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Statistical

Process
Control(SPC)

Principles of Operations Management, 7e


Operations Management, 9e
Statistical Process Control
(SPC)
 Process control is achieved by taking periodic
samples from the process and plotting these
sample points on a chart, to see if the process is
within statistical control limits.
 A sample can be a single item or a group of items
 SPC prevents quality problems by correcting the
process before it starts producing defects.
Statistical Process Control
(SPC)
 Variability is inherent
in every process
 Natural or common
causes
 Special or assignable causes
 Provides a statistical signal when assignable
causes are present
 Detect and eliminate assignable causes of
variation
Natural Variations
 Also called common causes
 Affect virtually all production processes
 Expected amount of variation
 Output measures follow a probability
distribution
 For any distribution there is a measure of
central tendency and dispersion
 If the distribution of outputs falls within
acceptable limits, the process is said to
be “in control”
Assignable Variations
 Also called special causes of variation
 Generally this is some change in the process

 Variations that can be traced to a


specific reason
 The objective is to discover when
assignable causes are present
 Eliminate the bad causes
 Incorporate the good causes
Samples
To measure the process, we take samples
and analyze the sample statistics following
these steps Each of these
represents one
(a) Samples of the product, sample of five
say five boxes of cereal boxes of cereal
taken off the filling
machine line, vary from
each other in weight # #
Frequency
# # #

# # # #

# # # # # # #

# # # # # # # # # #

Figure S6.1 Weight


Samples
To measure the process, we take samples
and analyze the sample statistics following
these steps
The solid line
(b) After enough represents the
samples are taken distribution
from a stable
process, they form a
pattern called a
distribution Frequency

Figure S6.1 Weight


Samples
To measure the process, we take samples
and analyze the sample statistics following
these steps
(c) There are many types of distributions, including the normal
(bell-shaped) distribution, but distributions do differ in terms of
central tendency (mean), standard deviation or variance, and
shape

Figure S6.1
Frequency

Central tendency Variation Shape

Weight Weight Weight


Samples
To measure the process, we take samples
and analyze the sample statistics following
these steps
(d) If only natural causes
of variation are
present, the output of
a process forms a Frequency
distribution that is Prediction
stable over time and is
predictable

Weight
Figure S6.1
Samples
To measure the process, we take samples
and analyze the sample statistics following
these steps
?
?? ??
(e) If assignable causes are ? ?
present, the process ?
? ?
?
? ?
output is not stable over ??? ??
?
time and is not Frequency
predicable Prediction

Weight
Figure S6.1
Control Charts
Constructed from historical data, the
purpose of control charts is to help
distinguish between natural variations
and variations due to assignable
causes
Process Control
(a) In statistical
control and
capable of
Frequency producing within
control limits
Lower control limit Upper control limit
(b) In statistical
control but not
capable of
producing within
control limits

(c) Out of control

Size
(weight, length, speed, etc.) Figure S6.2
Types of Data
Variables Attributes
 Characteristics that  Defect-related
can take any real characteristics
value  Classify products
 May be in whole or as either good or
in fractional bad or count
numbers defects
 Continuous random  Categorical or
variables discrete random
variables
Central Limit Theorem
Regardless of the distribution of the
population, the distribution of sample
means drawn from the population will tend
to follow a normal curve
=
1. The mean of the sampling distribution (x) =
will be the same as the population mean m x=m

2. The standard deviation of the sampling


distribution (s-x) will equal the population
standard deviation (s) divided by the s
square root of the sample size, n sx- =
n
Population and Sampling
Distributions
Three population Distribution of
distributions sample means
Mean of sample means = x
Beta
Standard
deviation of s
Normal the sample = sx = n
means

Uniform

| | | | | | |

-3sx -2sx -1sx x +1sx +2sx +3sx


95.45% fall within ± 2sx
99.73% of all x
fall within ± 3sx Figure S6.3
Sampling Distribution
Sampling
distribution
of means

Process
distribution
of means

x=m
(mean)
Figure S6.4
Control Charts for Variables
 For variables that have
continuous dimensions
 Weight, speed, length,
strength, etc.

 x-charts are to control


the central tendency of the process
 R-charts are to control the dispersion of
the process
 These two charts must be used together
Setting Chart Limits
For x-Charts when we know s
Upper control limit (UCL) = x + zsx
Lower control limit (LCL) = x - zsx
where x = mean of the sample means or a target value set for
the process
z = number of normal standard deviations
sx = standard deviation of the sample means
= s/ n
s = population standard deviation
n = sample size
Setting Control Limits
Hour 1 Hour Mean Hour Mean
Sample Weight of 1 16.1 7 15.2
Number Oat Flakes 2 16.8 8 16.4
1 17 3 15.5 9 16.3
2 13 4 16.5 10 14.8
3 16 5 16.5 11 14.2
4 18 6 16.4 12 17.3
n=9 5 17
6 16 For 99.73% control limits, z = 3
7 15
8 17 UCLx = x + zsx = 16 + 3(1/3) = 17 ozs
9 16
Mean 16.1 LCLx = x - zsx = 16 - 3(1/3) = 15 ozs
s= 1
Setting Control Limits
Control Chart
for sample of Variation
Out of due to
9 boxes control assignable
causes
17 = UCL

Variation due
16 = Mean to natural
causes
15 = LCL

Variation
| | | | | | | | | | | |
due to
1 2 3 4 5 6 7 8 9 10 11 12 Out of assignable
Sample number control causes
Setting Chart Limits
For x-Charts when we don’t know s

Upper control limit (UCL) = x + A2R


Lower control limit (LCL) = x - A2R

where R = average range of the samples


A2 = control chart factor found in Table S6.1
x = mean of the sample means
Control Chart Factors
Sample Size Mean Factor Upper Range Lower Range
n A2 D4 D3
2 1.880 3.268 0
3 1.023 2.574 0
4 .729 2.282 0
5 .577 2.115 0
6 .483 2.004 0
7 .419 1.924 0.076
8 .373 1.864 0.136
9 .337 1.816 0.184
10 .308 1.777 0.223
12 .266 1.716 0.284
Table S6.1
Setting Control Limits
Process average = x = 12 ounces
-
Average range R = .25
Sample size n = 5
Setting Control Limits
=
Process average x = 12 ounces
-
Average range R = .25
Sample size n = 5

UCLx
= -
= x + A2R
= 12 + (.577)(.25)
= 12 + .144
= 12.144 ounces

From Table
S6.1
Setting Control Limits
Process average x = 12 ounces
Average range R = .25
Sample size n = 5

UCLx = x + A2R UCL = 12.144


= 12 + (.577)(.25)
= 12 + .144
= 12.144 ounces
Mean = 12

LCLx = x - A2R LCL = 11.857


= 12 - .144
= 11.857 ounces
R – Chart

 Type of variables control chart


 Shows sample ranges over time
 Difference between smallest and
largest values in sample
 Monitors process variability
 Independent from process
mean
Setting Chart Limits
For R-Charts

Upper control limit (UCLR) = D4R


Lower control limit (LCLR) = D3R
where
R = average range of the samples
D3 and D4 = control chart factors from Table S6.1
Setting Control Limits
Average range R = 5.3 pounds
Sample size n = 5
From Table S6.1 D4 = 2.115, D3 = 0

UCLR = D4R UCL = 11.2


= (2.115)(5.3)
= 11.2 pounds
Mean = 5.3

LCLR = D3R LCL = 0


= (0)(5.3)
= 0 pounds
Mean and Range Charts
(a)
These (Sampling mean is
sampling shifting upward but
distributions range is consistent)
result in the
charts
below
UCL
(x-chart
x-chart detects shift in
central
LCL tendency)
UCL
(R-chart does not
R-chart detect change in
mean)
LCL
Figure S6.5
Mean and Range Charts
(b)
These
sampling (Sampling
distributions mean is
result in the constant but
charts dispersion is
below increasing)
UCL
(x-chart does not
x-chart detect the
increase in
LCL dispersion)
UCL
(R-chart detects
R-chart increase in
dispersion)
LCL
Figure S6.5
Steps In Creating Control Charts
1. Take samples from the population and compute the
appropriate sample statistic
2. Use the sample statistic to calculate control limits and draw
the control chart
3. Plot sample results on the control chart and determine the
state of the process (in or out of control)
4. Investigate possible assignable causes and take any
indicated actions
5. Continue sampling from the process and reset the control
limits when necessary
Control Charts for Attributes
 For variables that are categorical
 Good/bad, yes/no,
acceptable/unacceptable
 Measurement is typically counting
defectives
 Charts may measure
 Percent defective (p-chart)
 Number of defects (c-chart)
Control Limits for p-Charts
Population will be a binomial distribution,
but applying the Central Limit Theorem
allows us to assume a normal distribution
for the sample statistics

UCLp = p + zsp^ p(1 - p)


sp^= n
LCLp = p - zsp^
where p = mean fraction defective in the sample
z = number of standard deviations
sp^ = standard deviation of the sampling distribution
n = sample size
p-Chart for Data Entry
Sample Number Fraction Sample Number Fraction
Number of Errors Defective Number of Errors Defective
1 6 .06 11 6 .06
2 5 .05 12 1 .01
3 0 .00 13 8 .08
4 1 .01 14 7 .07
5 4 .04 15 5 .05
6 2 .02 16 4 .04
7 5 .05 17 11 .11
8 3 .03 18 3 .03
9 3 .03 19 0 .00
10 2 .02 20 4 .04
Total = 80
80 (.04)(1 - .04)
p= = .04
(100)(20) sp^ = = .02
100
p-Chart for Data Entry
UCLp = p + zsp^ = .04 + 3(.02) = .10
LCLp = p - zsp^ = .04 - 3(.02) = 0
.11 –
.10 – UCLp = 0.10
.09 –
Fraction defective

.08 –
.07 –
.06 –
.05 –
.04 – p = 0.04
.03 –
.02 –
.01 – LCLp = 0.00
| | | | | | | | | |
.00 –
2 4 6 8 10 12 14 16 18 20
Sample number
p-Chart for Data Entry
UCLp = p + zsp^ = .04 + 3(.02) = .10
Possible assignable
LCLp = p - zsp^ = .04 - 3(.02) causes
= 0 present
.11 –
.10 – UCLp = 0.10
.09 –
Fraction defective

.08 –
.07 –
.06 –
.05 –
.04 – p = 0.04
.03 –
.02 –
.01 – LCLp = 0.00
| | | | | | | | | |
.00 –
2 4 6 8 10 12 14 16 18 20
Sample number
Control Limits for c-Charts
Population will be a Poisson distribution,
but applying the Central Limit Theorem
allows us to assume a normal distribution
for the sample statistics

UCLc = c + 3 c LCLc = c - 3 c

where c = mean number defective in the sample


c-Chart for Cab Company
c = 54 complaints/9 days = 6 complaints/day

UCLc = c + 3 c 14 – UCLc = 13.35

Number defective
=6+3 6 12 –
= 13.35 10 –
8 –
6 – c= 6
LCLc = c - 3 c 4 –
=6-3 6 2 – LCLc = 0
=0 0 –| | | | | | | | |
1 2 3 4 5 6 7 8 9
Day
Managerial Issues and
Control Charts

Three major management decisions:

 Select points in the processes that


need SPC
 Determine the appropriate
charting technique
 Set clear policies and procedures
Which Control Chart to Use
Variables Data
 Using an x-chart and R-chart:
 Observations are variables
 Collect 20 - 25 samples of n = 4, or n =
5, or more, each from a stable process
and compute the mean for the x-
chart and range for the R-chart
 Track samples of n observations each
Which Control Chart to Use
Attribute Data
 Using the p-chart:
 Observations are attributes that can
be categorized in two states
 We deal with fraction, proportion, or
percent defectives
 Have several samples, each with
many observations
Which Control Chart to Use
Attribute Data
 Using a c-Chart:
 Observations are attributes whose
defects per unit of output can be
counted
 The number counted is a small part
of the possible occurrences
 Defects such as number of blemishes
on a desk, number of typos in a page
of text, flaws in a bolt of cloth
Patterns in Control Charts

Upper control limit

Target

Lower control limit

Normal behavior. Process is “in


control.”
Figure S6.7
Patterns in Control Charts

Upper control limit

Target

Lower control limit


One plot out above (or
below). Investigate for cause.
Process is “out of control.”
Figure S6.7
Patterns in Control Charts

Upper control limit

Target

Lower control limit


Trends in either direction, 5
plots. Investigate for cause of
progressive change.
Figure S6.7
Patterns in Control Charts

Upper control limit

Target

Lower control limit


Two plots very near lower (or
upper) control. Investigate for
cause.
Figure S6.7
Patterns in Control Charts

Upper control limit

Target

Lower control limit


Run of 5 above (or below)
central line. Investigate for
cause.
Figure S6.7
Patterns in Control Charts

Upper control limit

Target

Lower control limit


Erratic behavior. Investigate.

Figure S6.7
Process Capability
 The natural variation of a process
should be small enough to produce
products that meet the standards
required
 A process in statistical control does not
necessarily meet the design
specifications
 Process capability is a measure of the
relationship between the natural
variation of the process and the design
specifications
Process Capability Ratio
Upper Specification - Lower Specification
Cp =
6s

 A capable process must have a Cp of


at least 1.0
 Does not look at how well the process
is centered in the specification range
 Often a target value of Cp = 1.33 is
used to allow for off-center processes
 Six Sigma quality requires a Cp = 2.0
Process Capability Ratio
Insurance claims process
Process mean x = 210.0 minutes
Process standard deviation s = .516 minutes
Design specification = 210 ± 3 minutes

Upper Specification - Lower Specification


Cp = 6s
Process Capability Ratio
Insurance claims process
Process mean x = 210.0 minutes
Process standard deviation s = .516 minutes
Design specification = 210 ± 3 minutes

Upper Specification - Lower Specification


Cp = 6s

213 - 207
= 6(.516) = 1.938
Process Capability Ratio
Insurance claims process
Process mean x = 210.0 minutes
Process standard deviation s = .516 minutes
Design specification = 210 ± 3 minutes

Upper Specification - Lower Specification


Cp = 6s

213 - 207
= 6(.516) = 1.938 Process is
capable
Process Capability Index

Upper Lower
Specification - x x- Specification
Cpk = minimum of Limit , Limit
3s
, 3s

 A capable process must have a Cpk of at


least 1.0
 A capable process is not necessarily in the
center of the specification, but it falls within
the specification limit at both extremes
Process Capability Index
New Cutting Machine
New process mean x = .250 inches
Process standard deviation s = .0005 inches
Upper Specification Limit = .251 inches
Lower Specification Limit = .249 inches
Process Capability Index
New Cutting Machine
New process mean x = .250 inches
Process standard deviation s = .0005 inches
Upper Specification Limit = .251 inches
Lower Specification Limit = .249 inches

(.251) - .250
Cpk = minimum of ,
(3).0005
Process Capability Index
New Cutting Machine
New process mean x = .250 inches
Process standard deviation s = .0005 inches
Upper Specification Limit = .251 inches
Lower Specification Limit = .249 inches

(.251) - .250 .250 - (.249)


Cpk = minimum of ,
(3).0005 (3).0005

Both calculations result in


New machine is
.001
Cpk = = 0.67 NOT capable
.0015
Interpreting Cpk

Cpk = negative number

Cpk = zero

Cpk = between 0 and 1

Cpk = 1

Cpk > 1
Figure S6.8
CASE 8:ALABAMA AIRLINES’
ON-TIME SCHEDULE

I. SUMMARY OF THE REPORT


 Alabama Airlines opened its door in
December, 2001 as a commuter service with
its headquarters and only hub located in
Birmingham. It joined the growing number of
short-haul, point airlines, including Lone Star,
Comair, Atlantic Southeast, and Skywest.

 former pilots who are David Douglas (who
had been with non-defunct Midway
Airlines) and Michael Hanna (formerly with
Continental). One of their top competitive
priorities is considering the on-time arrivals.
The airline defines “on-time” to mean any
arrival that is within 20 minutes of the
scheduled time. Mike decided to
personally monitor Alabama Air’s
performance. Each week for the past 30
weeks, Mike Hanna checked a random
sample of 100 flight arrivals for on-time
performance.
II. PROBLEMS IDENTIFIED
Mike Hanna wants to know if the quality of
service of the on-time performance of the
Alabama Airlines is still in control based from the
firm’s and industry’s set control limits.
III. ANALYSIS
1.) Using p-chart
@ 95% confidence interval; z = 1.645 (based from
the table of Area of Normal Curve)

The control limits are given (for a 95% confidence


interval; 95% = 1.645) are:
UCL = 0.04 + (1.645 x 0.0196) = 0.07

LCL = 0.04 – (1.645 x 0.0196) = 0.01


FIRM’S CONTROL LIMITS

OUT OF CONTROL

OUT OF CONTROL
2.) and 3.)

AIRLINE INDUTRY’S CONTROL LIMITS for flights that


are not on time:
UCL = 0.1000
LCL = 0.0400
OUT OF CONTROL
3.) No, not the entire sample falls inside the
Alabama Airlines’ control limit. The firm should
check the reason why it falls outside the
control limits computed and given.
4.) Mike Hanna needs to report, based on the
quality of service,that the airlines meet neither
its own standards nor the industry standards.
IV. CONCLUSIONS AND RECOMMENDATIONS
Based on the data and control limits given,
Alabama Airlines didn’t meet neither its own
standards nor the industry standards. We
recommend them to make a thorough study
about the problem and revise the control limits or
make a necessary action to avoid the out of
control.

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