MEASURE

Cost of poor Quality

COPQ (Cost Of Poor Quality) "In most companies
COPQ runs at about
20 to 40 percent of sales."
100 J.M. Juran 1988

COPQ Cost of poor quality, in percent of revenues

10
PERCENTOFREVENUES

Quality level of company, expressed in sigma

0,1
0 1 2 3 4 5 6
OVERALL SIGMA
•SOURCES: TI, MOTOROLA, VARENNES, MUNCIE, H J HARRINGTON: "POOR QUALITY COSTS", BA TPT EST., ETC

132
 Cost Of Poor Quality
Waste Customer Returns
Rejects Inspection Costs
Testing Costs
Recalls
Rework

0 %
4
Complaint Handling Customer Allowances
Premium Freight Costs
0 - Incorrectly Completed Sales Order
Excessive Field Service Costs
Excessive Overtime
2 Planning Delays
Excess Inventory
Unused Capacity
Pricing or Billing Errors Incorrect orders shipped
Lost goodwill
Overdue Receivables Time with Dissatisfied Customer
Development Cost of Failed Products Delays Late shipments
Employee Turnover Expediting Costs
COPQ - Cost Of Poor Quality
• The Cost Of Prevention
– activities that ensure right product/service
• The Cost Of Appraisal
– detecting errors that occur
• The Cost Of Internal Failures
– correcting work
• The Cost Of External Failures
– material and services with unexpected standard
DPU, TOP, DPO, DPMO
THE CONCEPT OF OPPORTUNITY

• Every possibility of making an error is called an

opportunity
• The total opportunities available for an error to take place
are Number Checked. x Number of Opportunities per unit
• If there are more than 1 Opportunities. The sigma can be
calculated by finding DPMO.
• Knowing DPMO we refer to the DPMO Table to get the
Sigma value
• One could inflate the opportunities, and hence get an
enhanced Sigma But the opportunities .are limited to what
exactly is checked for.
E.g. a sheet is checked for thickness, length & width and
can be rejected for either.Hence the number of
opportunities. is 3
DPMO
DPMO== Defects
Defectsxx10
6
106
Units
Unitschkd.
chkd.xxOpp.
Opp.
A FEW TERMINOLOGIES

• Defect : Any non-conformity in a product or

service
– e.g. Late delivery or no. of Packages rejected
• Units : The nos. checked or inspected
– 100 deliveries were monitored for being late, no. of
units are 100
– 1000 tubes were checked for oversize dia., no. of
units are 1000
• Opportunity : Anything that you measure or check
for.
– Each Finished Package is checked for 4 defects at
final inspection, the no. of opportunities is 4 per
package.
 WHAT IS A DEFECT?

 A defect is any variation of a required

characteristic of the product (or its parts)
or services or process output which is far
enough from its target value to prevent the
product from fulfilling the physical and
functional requirements of the
customer/business, as viewed through the
eyes of your customer/business manager.
DEFINING AN UNIT

An 'unit' may be as diverse as a:

 Piece of equipment
 Line of software
 Order
 Technical manual
 Medical claim
 Wire transfer
 Hours of Work
 A transacted unit
 Customer contact
 No. of opportunities = No. of points checked

 If you don’t check some points then it becomes a

passive opportunity. We should take only active

opportunities into our calculation of defects per

opportunity (d.p.o), and Sigma level.

 TOTAL OPPORTUNITY (TOP)

TOP
TOP == NO.
NO. OF
OF UNITS
UNITS CHECKED
CHECKED xx
NO.
NO. OF
OF OPPORTUNITIES
OPPORTUNITIES OF
OF FALIURE
FALIURE
PER
PER UNIT
UNIT

e.g. If in final inspection 100 packages were checked,

each having 4 opportunities.

TOP = 4 x 100 =400

 DEFECTS PER OPPORTUNITY (DPO)
& DEFECTS PER MILLION OPPORTUNITY
(DPMO)

DPO = DEFECTS
TOP
e.g. If in the above example, Four defects were found

DPO = 4= 0.01
400
DPMO = NO. OF DEFECTS x 10**6
NO. OF UNITS x OPP.
e.g. In the above example DPMO = 4 x 10**6 = 10,000 PPM

100 x 4
DEFECTS PER UNIT (DPU)

DPU = NO. OF DEFECTS

NO. OF UNITS CHECKED

e.g. In the above example DPU = 4/100 = 0.04

 Exercise

CATEGORY DEFECTS UNITS OPP TOP DPU DPMO

TYPE1 10 1000 2
TYPE2 02 1500 1
TYPE3 22 1300 5
TYPE4 25 2500 3
TYPE5 16 3000 2
COMPOSITE ?? ?? ?? ?? ?? ??

DPMO
DPMO==DEFECTS
DEFECTS xx 10
106
6

 TOP
TOP

 Units x Opp.) Should not be taken in the denominator as in

the normal case
Is it fair to compare processes and products that have different levels of complexity?

DPO • DPO - Defects Per Opportunity

DPO 
 defects
 opportunities
DPMO • DPMO - Defects Per Million Opportunities

 defects
DPMO  *1 000 000
 opportunit ies

Opportunity  Measurable
 The number of opportunities for a defect to occur, is
related to the complexity involved.
Definitions

Unit (U)
The number of parts, sub-assemblies, assemblies, or systems inspected or
tested.
• Squares: 4 units

Opportunity (OP)
A characteristic you inspect or test.
• Circles: 5 opportunities per unit

Defect (D)
Anything that results in customer dissatisfaction. Anything that results in a
non-conformance.
• Black circles: 9 defects
Formulas
Defects per Unit
DPU = D/U
9/4 = 2.25

Total Opportunities
TOP = U*OP
4*5 = 20

Defects per Opportunity (Probability of a Defect)

DPO = D/TOP
9/20 = .45

Defects per Million Opportunities

DPMO = DPO*1,000,000
.45*1,000,000 = 450,000
Parameters to describe the center of the distribution
Average of all values or measurements
Arithmetic
Takes the information of all measurements
Mean Average
Highly influenced by outliers

Middle Value of all measures

Median Doesn’t take the information of all measurements
Is “robust” against outliers
 Calculations
Arithmetic x
 x i
  x i

Mean Average n N
For a Sample For the whole Population

Median Middle value, so that half of the data are above and half of the
data are below the median.

 = Average of entire population or “true” mean

x = (x bar) Average of sample or “best estimate” for mean
N = Number of observations in entire population
n = Number of observations in the sample
xi = Value of measurement x at position i
Parameters to describe the spread (variability)

Difference between highest and lowest value of the distribution

Range
Influenced by Outliers

Variance (2) Average squared difference of data point from the average

Standard Square root of the variance

Deviation Commonly used parameter for variability
 How to calculate

Range X max  X min

Sample Population

Variance ( ) 2
S 
2 1
n 1

n
x x
i 1 i
  2
2 
1
N

i 1 i
n
x    2

  x  x 
i 1 i 
n 2 n 2
Standard x  
Deviation S i 1 i

n 1 N
2 = Variance of entire population, or “true” variance
S2 = Variance of sample, or “best estimate” for 2
 = Standard deviation of entire population, or “true” standard deviation.
S = Standard deviation of sample, or “best estimate” for 
Exercise
Calculate Range, Variance and Standard deviation. Draw a normal
probability plot of the result.

Formulas Data
2
Value (xi-x) (xi-x)
R = X max  X min 5
6
5

 
7
1 n 2
s2   xi  x
6

n 1 i 1 9
7
8
6
8
n

i 1 xi  x
2
 Sum
s n-1
n 1 Variance
Std. dev.
 Observation value

X1 0,4
6  X2 0,3
X3 0,4
4 X4 0,6

2
 X5
X6
0,5
0,4
X7 0,2
X8 0,3
X9 0,5
0
0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 X10 0,4

x-m)2 SD
 sample = n-1
population = n
n-1
Uses of the Standard Deviation
The standard deviation enables us to determine, with a great deal
of accuracy, where the values of a frequency distribution are located in
relation to the mean. We can do this according to a theorem devised by the
Russian mathematician P. L. Chebyshev (1821–1894).

Chebyshev’s theorem says that no matter what the shape of the

distribution, at least 75 percent of the values will fall within ±2 standard
deviations from the mean of the distribution, and at least 89 percent of the
values will lie within ±3 standard deviations from the mean.
 The Normal Curve
Context
• The normal distribution provides the basis for many statistical tools and
techniques.
Definition
• A probability distribution where the most frequently occurring value is in the
middle and other probabilities tail off symmetrically in both directions. This
shape is sometimes called a bell-shaped curve.
Characteristics
• Curve theoretically does not reach zero; thus the sum of all finite areas total
less than 100%
• Curve is symmetric on either side of the most frequently occurring value
• The peak of the curve represents the center, or average, of the process
• For all practical purposes, the area under the curve represents virtually
100% of the product the process is capable of producing
The Normal Curve
-PDF (Probability Density Function)

Average
Units

15

10

0
2 3 4 5 6 7 8 9 10 11 12 Value
Every Normal Curve can be defined by two numbers:
•Mean: a measure of the center
•Standard deviation: a measure of spread


The normal distribution 

-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6

68.27%
95.45%
99.73%
99.9937%
99.999943%
99.9999998
%
The Z-table

Area under the normal curve

is equal to the probability (p,
also named dpo) of getting an
observation beyond Z (see
the Z-table)

Z
Normalizing standard deviations
Normalizing standard deviations

The expected probability of having a specific value

Observed value - Mean Value

= Z-value
Standard deviation
( the Z-table gives the
probability occurrence)
|x-M|
std =Z
Z-VALUES AND PROBABILITIES
 Z – Table Area

Z 0 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09

0.0 5.00E-01 4.96E-01 4.92E-01 4.88E-01 4.84E-01 4.80E-01 4.76E-01 4.72E-01 4.68E-01 4.64E-01
0.1 4.60E-01 4.56E-01 4.52E-01 4.48E-01 4.44E-01 4.40E-01 4.36E-01 4.33E-01 4.29E-01 4.25E-01
0.2 4.21E-01 4.17E-01 4.13E-01 4.09E-01 4.05E-01 4.01E-01 3.97E-01 3.94E-01 3.90E-01 3.86E-01
0.3 3.82E-01 3.78E-01 3.75E-01 3.71E-01 3.67E-01 3.63E-01 3.59E-01 3.56E-01 3.52E-01 3.48E-01
0.4 3.45E-01 3.41E-01 3.37E-01 3.34E-01 3.30E-01 3.26E-01 3.23E-01 3.19E-01 3.16E-01 3.12E-01
0.5 3.09E-01 3.05E-01 3.02E-01 2.98E-01 2.95E-01 2.91E-01 2.88E-01 2.84E-01 2.81E-01 2.78E-01
0.6 2.74E-01 2.71E-01 2.68E-01 2.64E-01 2.61E-01 2.58E-01 2.55E-01 2.51E-01 2.48E-01 2.45E-01
0.7 2.42E-01 2.39E-01 2.36E-01 2.33E-01 2.30E-01 2.27E-01 2.24E-01 2.21E-01 2.18E-01 2.15E-01
0.8 2.12E-01 2.09E-01 2.06E-01 2.03E-01 2.01E-01 1.98E-01 1.95E-01 1.92E-01 1.89E-01 1.87E-01
0.9 1.84E-01 1.81E-01 1.79E-01 1.76E-01 1.74E-01 1.71E-01 1.69E-01 1.66E-01 1.64E-01 1.61E-01
1.0 1.59E-01 1.56E-01 1.5 39E01 1.52E-01 1.49E-01 1.47E-01 1.45E-01 1.42E-01 1.40E-01 1.38E-01
1.1 1.36E-01 1.34E-01 1.31E-01 1.29E-01 1.27E-01 1.25E-01 1.23E-01 1.21E-01 1.19E-01 1.17E-01
1.2 1.15E-01 1.13E-01 1.11E-01 1.09E-01 1.08E-01 1.06E-01 1.04E-01 1.02E-01 1.00E-01 9.85E-02
1.3 9.68E-02 9.51E-02 9.34E-02 9.18E-02 9.01E-02 8.85E-02 8.69E-02 8.53E-02 8.38E-02 8.23E-02
1.4 8.08E-02 7.93E-02 7.78E-02 7.64E-02 7.49E-02 7.35E-02 7.21E-02 7.08E-02 6.94E-02 6.81E-02
1.5 6.68E-02 6.55E-02 6.43E-02 6.30E-02 6.18E-02 6.06E-02 5.94E-02 5.82E-02 5.71E-02 5.59E-02
1.6 5.48E-02 5.37E-02 5.26E-02 5.16E-02 5.05E-02 4.95E-02 4.85E-02 4.75E-02 4.65E-02 4.55E-02
1.7 4.46E-02 4.36E-02 4.27E-02 4.18E-02 4.09E-02 4.01E-02 3.92E-02 3.84E-02 3.75E-02 3.67E-02
1.8 3.59E-02 3.52E-02 3.44E-02 3.36E-02 3.29E-02 3.22E-02 3.14E-02 3.07E-02 3.01E-02 2.94E-02
1.9 2.87E-02 2.81E-02 2.74E-02 2.68E-02 2.62E-02 2.56E-02 2.50E-02 2.44E-02 2.39E-02 2.33E-02
2.0 2.28E-02 2.22E-02 2.17E-02 2.12E-02 2.07E-02 2.02E-02 1.97E-02 1.92E-02 1.88E-02 1.83E-02
2.1 1.79E-02 1.74E-02 1.70E-02 1.66E-02 1.62E-02 1.58E-02 1.54E-02 1.50E-02 1.46E-02 1.43E-02
2.2 1.39E-02 1.36E-02 1.32E-02 1.29E-02 1.26E-02 1.22E-02 1.19E-02 1.16E-02 1.13E-02 1.10E-02
2.3 1.07E-02 1.04E-02 1.02E-02 9.90E-03 9.64E-03 9.39E-03 9.14E-03 8.89E-03 8.66E-03 8.42E-03
2.4 8.20E-03 7.98E-03 7.76E-03 7.55E-03 7.34E-03 7.14E-03 6.95E-03 6.76E-03 6.57E-03 6.39E-03
2.5 6.21E-03 6.04E-03 5.87E-03 5.70E-03 5.54E-03 5.39E-03 5.23E-03 5.09E-03 4.94E-03 4.80E-03
2.6 4.66E-03 4.53E-03 4.40E-03 4.27E-03 4.15E-03 4.02E-03 3.91E-03 3.79E-03 3.68E-03 3.57E-03
2.7 3.47E-03 3.36E-03 3.26E-03 3.17E-03 3.07E-03 2.98E-03 2.89E-03 2.80E-03 2.72E-03 2.64E-03
2.8 2.56E-03 2.48E-03 2.40E-03 2.33E-03 2.26E-03 2.19E-03 2.12E-03 2.05E-03 1.99E-03 1.93E-03
2.9 1.87E-03 1.81E-03 1.75E-03 1.70E-03 1.64E-03 1.59E-03 1.54E-03 1.49E-03 1.44E-03 1.40E-03
 Z – Table Area

Z 0 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09

3.0 1.35E-03 1.31E-03 1.26E-03 1.22E-03 1.18E-03 1.14E-03 1.11E-03 1.07E-03 1.04E-03 1.00E-03
3.1 9.68E-04 9.35E-04 9.04E-04 8.74E-04 8.45E-04 8.16E-04 7.89E-04 7.62E-04 7.36E-04 7.11E-04
3.2 6.87E-04 6.64E-04 6.41E-04 6.19E-04 5.98E-04 5.77E-04 5.57E-04 5.38E-04 5.19E-04 5.01E-04
3.3 4.84E-04 4.67E-04 4.50E-04 4.34E-04 4.19E-04 4.04E-04 3.90E-04 3.76E-04 3.63E-04 3.50E-04
3.4 3.37E-04 3.25E-04 3.13E-04 3.02E-04 2.91E-04 2.80E-04 2.70E-04 2.60E-04 2.51E-04 2.42E-04
3.5 2.33E-04 2.24E-04 2.16E-04 2.08E-04 2.00E-04 1.93E-04 1.86E-04 1.79E-04 1.72E-04 1.66E-04
3.6 1.59E-04 1.53E-04 1.47E-04 1.42E-04 1.36E-04 1.31E-04 1.26E-04 1.21E-04 1.17E-04 1.12E-04
3.7 1.08E-04 1.04E-04 9.97E-05 9.59E-05 9.21E-05 8.86E-05 8.51E-05 8.18E-05 7.85E-05 7.55E-05
3.8 7.25E-05 6.96E-05 6.69E-05 6.42E-05 6.17E-05 5.92E-05 5.68E-05 5.46E-05 5.24E-05 5.03E-05
3.9 4.82E-05 4.63E-05 4.44E-05 4.26E-05 4.09E-05 3.92E-05 3.76E-05 3.61E-05 3.46E-05 3.32E-05
4.0 3.18E-05 3.05E-05 2.92E-05 2.80E-05 2.68E-05 2.57E-05 2.47E-05 2.36E-05 2.26E-05 2.17E-05
4.1 2.08E-05 1.99E-05 1.91E-05 1.82E-05 1.75E-05 1.67E-05 1.60E-05 1.53E-05 1.47E-05 1.40E-05
4.2 1.34E-05 1.29E-05 1.23E-05 1.18E-05 1.13E-05 1.08E-05 1.03E-05 9.86E-06 9.43E-06 9.01E-06
4.3 8.62E-06 8.24E-06 7.88E-06 7.53E-06 7.20E-06 6.88E-06 6.57E-06 6.28E-06 6.00E-06 5.73E-06
4.4 5.48E-06 5.23E-06 5.00E-06 4.77E-06 4.56E-06 4.35E-06 4.16E-06 3.97E-06 3.79E-06 3.62E-06
4.5 3.45E-06 3.29E-06 3.14E-06 3.00E-06 2.86E-06 2.73E-06 2.60E-06 2.48E-06 2.37E-06 2.26E-06
4.6 2.15E-06 2.05E-06 1.96E-06 1.87E-06 1.78E-06 1.70E-06 1.62E-06 1.54E-06 1.47E-06 1.40E-06
4.7 1.33E-06 1.27E-06 1.21E-06 1.15E-06 1.10E-06 1.05E-06 9.96E-07 9.48E-07 9.03E-07 8.59E-07
4.8 8.18E-07 7.79E-07 7.41E-07 7.05E-07 6.71E-07 6.39E-07 6.08E-07 5.78E-07 5.50E-07 5.23E-07
4.9 4.98E-07 4.73E-07 4.50E-07 4.28E-07 4.07E-07 3.87E-07 3.68E-07 3.50E-07 3.32E-07 3.16E-07
5.0 3.00E-07 2.85E-07 2.71E-07 2.58E-07 2.45E-07 2.32E-07 2.21E-07 2.10E-07 1.99E-07 1.89E-07
5.1 1.80E-07 1.71E-07 1.62E-07 1.54E-07 1.46E-07 1.39E-07 1.31E-07 1.25E-07 1.18E-07 1.12E-07
5.2 1.07E-07 1.01E-07 9.59E-08 9.10E-08 8.63E-08 8.18E-08 7.76E-08 7.36E-08 6.98E-08 6.62E-08
5.3 6.27E-08 5.95E-08 5.64E-08 5.34E-08 5.06E-08 4.80E-08 4.55E-08 4.31E-08 4.08E-08 3.87E-08
5.4 3.66E-08 3.47E-08 3.29E-08 3.11E-08 2.95E-08 2.79E-08 2.64E-08 2.50E-08 2.37E-08 2.24E-08
5.5 2.12E-08 2.01E-08 1.90E-08 1.80E-08 1.70E-08 1.61E-08 1.53E-08 1.44E-08 1.37E-08 1.29E-08
5.6 1.22E-08 1.16E-08 1.09E-08 1.03E-08 9.78E-09 9.24E-09 8.74E-09 8.26E-09 7.81E-09 7.39E-09
5.7 6.98E-09 6.60E-09 6.24E-09 5.89E-09 5.57E-09 5.26E-09 4.97E-09 4.70E-09 4.44E-09 4.19E-09
5.8 3.96E-09 3.74E-09 3.53E-09 3.34E-09 3.15E-09 2.97E-09 2.81E-09 2.65E-09 2.50E-09 2.36E-09
5.9 2.23E-09 2.11E-09 1.99E-09 1.88E-09 1.77E-09 1.67E-09 1.58E-09 1.49E-09 1.40E-09 1.32E-09
6.0 1.25E-09 1.18E-09 1.11E-09 1.05E-09 9.88E-10 9.31E-10 8.78E-10 8.28E-10 7.81E-10 7.36E-10
 Normal Distribution (Lower Tail Areas)
Z 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09

Area
Area
0.0
0.1
0.5000
0.5398
0.5040
0.5438
0.5080
0.5478
0.5120
0.5517
0.5160
0.5557
0.5199
0.5596
0.5239
0.5636
0.5279
0.5675
0.5319
0.5714
0.5359
0.5753

Calculated
Calculated
0.2
0.3
0.5793
0.6179
0.5832
0.6217
0.5871
0.6255
0.5910
0.6293
0.5948
0.6331
0.5987
0.6368
0.6026
0.6406
0.6064
0.6443
0.6103
0.6480
0.6141
0.6517
0.4 0.6554 0.6591 0.6628 0.6664 0.6700 0.6736 0.6772 0.6808 0.6844 0.6879
0.5 0.6915 0.6950 0.6985 0.7019 0.7054 0.7088 0.7123 0.7157 0.7190 0.7224
0.6 0.7257 0.7291 0.7324 0.7357 0.7389 0.7422 0.7454 0.7486 0.7517 0.7549
0.7 0.7580 0.7611 0.7642 0.7673 0.7704 0.7734 0.7764 0.7794 0.7823 0.7852
0.8 0.7881 0.7910 0.7939 0.7967 0.7995 0.8023 0.8051 0.8078 0.8106 0.8133
0.9 0.8159 0.8186 0.8212 0.8238 0.8264 0.8289 0.8315 0.8340 0.8365 0.8389
1.0 0.8413 0.8438 0.8461 0.8485 0.8508 0.8531 0.8554 0.8577 0.8599 0.8621
1.1 0.8643 0.8665 0.8686 0.8708 0.8729 0.8749 0.8770 0.8790 0.8810 0.8830
1.2 0.8849 0.8869 0.8888 0.8907 0.8925 0.8944 0.8962 0.8980 0.8997 0.9015
1.3 0.9032 0.9049 0.9066 0.9082 0.9099 0.9115 0.9131 0.9147 0.9162 0.9177
1.4 0.9192 0.9207 0.9222 0.9236 0.9251 0.9265 0.9279 0.9292 0.9306 0.9319

Z 1.5 0.9332 0.9345 0.9357 0.9370 0.9382 0.9394 0.9406 0.9418 0.9429 0.9441
0
1.6 0.9452 0.9463 0.9474 0.9484 0.9495 0.9505 0.9515 0.9525 0.9535 0.9545
1.7 0.9554 0.9564 0.9573 0.9582 0.9591 0.9599 0.9608 0.9616 0.9625 0.9633
I Ihave
havethe
the 1.8 0.9641 0.9649 0.9656 0.9664 0.9671 0.9678 0.9686 0.9693 0.9699 0.9706
1.9 0.9713 0.9719 0.9726 0.9732 0.9738 0.9744 0.9750 0.9756 0.9761 0.9767
ZZvalue = +2.44,
value = +2.44, 2.0 0.9772 0.9778 0.9783 0.9788 0.9793 0.9798 0.9803 0.9808 0.9812 0.9817
and
andneed
need“area”
“area”
2.1 0.9821 0.9826 0.9830 0.9834 0.9838 0.9842 0.9846 0.9850 0.9854 0.9857
2.2 0.9861 0.9864 0.9868 0.9871 0.9875 0.9878 0.9881 0.9884 0.9887 0.9890
(upper
(upperTail
TailArea)
Area) 2.3 0.9893 0.9896 0.9898 0.9901 0.9904 0.9906 0.9909 0.9911 0.9913 0.9916
2.4 0.9918 0.9920 0.9922 0.9925 0.9927 0.9929 0.9931 0.9932 0.9934 0.9936
2.5 0.9938 0.9940 0.9941 0.9943 0.9945 0.9946 0.9948 0.9949 0.9951 0.9952
2.6 0.9953 0.9955 0.9956 0.9957 0.9959 0.9960 0.9961 0.9962 0.9963 0.9964
2.7 0.9965 0.9966 0.9967 0.9968 0.9969 0.9970 0.9971 0.9972 0.9973 0.9974
2.8 0.9974 0.9975 0.9976 0.9977 0.9977 0.9978 0.9979 0.9979 0.9980 0.9981
2.9 0.9981 0.9982 0.9982 0.9983 0.9984 0.9984 0.9985 0.9985 0.9986 0.9986
3.0 0.9987 0.9987 0.9987 0.9988 0.9988 0.9989 0.9989 0.9989 0.9990 0.9990
3.1 0.9990 0.9991 0.9991 0.9991 0.9992 0.9992 0.9992 0.9992 0.9993 0.9993
3.2 0.9993 0.9993 0.9994 0.9994 0.9994 0.9994 0.9994 0.9995 0.9995 0.9995
3.3 0.9995 0.9995 0.9995 0.9996 0.9996 0.9996 0.9996 0.9996 0.9996 0.9997
3.4 0.9997 0.9997 0.9997 0.9997 0.9997 0.9997 0.9997 0.9997 0.9997 0.9998
3.5 0.9998 0.9998 0.9998 0.9998 0.9998 0.9998 0.9998 0.9998 0.9998 0.9998
CAPABILITY RATIOS
Cp, Cpk, Pp, Ppk
 IMPORTANT SPC RATIOS USED

LSL x USL

-3 +3

Maximum allowable range of characteristic

Cp 
Normal variation of process
Tolerance USL - LSL
 
6s 6s
This compares the requirement of the process output vis-a-vis the
inherent variability of the process. Higher value than 1 implies that the
process has got the capability to give the product within the set limits.
 PROCESS POTENTIAL INDEX (Cp)

The numerator is
controlled by Design
Engineering
Maximum Allowable Range of Characteristic
Cp =
Normal Variation of Process

The denominator is controlled by

Process Engineering
 USL - X
Cpu 
3s
This gives us the positioning of the mean vis-a-vis the
USL and the relationship between the two.
X  LSL
Cpl 
3s
This gives us the positioning of the mean vis-a-vis the
LSL and the relationship between the two.
Cpk - Process Performance Index. This is important

Cpk = Minimum of (Cpu and Cpl) ; for bilateral tolerances

C pu ;for unilateral tolerance on upper side i.e..

Cpl ;for unilateral tolerance on lower side i.e..
These ratios help you in:

 Predicting whether rejections will take place on

the higher side or on the lower side.

 Taking centering decisions.

 Deciding whether to consider broadening of

tolerances

 Taking Decisions on whether to go in for new

m/cs.
 Deciding on the level of inspection required.
Differences between the metrics
• dpmo a more sensitive indicator than percentage.

Sigma Yield Downtime

Level Cp % dpmo per year
1  0.33 30.2 697,700 255 days
2  0.67 69.12 308,800 112 days
3  1.0 93.32 66,810 24 days
4  1.33 99.379 6,210 54 hours
5  1.67 99.9767 233 121 minutes
6  2.0 99.99966 3.4 107 seconds
Yield Lower Upper
Tolerance Tolerance
Limit Limit

Yield

Defects
Yield + Defects = 100%

Rev C Peter Häyhänen 9805

 Rolled Throughput Yield (YRT)

Receive parts from Supplier

95.5% Yield (YTP)

Following Receiving
Inspection and Line Fall-out...
45,000 DPMO wasted

97% Yield (YTP)

From Machining Operations

94.4% Yield (YTP)

28,650 DPMO wasted At Test Stands on
first attempt

YRT = .955*.97*.944 = 87.5%

51,876 DPMO wasted

Right
First
125,526 DPMO
Time
wasted opportunities
 Rolled Thru Yield
Most processes are complex interrelationships of many sub-processes.
The overall performance is usually of interest to us.
Rolled yield is a realistic
assessment of the cumulative
FTY
effect of sub-processes
First
FirstProcess
Process First Process
99% Rework

FTY
Second
Second Second Process
Process
Process Rework
89%

FTY
Rolled yield for these three Third
ThirdProcess
Process Third Process
95% Rework
processes is
0.99 x 0.89 x 0.95 = .837,
almost 84% Terminator
Terminator
 YIELD
(process yield)no of operations

Yield \No of op. 3 10 100 1000 10000

0,8 0,512000 0,107374 0,000000 0,000000 0,000000
0,95 0,857375 0,214639 0,005921 0,000000 0,000000
0,9999 0,999700 0,999000 0,990049 0,904833 0,367861
0,999997 0,999991 0,999970 0,999700 0,997004 0,970445
 Common Cause Special Cause

The inherent process variation Due to the controlling X’s

or noise factors

In-Control Out of Control

Stable Unstable
Predictable Unpredictable
Random Variation Non-Random Variation
Inherent Variation Assignable Cause
 Continuous data: Individual Exercise
For each of the items, identify whether it is better description of common cause

variation (CC) or special cause variation (SC)

_______ These causes of variation are part of the process.

_______ These causes of variation are not usually present.

_______ Each of these causes contributes a small part to the total variation.

_______ If these causes are present, the process is unstable, or unpredictable.

_______ If all the variation is due to these causes, the process is stable, or predictable.

_______ This type of variation results from something specific that has a pronounced effect on

the process

_______ We can´t predict when this type of cause will occur or how it will affect the process

_______ By looking at a process over time, we know how much variation to expect from these

causes.
 Nomenclature
dpmo - defects per million opportunities
Yield - % of the number of approved units divided by the total number of units

p(d) - probability for defects (1-Yield)

DPU - Defects per units

DPO - Defects per opportunity

Opp - Opportunity, measurable opportunity for defect