Quality & Performance

Chapter- 3 MGT 307

Operations Management
Processes & Supply Chains
Krajewski, Malhotra, Ritzman 11th edition

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Why we focus on Quality & Performance?

Many organizations spend significant time, money

and effort on systems, training and
organizational change to improve the quality
and performance of their processes.

If the organization failed to ensure quality it

creates Defects, incur Costs and decrease
Customer Satisfactions finally suffer with
Process performance.
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 What is Quality?
A term used by the customers to describe their
general satisfaction with a service or product.

See Video titled as “Example of quality

management .”

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 Total Quality Management (TQM)

Customer Satisfactions
Three Principles of TQM

Employee
Involvement

Continuous Improvement

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 Total Quality Management (Cont..)
A) Customer Satisfactions- in general customer use the
term “Quality” to describe their level of satisfactions.
“Quality has multiple dimensions in the mind of a
customer.”
How we can ensure customer satisfactions ?
• Consistency in quality
• Adding Value
• Reliability
• Support / Customer service
• Empathy / Customer relations/Psychological Impression

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 How we can ensure customer satisfaction?

C V

R
S E

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 Total Quality Management (Cont..)
B) Employee Involvement- it is a key tactic for
improving processes and quality.
How we can ensure employee Involvement?
• Dynamic Organizational culture
• Empowering employee/ increasing problem
solving ability
• Encouraging team work

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 Total Quality Management (Cont..)
C) Continuous Improvement- it is the
philosophy of continually seeking ways to
improve process.
• KAIZEN
• KANBAN / JUST-IN-TIME (JIT)
• PDCA/PDSA cycle/ Deming Wheel
• SIX SIGMA
• SPC (Statistical Process Control)
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 Continuous Improvement

PDCA, sometimes called PDSA, the

"Deming Wheel," or "Deming
Cycle," was developed by renowned
management consultant Dr William
Edwards Deming in the 1950s.
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 Deming Wheel

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 Deming Wheel
1. Plan: First, you need to identify and
understand your problem, or the opportunity
that you want to take advantage of it.
2. Do: Once you've identified a potential
solution, test it with a small-scale pilot
project. This will allow you to assess whether
your proposed changes achieve the desired
outcome, with minimal disruption to the rest
of your operation if they don't.
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 Deming Wheel (Cont..)
3. Check/ Study: At this stage, you analyze your pilot
project's results against the expectations that you
defined in Step 1 to assess whether the idea has
worked or not. If it hasn't worked, you return to Step
1. If it has worked, you go on to Step 4.
4. Act: This is where you implement your solution. This
means that your improved process or product
becomes the new baseline, and you continue to look
for ways to make it even better for your organization
or customers.
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 KAIZEN
Kaizen is a Japanese term meaning "change for the better"

Gemba simply refers to the location where value is created,

while Kaizen relates to improvements
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 KAIZEN = sort, straighten, shine, standardize, and sustain

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 Fortune is an American multinational
business magazine.

KAIZEN = sort, straighten, shine, standardize, and sustain

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 SIX SIGMA

Six Sigma is a disciplined, data driven approach and

methodology to eliminate defects from process.

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 Six Sigma Cont…
Features of Six Sigma

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 SPC TOOLS
• One of the most popular tool to apply SPC is
“Control Chart”.
• The control chart is a graph used to study how
a process changes over time. Data are plotted
in time order. A control chart always has a
central line or Nominal line (NCL) for the
average, an upper line for the upper control
limit (UCL), and a lower line for the lower
control limit (LCL).
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06/08/2021 Samples of control chart 23
 Control Chart for Variables
To calculate control chart for variables you should
understand the concept of R-Chart and X Bar
Chart.
• R- Chart monitor process variability and R
stands for “Range”.
• X Bar Chart used to see whether a process
generating output on average or assess process
performance in comparing past and present
performance.
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 Control Chart for Variables Cont…
How to calculate R- Chart ?
Step 1. To calculate the “Range” ( R ) of a
sample data the analyst subtract the smallest
from largest measurement in each sample.
Observation
Sample 1 2 3
1 60 80 65
2 50 30 20
3 40 60 70
4 60 54 44

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 How to calculate R- Chart ?

Therefore,
• R= Largest Value – Smallest value ;
In sample no. 1, R= (80 -60) then we will get the
values of R for each sample;
Observation
Sample 1 2 3 R=(L-S)

1 60 80 65 20
2 50 30 20 30
3 40 60 70 30
4 60 54 44 16
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 How to calculate R- Chart ?

• The Control Limits for the R-Chart are;

1. Upper Control Limit, UCLR =D4 R
2. Average (Nominal) Control Limit, NCLR = R
3. Lower Control Limit, LCLR =D3 R
So, we know, R = R÷n (sample number)

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 How to calculate R ?
Observation
Sample 1 2 3 R=(L-S)

1 60 80 65 20

2 50 30 20 30

3 40 60 70 30

4 60 54 44 16

R= 96

So, R = 96÷ 4
= 24 is the Average value
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 How to calculate R- Chart ?

• Upper Control Limit, UCLR =D4 R

Therefore, UCL R = 2.575x 24
= 61.8 or 62
[Here D4 (2.575) is the constant value
taken from the three Sigma limits table
value for X bar and R Chart]
Hence , Upper Control Limit, UCLR = 62

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 How to calculate R- Chart ?

• Lower Control Limit, LCLR =D3 R

Therefore, LCL R = 0x 24
=0
[Here D3 (0) is the constant value taken from the three
Sigma limits table value for X bar and R Chart]
Hence , Lower Control Limit, LCLR = 0
Ans: UCLR =62
NCLR = 24
LCLR = 0

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 How to use three Sigma Table value for R
Chart and X bar Chart
Observation
Sample 1 2 3 Sample Size

1 60 80 65

2 50 30 20

3 40 60 70

4 60 54 44

You should always focus the Sample Size of the

table for using constant value (D3, D4 and A2 )
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 For practice!
Instruction

• See Solved problem 1, Chapter 3,

page No. 121.

Calculate R Chart.

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 Thank you!!

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