Introduction To Service QUality

Introduction to Operations Management - I
B Mahadevan
Week 5
Quality Management
Six Sigma Quality An introduction
All Rights Reserved, Indian Institute of Management Bangalore
Six Sigma Quality

B Mahadevan
Week 5
An introduction
Generally six sigma quality points to very high quality levels

that defects are a rarity in operations
It also points to
A disciplined way of handling issues in operations
A structured way of addressing quality issues
A trajectory to an unambiguous destination in the quality
management journey in an organization
Introduction

B Mahadevan
Week 5
About Six sigma quality

The moment we talk about quality, the word Six sigma comes to
our mind
A number of progressive companies are working hard to build six
sigma quality level
Motorola and GE are supposed to have pioneered this concept of 6
sigma
Dabbawallahs of Mumbai has baffled the business world with their
six sigma quality standard in their operations involving delivering
200,000 tiffin boxes from home to work place and again from work
place back home every day
What is six sigma?

B Mahadevan
Week 5
A mechanisms to deliver near zero defect in operations using

principles of process control
A defect is an unacceptable state of a product or a service for a
customer
Defect becomes an extraordinarily a rare event
For example a few defects in a million potential opportunity in a
service
One or two defective parts in a million that was produced in a
manufacturing shop

B Mahadevan
Week 5
Why near zero defects?

Criterion
No. of policies issued during the year
Business
Customers
Retail
Customers
Total
247,010
2,520,874
2,767,884
Error Rate
0.50%
1.10%
1.05%
Defective Policies
1,235
27,730
28,965
This implies that at a nearly 99% quality level, 28,965 customers would have been
unsatisfied with the service that they have received from the company during the year.
Source: Company Presentation, Own Research


B Mahadevan
Week 5
Why high levels of quality?

Better
Quality Management System
Superior Quality
control
Fewer
Rework
Less Indirect
costs
Fewer Disruptions
in Operations
High quality
Finished goods
Smoother
Output
Less
inventory
Greater
Productivity
Less inventory, labour, indirect costs & better quality


B Mahadevan
Week 5
Quality Management
Changing Perceptions
Yesterday
It is often uneconomical to make
quality improvements since it brings down
productivity, increases cost and investment.
Today
Productivity goes up and cost comes
down as quality goes up. This fact is
known, but not necessarily to everyone.

B Mahadevan
Week 5
Metrics for Quality Management

PPM and DPMO
If we want defects to really become an extraordinarily a rare

event we can think of two measures:
Manufacturing: Parts per million (PPM) defect rate
Services: Defects per Million Opportunities (DPMO)
Six sigma uses these two measures.
Defects Per Million Opportunities (DPMO)

B Mahadevan
Week 5
If in a process
Number of opportunities for making a defect per unit of execution of
that process = k
Number of units of observation of the process = n
Number of defects that occurred in that process during the
observation = d
d
DPMO then will be =
* 1,000,000
k *n
DPMO Computation Example

B Mahadevan
Week 5
A hotel in a tourist location
Potential opportunities to make a defect in a check-in process

= 11
No. of guests handled during a season = 1,250
Number of defects observed = 357
=
=
1,000,000
357
1,000,000
1,25011
= , .
Premises of Quality Management

B Mahadevan
Week 5
Premise 1: All Quality initiatives must be continuous and data

driven
Premise 2: System of Quality is one of Prevention & Elimination
Not Detection & Correction
Premise 3: The Performance Standard is Zero Defects
Premise 4: The responsibility for Quality lies primarily with those
who produce & deliver products & services

B Mahadevan
Week 5
Six Sigma Program

A six sigma program requires certain enabling
mechanisms for an organization
A structured program for quality management &

improvement
Facilitating mechanisms for the Operations personnel to
own, solve and obliterate the quality problems
Organization structure and mandate for quality
improvement issue on a continuous basis

B Mahadevan
Week 5
DMAIC Methodology
Define
Measure
Control
Analyze
Improve
Source: Mahadevan, B. (2015), Operations Management: Theory & Practice, Pearson Education, 3 rd Edition, pp 575.

B Mahadevan
Week 5
DMAIC Methodology
Define
Define the problem, the requirements, project scope, project charter
Set goals for improvement
Measure
Identify variables to be measured, the type of measurement
Data collection and synthesis
Analyze
Develop a set of tools for analysis
Apply graphical tools of analysis
Identify possible sources of variation and vital few root causes
Explore means of eliminating them
Improve
Generate & validate improvement alternatives
Creating new process maps for the process

Control
Develop control plan
Establish revised standard measures to maintain performance
Develop relevant training plans to maintain standards
Organization for six sigma

B Mahadevan
Week 5
In order that the organization sustainably improves the quality

to near zero defect levels,
A good organizational structure
Mandate to make changes
Ownership of processes and results and
Continuous and closer review are required

B Mahadevan
Week 5
Process Owner
Supervisor or a manager who takes responsibility for various steps of
a process that delivers some output to the customer.
It could be the in a particular work area where the improvement
project has been identified
Team Leader & Members
Team leader (the project leader) and the members will comprise of
the employees in the chosen work area
They will have day-to-day operational control of activities

B Mahadevan
Week 5
In a six sigma organizational structure three terminologies are

used to indicate these organizational entities.
This includes Master Black Belt, Black Belt and Green Belt.
The depth of training and experience differentiates these
three.

B Mahadevan
Week 5
Six sigma coach

A consultant or a senior person in the organization who offers expert knowledge
on various aspects of six sigma.
This includes statistical tools, process design & analysis, change management,
small group improvement, use of QC tools for improvement etc.
Sponsor
A member of the senior management who oversees the overall progress and
implementation
Helps the team refine the project scope, sorts out issues cutting across other
parts of the organization, approves projects and provides the necessary support
in terms of resources

B Mahadevan
Week 5
Quality Management
Total Quality Management
Quality Gurus

B Mahadevan
Week 5
Demings contributions
New perceptions to quality management

Critical Role of Top Management
Plan Do Check Act (PDCA) Cycle
14 point agenda for quality improvement
Considered father of Japanese Quality Management Systems
Highest Award in Japan named after him
Jurans Quality Trilogy

B Mahadevan
Week 5
Quality planning: the process of preparing to meet quality

goals
Quality control: the process of making quality goals during
operations; importance of using statistical methods
Quality improvement: the process of breaking through to
unprecedented levels of performance
Philip Crosby

B Mahadevan
Week 5
Absolutes of Quality
I Absolute: Definition of quality is conformance to standards

II Absolute: The system of Quality is prevention
III Absolute: The performance standard is zero defects
IV Absolute: Measurement of Quality is the price of nonconformance
V Absolute: There is no such thing as Quality Problem

B Mahadevan
Week 5
Other quality gurus

Karou Ishikawa
Cause & Effect (Fishbone) Diagram
Cause & Effect Diagram with Action Card (CEDAC)
Shigeo Shingo
Poka Yoke
Genichi Taguchi
Loss function
Design of experiments
Quality Revolution in the 1980s

B Mahadevan
Week 5
Salient features
Alternative ideas about what constitutes good quality

Newer methods to build quality into products and services that
we offer
New tools to assess performance of an organization with
respect to quality
Changed roles of middle managers and supervisors from one of
control to facilitation of the process of building quality into the
products and services
Total Quality Management (TQM)

B Mahadevan
Week 5
The definition points to four critical aspects of any good TQM

program
Role of Top Management
Employee Involvement & Training
Use of Tools & Techniques
Development of a good quality system

B Mahadevan
Week 5
Total Quality Management

Elements
Role of
Top Management
Quality
System
Employee Involvement
Training & Team Work
Tools & Techniques
Role of Top Management

B Mahadevan
Week 5
Total in TQM refers to every one, every where and every

time. This will be possible only when the Top Management
gets actively involved in this process
Possible roles for Top Management
Lead from the front by example
Signal the importance of quality for the organization
Help Middle Management resolve difficult trade-offs by
providing guidance & directions
Employee Involvement

B Mahadevan
Week 5
It is about creating certain structures, culture and practices to make

employee involvement a reality
Build a culture of process ownership facilitate this process
Role of middle management and experts go through some change
Provide training on some tools & techniques that people can use in
their work place to address quality issues
Build a climate and culture for team working
Put in a system of project by project continuous improvement

B Mahadevan
Week 5
Elements of a Quality Assurance System

Understand customer
needs
Translate them to
meaningful measures
for the operating
system
Mechanisms for
identifying quality
problems
Tools & techniques for

the employees
For tracking problems
to their root causes
Identifying corrective
measures
Top Management
Commitment to
Quality
Quality
Assurance
System
Employee involvement
for continuous focus
on quality
improvement
Quality
Certifications &
Benchmarking
exercises
Documentation of all
quality related
initiatives for
continuous learning &
improvement
Methods for
preventing
recurrence of
problems
Tools for Quality Management

B Mahadevan
Week 5
Available tools for Quality Management can be broadly categorized

into two:
Quality Management @ Operations
Highlighting Problems
Identifying Improvement Opportunities
Analyzing problems & their root causes
Quality Planning & Design
Building Quality into Products & Services
Strategic Planning

B Mahadevan
Week 5
Quality Management Tools

Purpose of Use
Quality Control
Highlighting Problems
Control Charts
Identifying Improvement
Opportunities
Histograms
Check Sheets
Pareto Diagrams
Scatter Diagrams
Graphs
Analyzing problems & their

root causes
Cause & Effect (Fishbone)

Diagram
CEDAC
Quality Management
Affinity Diagram
Relationship Diagram
Building Quality into Products

& Services
Tree Diagram
Matrix Diagram
Matrix Data Analysis
Process Decision Program Chart (PDPC)
Arrow Diagram
Poka Yoke (Fool Proofing)
Strategic Planning
Quality Function Deployment (QFD)

Quality Costing
Causes for adjustment

snags
Leakage
Missing
Fouling
Reworks
Poor routing
Loose fitting
Number of
occurrences
25
24
5
26
5
15

B Mahadevan
Week 5
Histogram
Causes for adjustment snags

Number of occurences
25
25.0
26.0
24.0
20
15
15.0
10
05
5.0
LEAKAGE
MISSING
5.0
FOULING
REWORKS
Categories of problems
Source: Mahadevan, B. (2015), Operations Management: Theory & Practice, Pearson Education, 3rd Edition, pp 339.
POOR
ROUTING
LOOSE
FITTING
05

B Mahadevan
Week 5
Pareto Diagram
Adjustment Snags Analysis

100.0
90.0
25.0
80.0
70.0
20.0
60.0
15.0
50.0
40.0
10.0
30.0
20.0
5.0
Cumulative occurences (%)
30.0
10.0
0.0
0.0
Reworks
Leakage
Missing
Loose fitting Poor routing
Fouling

B Mahadevan
Week 5
Number of
Causes for rework
occurrences
Lack of drawing clarity
23
Tooling problems
15
Process control issues
6
Design issues
33
Vendor related problems
23
30.0
25.0
20.0
15.0
10.0
5.0
0.0
Lack of
drawing
clarity
Tooling
problems
Process
control
issues
Design
issues
Reworks Analysis
35.0
Vendor
related
problems
30.0
25.0
20.0
15.0
10.0
5.0
0.0
Design
issues
Lack of Vendor Tooling Process

drawing related problems Control
clarity problems
Issues
100.0
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
Cumulative occurrences (%)
Causes for Rework
35.0
Rework Analysis

B Mahadevan
Week 5
Cause and Effect Diagram

A generic representation
Materials
Work methods
Quality
Equipment
Labour
Cause
Effect

B Mahadevan
Week 5
Cause & Effect Diagram

An example
Cause Effect Diagram with Action Card (CEDAC)

B Mahadevan
Week 5
An example
Poka Yoke

B Mahadevan
Week 5
Poka Yoke, which means fool proofing is a technique which

works on the basic premise that several defects that creep into
an operation are indeed avoidable
Further, Errors & Defects have a Cause & Effect relationship
Poka Yoke ensures that a defect once detected can be
eliminated once and for all by modifying the process or design
of the product or service
POKA YOKE
An example

B Mahadevan
Week 5
Matrix Diagram

B Mahadevan
Week 5
A two dimensional matrix to portray and analyze a problem at

a strategic level
Once the two dimensions are identified it lends itself to the
analysis of the problem in a structured way
A visual approach that helps management to identify problems
and possible solutions

B Mahadevan
Week 5
Matrix Diagram: An Example
Same
Better
A - Product cost
B - Product quality
C - Engg. Quality
D - Enquiry lead time
E - Mfg. lead time
F - Delivery reliability
G - Design flexibility
H - Delivery flexibility
I - Volume flexibility
J - Service support
Worst
Performance of the company
Earth Moving Equipment Manufacturer
Less
Important
Qualifying
Order
Winning
Importance of the Attribute


B Mahadevan
Week 5
Quality Function Deployment (QFD)

The four houses of quality
Links
customer
needs to
design
attributes
Links
design
attributes to
actions firms
can take
Links
actions to
implementaction
decisions
Links
implementaction to
process
plans

B Mahadevan
Week 5
House of Quality
5. Tradeoffs
2. Importance
1. Customer
requirements
3. Product
characteristics
4. Relationship
matrix
6. Benchmarks
7. Technical assessment &

target values

B Mahadevan
Correlation:
Week 5
House of
Quality
+
-+
Less time during peak hours
Easy to carry home
Quick order processing
++
++
--
Maintain current level
Increase the counters by

one
Maintain current level
Reduce time to 2 minutes
--
Reduce it by 10% of the

current level
A,B
A,B
X,B
X,A,B
A B
X
X- Own Company
A - Competitor A
B - Competitor B
(5 is best)
1
2
3
A
Target Values
++
++
Maintain current Level
Importance Weighting
Number of tables
available
Enough space to sit & eat
Competitive Evaluation
Number of service
counters in peak time
++
Thickness of packing
material
++
Steaming hot
Order processing time
Time taken to cook the

food
Customer
Requirements
Temperature of cooked
item
Technical
Characteristics
An
illustration
for a
Restaurant
++: Strong Positive

+: Positive
-: Negative
--: Strong Negative
A
B
X
A B
Importance Scale:
Strong: 9
Medium: 3
Small: 1
5
Technical Evaluation
(5 is best)

B Mahadevan
Week 5
Quality Management
Statistical Process Control (SPC) - Fundamentals
SPC An Introduction

B Mahadevan
Week 5
Statistics is at the core of modern quality management

Helps operationalize some decisions and keep performance and
outcome with in limits
Provides basic framework to systematically analyze the quality
problem in various business processes
A good mechanism to highlight either an existing quality
problem or an impending problem

B Mahadevan
Week 5
Variations in Business Processes
Two types of variations occur in business processes; Common

Causes & Assignable Causes
Chance variations due to common causes

causes due to random events that cannot be controlled
Ambient temperature and humidity
Normal wear and tear
Statistical Process Control

B Mahadevan
Week 5
Business processes always exhibit variations

Filling a 500 gms detergent powder in a sachet
Guest check-out time in a 5 star hotel
SPC is a collective set of tools & techniques used to develop a
quality assurance system that enables one to make meaningful
sense of these variations

B Mahadevan
Week 5
Assignable Causes
Non-random variations due to assignable causes
When observed variations are not statistically found to be due to

random events, it clearly points to the existence of assignable
causes
Errors due to operator skill level differences
Changes in the operating condition of an equipment
Changes introduced in the standard operating procedure
Issues addressed thru SPC

B Mahadevan
Week 5
Key issues addressed in SPC based quality assurance system:

How do we know whether the observed changes are due
to random variations or assignable causes?
How does one ensure that the random events are indeed
rare events?
Quality Assurance using SPC

B Mahadevan
Week 5
Some terminologies: Designed Standard
Centre of specification limits (Target)
Upper Specification Limit (USL)

Lower Specification Limit (LSL)
(USL LSL): Desired tolerance
This represents the Voice of the Customer
Voice of the Customer

B Mahadevan
Week 5
Examples
Customer check-out time

in a 5 star Hotel: 90
20
Target = 90 seconds
USL = 110 seconds
LSL = 70 Seconds
Desired tolerance is
70 110 Seconds
Diameter of the pen

manufactured: 8
0.5
Target = 8.0 millimeter
USL = 8.5 millimeter
LSL = 7.5 millimeter
Desired tolerance is
7.5 8.5 millimeter
Quality Assurance using SPC

B Mahadevan
Week 5
Some terminologies: Status of process
Centre of the process (Process Average)
Upper Control Limit (UCL)

Lower Control Limit (LCL)
(UCL LCL): Spread of the process
This represents the Voice of the Process
SPC Attribute to study

B Mahadevan
Week 5
At the outset the questions that we need to address

are:
What is the attribute in a process that needs to be measured
for the purpose of quality control?
How should we measure for the purpose of analysis?

B Mahadevan
Week 5
Characteristics for process control

Some examples
Type of Applications
Characteristic for Measurement
Manufacturing
Number of defects in the product

Conformance to test specifications
Number of missing elements
Service Systems
Number of defects in various business

processes
Errors in processing documents
Conformance to waiting time/lead time
related specifications
Choosing a characteristic

B Mahadevan
Week 5
Examples from service industry
Time taken to complete the

Settlement of claims in insurance
Loan approval in a financial institution
Patient admission process in a hospital
Voice of the customer:
How to measure the quality performance in this case?
Methods of measuring defects

B Mahadevan
Week 5
Method A: Count the number of occasions patients were

indeed admitted after 26 minutes as defects in the process.
In 100 observations, let us say there were 7 occasions this means
the proportion of defects is 7%
Method B: Make detailed measurements of the actual

admission time in the 100 cases
24.95, 21.87, 25.45, 19.75
Use this data and do analysis
Measurement Methods

B Mahadevan
Week 5
Attribute Based
Simple clustering of the characteristic into a few categories

(such as good or bad)
Measurements are easy to make, quick & less expensive
Will reveal very little information about the process
Measurement Methods

B Mahadevan
Week 5
Variable Based
Detailed observation of the characteristic (such as

length, diameter, weight, time)
This is called variable based
Measurement will be expensive and more time
consuming
Will provide a wealth of information about the process
Types of Charts

B Mahadevan
Week 5
For attribute based measures we have

p chart
C chart
For variable based measures we have
R Chart
Before we see the specifics of each of these let us get to know
the process of setting up a control chart
Logic of Charts

B Mahadevan
Week 5
We use certain well known statistical principles pertaining to a

random process
The mean (which is the measure of central tendency)
The Standard Deviation (which is a measure of dispersion)
In a Normal Distribution, the area covered within
. will be 99.73%
Normal Distribution

B Mahadevan
Week 5
Logic of Charts

B Mahadevan
Week 5
What it means is that any variations happening in this range

has a 99.73 probability that it is due to random events.
Once we cross these limits the probability that the variation is
due to random is so low that we begin to suspect there is an
assignable cause
This is an indication that the process may be out of control

B Mahadevan
Week 5
Control Chart
A generalized representation
+

Plot of
sample data
Process Average
Process in a state of Statistical Control


B Mahadevan
Week 5
Control Chart
A generalized representation
Out of control
indication
Process Average
Process not in a state of Statistical Control


B Mahadevan
Week 5
Quality Management
Setting up a Control Chart

B Mahadevan
Week 5
Setting up a process control system

Choose the characteristic
for process control
Attribute Based
Choose the
Measurement method Variable Based
P chart, c chart
,
Choose the type of

Control Chart
Collect Data,
Establish Control Limits
Plot the data & Analyse


B Mahadevan
Week 5
Step 1: Choose the measurement characteristic:

Diameter of a cylindrical component (cm)
Step 2: Choose the measurement method

Actual measurement of diameter (variable based)
Step 3: Choose the Control Chart:

Step 4: Decide on a Sampling Plan
Step 5: Collect Data & Establish Control Limits

B Mahadevan
Week 5
Data for the chart
Sampling Plan
Sample every 20 minutes
Each time take five
consecutive samples
(Sample size is 5)
Take 15 such samples
Sub-groups
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
1
12.45
12.55
12.46
12.38
12.37
12.45
12.46
12.44
12.44
12.35
12.36
12.51
12.38
12.41
12.37
Observations in each sub-group*

2
3
4
12.39
12.55
12.38
12.39
12.40
12.38
12.44
12.44
12.35
12.39
12.55
12.38
12.44
12.45
12.41
12.37
12.44
12.38
12.38
12.35
12.50
12.39
12.37
12.45
12.55
12.44
12.37
12.38
12.45
12.44
12.37
12.41
12.40
12.36
12.41
12.37
12.50
12.45
12.37
12.37
12.45
12.40
12.44
12.45
12.41
5
12.40
12.44
12.36
12.40
12.41
12.41
12.44
12.39
12.55
12.38
12.40
12.39
12.44
12.36
12.37
* All values in the table in centimeters


B Mahadevan
Week 5
Extract the process parameters

Subgroups
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Observations in each sub-group

1
2
3
4
5
12.45
12.39
12.55
12.38
12.40
12.55
12.39
12.40
12.38
12.44
12.46
12.44
12.44
12.35
12.36
12.38
12.39
12.55
12.38
12.40
12.37
12.44
12.45
12.41
12.41
12.45
12.37
12.44
12.38
12.41
12.46
12.38
12.35
12.50
12.44
12.44
12.39
12.37
12.45
12.39
12.44
12.55
12.44
12.37
12.55
12.35
12.38
12.45
12.44
12.38
12.36
12.37
12.41
12.40
12.40
12.51
12.36
12.41
12.37
12.39
12.38
12.50
12.45
12.37
12.44
12.41
12.37
12.45
12.40
12.36
12.37
12.44
12.45
12.41
12.37
Average of all 15 observations
Average Range
(R)
12.434
0.17
12.432
0.17
12.410
0.11
12.420
0.17
12.416
0.08
12.410
0.08
12.426
0.15
12.408
0.08
12.470
0.18
12.400
0.10
12.388
0.05
12.408
0.15
12.428
0.13
12.398
0.09
12.408
0.08
12.417 0.119

B Mahadevan
Week 5

Table for selecting values for establishing the
control limits for *
Sample
size (n)
2
3
4
5
6
7
8
9
10
A2
D3
D4
1.880
1.023
0.729
0.577
0.483
0.419
0.373
0.337
0.308
0
0
0
0
0
0.076
0.136
0.184
0.223
3.268
2.574
2.282
2.114
2.004
1.924
1.864
1.816
1.777
* Source: Juran, J.M. and F.M. Gryna, (1995), Quality

Planning and Analysis, Tata McGraw-Hill, 3rd Edition,
New Delhi, pp 385.

B Mahadevan
Week 5
In our example,
A2 = 0.577; D3 = 0; D4 = 2.144
* All values in centimeters

B Mahadevan
Week 5
X-bar Chart
Mean Diameter (cms)
Sam ple Means
Centre Line
UCL
LCL
12.50
12.49
12.48
12.47
12.46
12.45
12.44
12.43
12.42
12.41
12.40
12.39
12.38
12.37
12.36
12.35
12.34
1
9
8
7
Sample Number
10
11
12
13
14
15

B Mahadevan
Week 5
R Chart
An example
R Chart
Sample Range
Centre Line
UCL
LCL
0.28
0.26
Mean Range (cms)
0.24
0.22
0.20
0.18
0.16
0.14
0.12
0.10
0.08
0.06
0.04
0.02
0.00
1
Sample Number
10
11
12
13
14
15

B Mahadevan
Week 5
P Chart
Suppose the same cylinders are subjected to a much simpler

testing of merely classifying them as defect
When the cylinder is beyond the acceptable limits (too small or
too big in diameter) it is classified as defect
Sampling Plan is as follows:
Sample 100 pieces every 30 minutes for testing
Collect 12 such samples

B Mahadevan
Week 5

Step 1: Choose the measurement characteristic:
Diameter of a cylindrical component (cm)
Step 2: Choose the measurement method

Classify as good or bad (attribute based)
Step 3: Choose the Control Chart:

Step 4: Decide on a Sampling Plan

Step 5: Collect Data & Establish Control Limits

B Mahadevan
Week 5
Data for the chart

Sampling Plan
Sample every 30 minutes
Each time take 100
consecutive samples
Take 12 such samples
Sample no.
Number of defects
1
2
3
4
5
6
7
8
9
10
11
12
10
9
8
11
7
12
7
10
13
12
13
14


B Mahadevan
Week 5
Extract the process parameters

Sample no.
1
2
3
4
5
6
7
8
9
10
11
12
Number of
defects
10
9
8
11
7
12
7
10
13
12
13
14
p
(%)
0.10
0.09
0.08
0.11
0.07
0.12
0.07
0.10
0.13
0.12
0.13
0.14
0.105
Average of all 12 observations

B Mahadevan
Week 5

B Mahadevan
Week 5
P Chart
p Chart
p
Centre Line
UCL
LCL
0.21
Proportion of defects
0.18
0.15
0.12
0.09
0.06
0.03
0.00
1
6
7
Sample No.
10
11
12
C Charts

B Mahadevan
Week 5
Similar to p chart, Instead of proportion of defects, we merely

count the number of defects
Appropriate in certain situations
Number of knots in a square meter of a cloth
Number of scratches in a square meter of a smooth finished
surface etc.
Computing the limits for C Chart

B Mahadevan
Week 5

B Mahadevan
Week 5
Quality Management
Using the Control Charts
Using the Control Charts

B Mahadevan
Week 5
There are two questions that comes to our mind when it

comes to using the control charts:
Is the process of out of control? What are we supposed to
do in that case?
Is there a way we can detect an impending out of control
situation much earlier?

B Mahadevan
Week 5
Process out of control

Points outside the control limit
c Chart
c
Centre Line
UCL
LCL
24
21
Number of defects
18
15
12
9
6
3
0
1
5
6
Sample No.
10
Steps to be taken

B Mahadevan
Week 5
Step 1: Remove the outlier and re-compute the control limits (revise the
chart parameters)
Step 2: Perform a detailed investigation to explore any assignable causes
for the drift in the performance
Step 3: If there are no assignable causes, resume the process with
revised control parameters
Step 4: If there are assignable causes implement countermeasures, and
resume the process
Step 5: Stabilize the process, re-establish control limits and ensure the
process is in control
Early Detection of Problems

B Mahadevan
Week 5
The other question pertains to early detection of an impending

problem
Over several years, some useful rules have been created that
helps operating personnel to detect a possible drift in the
process

B Mahadevan
Week 5
Zones A, B and C
Mean
Zone A
Zone B
Zone C

B Mahadevan
Week 5
When to Stop the Process
One point beyond Zone A

Nine points in a row in Zone C or beyond
Six points in a row, steadily increasing or decreasing
Fourteen points in a row, alternating up & down
Two out of three points in a row in Zone A or beyond
Four out of five points in a row in Zone B and beyond
Fifteen points in a row in Zone C

B Mahadevan
Week 5
Predictive capability of processes

Which process is better?
Process B is better
than Process A
Spread of a process is
indicative of its
capability
Lesser the spread
better is the process

B Mahadevan
Week 5
Predictive capability of processes
Offset
Which process is better?
Process A is better than

Process B
A process that is aligned
closer to the desired
target is likely to be
more capable
Process B
Process A
LSL
Source: Mahadevan, B. (2015), Operations Management: Theory & Practice, Pearson
Education, 3 rd
Target
Edition, pp 592.
USL

B Mahadevan
Week 5
Process Capability
Process Capability is defined by the spread of the process

Potential capability (Cp) is defined as the ratio of the difference
in specification limits to the process spread
Cp =
Specification Range (USL LSL )
Pr ocess Capability
6
Actual capability (Cpk) takes into consideration the extent to

which the process has deviated from the desired target
Cpk =
Pr ocess Centre LSL USL Pr ocess Centre
Min
,
3
3


B Mahadevan
Week 5
Process Capability & Defects

Process Capability Index
(Cpk)
Total Products outside the

specification limits
0.25
453,255 ppm
0.50
133,614 ppm
0.60
71,861 ppm
0.80
16,395 ppm
1.00
2,700 ppm
1.20
318 ppm
1.50
7 ppm
1.70
0.34 ppm
2.00
0.0018 ppm
Source: Quality Planning & Analysis, Juran & Gryna, Chapter 17, 3e
Six sigma Organization

B Mahadevan
Week 5
Cpk is a good measure to predict the defects coming out of a

process
It could be used to target improvements in the process
Suppliers could be asked to submit their Cpk levels and it can
be continuously monitored
A six sigma organization is one which is able to achieve a Cpk
value of 2

B Mahadevan
Week 5
Quality Management
Issues in Service Quality
Service Quality Issues

B Mahadevan
Week 5
Example
A flight that is supposed to take off at 7.30 pm is

getting delayed.
The airline customer relationship officer has kept
the passengers in the dark about the delay.
Further, upon mounting pressure announces a
departure time which never happened.
Service Quality Issues

B Mahadevan
Week 5
Example
A week end program in a business school was a disaster

as it was nowhere near the expectations of the
participants
A number of e-retailers in the US failed miserably during
the Christmas season of 1999. They could not deliver
the Christmas gift before Christmas.
Instead they returned the money paid by the customers
with a $ 50 add on to it and an apology note..
Intangibility

B Mahadevan
Week 5
Performances rather than objects, therefore

precise specs. can be rarely set
Cannot be counted, measured, inventoried,
tested and verified in advance to assure quality
Difficult to understand how consumers perceive
& evaluate their services
Heterogeneity

B Mahadevan
Week 5
Performance vary from producer to producer,

consumer to consumer, day to day
Consistency of behavior from service
personnel is difficult to assure
What firms intend to deliver may be different
from what the consumer receives
Simultaneity

B Mahadevan
Week 5
Not engineered in a plant and then delivered in

tact to the consumer
Quality occurs during service delivery while the
consumer interacts with the service personnel
Consumers input may be critical to quality
The service firm may have less managerial control
in real time
Service Quality

B Mahadevan
Week 5
Some considerations
Service quality is
A measure of how well the service delivered
matches with expectations
Pre-dominantly is a function of perceptions of the
customers
(Example of the weekend course in a Business School)
Service Quality

B Mahadevan
Week 5
Some considerations
Quality evaluations are

Not made solely on the outcome of the service
They also involve evaluation of the process of delivery
(Example of Airline Delays & the way it was handled)
(Example of e-tailers inability to deliver Christmas
Gifts)
Points to difficulty in Service Recovery (after a failure)

B Mahadevan
Week 5
Service Quality
The five gaps model

Expected Service
Gap 5
Consumer
Firm
Perceived Service
Service Delivery
Gap 4
External Communications
to Consumers
Gap 3
Translation of perceptions
into Service Qlty. Specs.
Gap 1
Gap 2
Management perceptions of
Consumer Expectations
Source: Parasuraman, A., Zeithhaml, V.A. and Berry, L.L., (1985), A conceptual model of service quality & its
implications for future research, Journal of Marketing, 49 (4), 41 50.
Gaps in Service Quality

B Mahadevan
Week 5
Why do they occur?
Gap 1: Service firm executives may not always understand

What the consumer wants?
What features a service must have?
What levels of performance?
Gap 2: Means to meet the expectations absent
Knowledge of consumer expectations exist but not the perceived means to deliver
Absence of management commitment to quality
Gap 3: Variability in employee performance

Gap 4: Problems arising out of communication
Firms tend to promise more in communications than what they deliver in reality
Firms tend to neglect to inform consumers of special efforts to assure quality
that are not visible to consumers
Gap 5 = f (Gap 1, Gap 2, Gap 3, Gap 4)
Service Quality

B Mahadevan
Week 5
Concluding Remarks
Service Quality is more challenging than product

quality as it is a function of the perceptions of the
customers
Organizations can use the notion of gaps in service
delivery to identify specific improvement
opportunities in the service delivery process

Introduction To Service QUality

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Introduction to Operations Management - I

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Six Sigma Quality

Introduction to Operations Management - I

Generally six sigma quality points to very high quality levels

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Introduction to Operations Management - I

About Six sigma quality

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What is six sigma?

Introduction to Operations Management - I

A mechanisms to deliver near zero defect in operations using

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Introduction to Operations Management - I

Why near zero defects?

Source: Company Presentation, Own Research

Introduction to Operations Management - I

Why high levels of quality?

Less inventory, labour, indirect costs & better quality

Introduction to Operations Management - I

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Introduction to Operations Management - I

Metrics for Quality Management

If we want defects to really become an extraordinarily a rare

Six sigma uses these two measures.

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Defects Per Million Opportunities (DPMO)

Introduction to Operations Management - I

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DPMO Computation Example

Introduction to Operations Management - I

A hotel in a tourist location

Potential opportunities to make a defect in a check-in process

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Premises of Quality Management

Introduction to Operations Management - I

Premise 1: All Quality initiatives must be continuous and data

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Introduction to Operations Management - I

Six Sigma Program

A structured program for quality management &

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Introduction to Operations Management - I

Introduction to Operations Management - I

Creating new process maps for the process

Organization for six sigma

Introduction to Operations Management - I

In order that the organization sustainably improves the quality

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Organization for six sigma

Introduction to Operations Management - I

Organization for six sigma

Introduction to Operations Management - I

In a six sigma organizational structure three terminologies are

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Organization for six sigma

Introduction to Operations Management - I

Six sigma coach

Introduction to Operations Management - I

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Introduction to Operations Management - I

New perceptions to quality management

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