Contrast the philosophies of three quality gurus, Deming, Juran, and Crosby

65. Summary (cont.)
Your understanding of traditional and modern QA processes will enable you to help your suppliers to reduce variation, reduce cost, increase efficiency, and improve the quality of products or services.