OPERATION & QUALITY MANAGEMENT 2

MBALN-670 Operations Management

Title of the topic Quality Control / Statistical quality control / ISO 9000 and Quality Audit

Topic’s learning objectives

1. Identify and critique the strategic frameworks of operations and quality

management within a global business environment. 2. Comprehensive knowledge of the main concept and methods related to

designing and managing operations and supply chains. 3. Systematic application of a range of fundamental operational improvement

concepts. 4. Critically evaluate the role of operations within different business models /

functions.

Introduction This week we will be introducing Quality Management.

 What does it mean?

 Identify the costs of quality

 Describe the evolution of TQM (total quality management)

 Features of TQM and problem solving

 Describe quality awards and quality certifications

 The relationship between quality and operations within an organisation and its

interaction with other functions.

 Further to the basics you will study Statistical Quality Control and how it is

used within organisations using concepts such as Six Sigma.

Below you will find the study material and reading guidance. Within the WileyPlus

EBook you will also find many practical exercises, audio, video and quizzes to

enhance your learning. I encourage you to undertake as much as you need to check

your understanding once you have followed my Topic overview.

Case Study Article

The article can be found by clicking on the link on the VLE, or below:

http://www.mercadona.es/corp/ing-html/modelo.html

Mercadona implemented its Total Quality approach in 1993. This decision

prompted the company to rearrange its priorities as follows: Customers, otherwise

known internally as the "Boss", Workers, Suppliers, the Company and Capital.

It's a 100% Spanish-owned distribution company within the supermarket segment. Its

CEO is Juan Roig. It has a presence in 46 provinces in 15 Autonomous

Communities with 1,391 supermarkets (12/10/2012) that, with an average retail area

of between 1,300 and 1,500 square meters, represent a 13.5% share of Spain's total

food retail space while contributing to the dynamics of the commercial environments

in which they are located.

Over 70,000 people, all of them with permanent contracts, are making their careers

at the company, all with the same goal: to satisfy the daily food, cleaning, hygiene

and pet care needs of the more than 4.6 million households that do their grocery

shopping at Mercadona every day.

The case of Mercadona shows that the decision to orient the company’s entire

management toward satisfying customer needs was correct. But the case also

shows that the company cannot achieve an optimal management of customer needs

without also satisfying the needs of the firm’s other stakeholders.

Discussion Question 2 – Mercadona Case Please make your responses to the following discussion questions:

1. How did Mercando first implement the TQM framework and at what point in

their lifecycle? What this appropriate timing?

2. What area of the TQM model did they focus on and what is the strength?

3. Discuss any possible alterations they could make in the future to their TQM

model?

Learning Material

Defining Quality

The definition of quality depends on the point of view of the people defining it. Most

consumers have a difficult time defining quality, but they know it when they see it.

For example, although you probably have an opinion as to which manufacturer of

athletic shoes provides the highest quality; it would probably be difficult for you to

define your quality standard in precise terms. Also, your friends may have different

opinions regarding which athletic shoes are of highest quality. The difficulty in

defining quality exists regardless of product, and this is true for both manufacturing

and service organizations. Think about how difficult it may be to define quality for

products such as airline services, child day-care facilities, college classes, or even

OM textbooks. Further complicating the issue is that the meaning of quality has

changed over time.

Today, there is no single, universal definition of quality. Some people view quality as

“performance to standards.” Others view it as “meeting the customer's needs” or

“satisfying the customer.” Let's look at some of the more common definitions of

quality.

• Conformance to specifications measures how well the product or service meets

the targets and tolerances determined by its designers. For example, the

dimensions of a machine part may be specified by its design engineers as 3 ±

0.05 inches. This would mean that the target dimension is 3 inches, but the

dimensions can vary between 2.95 and 3.05 inches. Similarly, the wait for hotel

room service may be specified as 20 minutes, but there may be an acceptable

delay of an additional 10 minutes. Also, consider the amount of light delivered

by a 60-watt light bulb. If the bulb delivers 50 watts, it does not conform to

specifications. As these examples illustrate, conformance to specification is

directly measurable, though it may not be directly related to the consumer's idea

of quality.

• Fitness for use focuses on how well the product performs its intended function

or use. For example, a Mercedes-Benz and a Jeep Cherokee both meet a

fitness for use definition if one considers transportation as the intended function.

However, if the definition becomes more specific and assumes that the intended

use is for transportation on mountain roads and carrying fishing gear, the Jeep

Cherokee has a greater fitness for use. You can also see that fitness for use is a

user-based definition in that it is intended to meet the needs of a specific user

group.

• Value for price paid is a definition of quality that consumers often use for

product or service usefulness. This is the only definition that combines

economics with consumer criteria; it assumes that the definition of quality is

price sensitive. For example, suppose that you wish to sign up for a personal

finance seminar and discover that the same class is being taught at two

different colleges at significantly different tuition rates. If you take the less

expensive seminar, you will feel that you have received greater value for the

price.

• Support services provided are often how the quality of a product or service is

judged. Quality does not apply only to the product or service itself; it also

applies to the people, processes, and organizational environment associated

with it. For example, the quality of a university is judged not only by the quality

of staff and course offerings but also by the efficiency and accuracy of

processing paperwork.

• Psychological criteria is a subjective definition that focuses on the judgmental

evaluation of what constitutes product or service quality. Different factors

contribute to the evaluation, such as the atmosphere of the environment or the

perceived prestige of the product. For example, a hospital patient may receive

average healthcare, but a very friendly staff may leave the impression of high

quality. Similarly, we commonly associate certain products with excellence

because of their reputation; Rolex watches and Mercedes-Benz automobiles

are examples.

Costs of Quality

The reason quality has gained such prominence is that organizations have gained an

understanding of the high cost of poor quality. Quality affects all aspects of the

organization and has dramatic cost implications. The most obvious consequence

occurs when poor quality creates dissatisfied customers and eventually leads to loss

of business. However, quality has many other costs, which can be divided into two

categories. The first category consists of costs necessary for achieving high quality,

which are called quality control costs. These are of two types: prevention costs and

appraisal costs. The second category consists of the cost consequences of poor

quality, which are called quality failure costs. These include external failure costs and

internal failure costs.

Prevention costs. Costs of preparing and implementing a quality plan.

Appraisal costs. Costs of testing, evaluating, and inspecting quality.

Internal failure

costs.

Costs of scrap, rework, and material losses.

External failure

costs.

Costs of failure at customer site, including returns,

repairs, and recalls.

Prevention costs are all costs incurred in the process of preventing poor quality from

occurring. They include quality planning costs, such as the costs of developing and

implementing a quality plan. Also included are the costs of product and process

design, from collecting customer information to designing processes that achieve

conformance to specifications. Employee training in quality measurement is included

as part of this cost, as well as the costs of maintaining records of information and

data related to quality.

Appraisal costs are incurred in the process of uncovering defects. They include the

cost of quality inspections, product testing, and performing audits to make sure that

quality standards are being met. Also included in this category are the costs of

worker time spent measuring quality and the cost of equipment used for quality

appraisal.

Internal failure costs are associated with discovering poor product quality before the

product reaches the customer site. One type of internal failure cost is rework, which

is the cost of correcting the defective item. Sometimes the item is so defective that it

cannot be corrected and must be thrown away. This is called scrap, and its costs

include all the material, labour, and machine cost spent in producing the defective

product. Other types of internal failure costs include the cost of machine downtime

due to failures in the process and the costs of discounting defective items for salvage

value.

External failure costs are associated with quality problems that occur at the customer

site. These costs can be particularly damaging because customer faith and loyalty

can be difficult to regain. They include everything from customer complaints, product

returns, and repairs to warranty claims, recalls, and even litigation costs resulting

from product liability issues. A final component of this cost is lost sales and lost

customers. For example, manufacturers of lunch meats and hot dogs whose

products have been recalled due to bacterial contamination have had to struggle to

regain consumer confidence. Other examples include auto manufacturers whose

products have been recalled due to major malfunctions such as problematic braking

systems and airlines that have experienced a crash with many fatalities. External

failure can sometimes put a company out of business almost overnight.

Companies that consider quality important invest heavily in prevention and appraisal

costs in order to prevent internal and external failure costs. The earlier defects are

found, the less costly they are to correct. For example, detecting and correcting

defects during product design and product production is considerably less expensive

than when the defects are found at the customer site.

Evolution of TQM

Article to Read

Total Quality Management & Business Excellence

The effect of TQM practices on employee satisfaction and loyalty in Government

You will find the link to this article on the VLE or http://www.informaworld.com/smpp/title~content=t713447980

Ways to improve TQM  Plan-Do-Study-Act Cycle (PDSA)

o Also called the Deming Wheel after originator

o Circular, never ending problem solving process

 Seven Tools of Quality Control

o Tools typically taught to problem solving teams

 Quality Function Deployment

o Used to translate customer preferences

 ISO 9000 Standards:

o Certification developed by International Organization for

Standardization

o Set of internationally recognized quality standards

o Companies are periodically audited & certified

o ISO 9000:2000 QMS – Fundamentals and Standards

o ISO 9001:2000 QMS – Requirements

o ISO 9004:2000 QMS - Guidelines for Performance

o More than 40,000 companies have been certified

o ISO 14000: Focuses on a company’s environmental responsibility

You will find detail on each of these points in chapters 5 and 6 of your ebook.

Seven tools of quality management

1. Cause-and-Effect Diagrams

2. Flowcharts

3. Checklists

4. Control Charts

5. Scatter Diagrams

6. Pareto Analysis

7. Histograms

Total Quality Management (TQM) Within OM: How It All Fits Together

Implementing total quality management requires broad and sweeping changes

throughout a company. It also affects all other decisions within operations

management. The decision to implement total quality management concepts

throughout the company is strategic in nature. It sets the direction for the firm and

the level of commitment. For example, some companies may choose to directly

compete on quality, whereas others may just want to be as good as the competition.

It is operations strategy that then dictates how all other areas of operations

management will support this commitment.

The decision to implement TQM affects areas such as product design which needs

to incorporate customer-defined quality. Processes are then redesigned in order to

produce products with higher quality standards. Job design is affected, as workers

need to be trained in quality tools and become responsible for rooting out quality

problems. Also, supply chain management is affected as the commitment to quality

translates into partnering with suppliers. As you can see, virtually every aspect of the

operations function must change to support the commitment to total quality

management.

Total Quality Management (TQM) Across The Organization

Think Theory 3

(Take a pen and write down your answer. As soon as you finish thinking and writing,

check at the end of the topic overview for feedback)

1. What are ISO 9000 standards? Who were they set by and why? Can you describe

other certifications based on the ISO 9000 certification?

As we have seen, total quality management impacts every aspect of the

organization. Every person and every function is responsible for quality and is

affected by poor quality. For example, Motorola implemented its Six Sigma concept

not only in the production process but also in the accounting, finance, and

administrative areas. Similarly, ISO 9000 standards do not apply only to the

production process— they apply equally to all departments of the company. A

company cannot achieve high quality if its accounting is inaccurate or the marketing

department is not working closely with customers. TQM requires the close

cooperation of different functions in order to be successful. In this section we look at

the involvement of these other functions in TQM.

Marketing plays a critical role in the TQM process by providing key inputs that make TQM a success. The goal of TQM is to satisfy customer needs by producing the exact product that customers want. Marketing's role is to understand the changing needs and wants of customers by working closely with them. This requires a solid identification of target markets and an understanding of whom the product is intended for. Sometimes, apparently small differences in product features can result in large differences in customer appeal. Marketing needs to accurately pass customer information along to operations, and operations needs to include marketing in any planned product changes.

Finance is another major participant in the TQM process because of the great cost consequences of poor quality. General definitions of quality need to be translated into specific dollar terms. This serves as a baseline for monitoring the financial impact of quality efforts and can be a great motivator. The four costs of quality discussed earlier. The first two costs, prevention and appraisal, are preventive costs; they are intended to prevent internal and external failure costs. Not investing enough in preventive costs can result in failure costs, which can hurt the company. On the other hand, investing too much in preventive costs may not yield added benefits. Financial analysis of these costs is critical. You can see that finance plays a large role in evaluating and monitoring the financial impact of managing the quality process. This includes costs related to preventing and eliminating defects, training employees, reviewing new products, and all other quality efforts.

Accounting is important in the TQM process because of the need for exact costing. TQM efforts cannot be accurately monitored and their financial contribution assessed if the company does not have accurate costing methods.

Engineering efforts are critical in TQM because of the need to properly translate customer requirements into specific engineering terms. The process we followed in developing quality function deployment (QFD). It was not easy to translate a customer requirement such as “a good-looking backpack” into specific terms such as materials, weight, colour grade, size, and number of zippers. We depend on engineering to use general customer requirements in developing technical specifications, identifying specific parts and materials needed, and identifying equipment that should be used.

Purchasing is another important part of the TQM process. Whereas marketing is busy identifying what the customers want and engineering is busy translating that information into technical specifications, purchasing is responsible for acquiring the materials needed to make the product. Purchasing must locate sources of supply,

ensure that the parts and materials needed are of sufficiently high quality, and negotiate a purchase price that meets the company's budget as identified by finance.

Human resources is critical to the effort to hire employees with the skills necessary to work in a TQM environment. That environment includes a high degree of teamwork, cooperation, dedication, and customer commitment. Human resources is also faced with challenges relating to reward and incentive systems. In TQM, rewards and incentives are different from those found in traditional environments that focus on rewarding individuals rather than teams.

Information systems (IS) is highly important in TQM because of the increased need for information accessible to teams throughout the organization. IS should work closely with a company's TQM development program in order to understand exactly the type of information system best suited for the firm, including the form of the data, the summary statistics available, and the frequency of updating.

What is Statistical Quality Control?

In Chapter 5 we learned that total quality management (TQM) addresses

organizational quality from managerial and philosophical viewpoints. TQM focuses

on customer-driven quality standards, managerial leadership, continuous

improvement, quality built into product and process design, identifying quality

problems at the source, and making quality everyone's responsibility. However,

talking about solving quality problems is not enough. We need specific tools that can

help us make the right quality decisions. These tools come from the field of statistics

and are used to help identify quality problems in the production process as well as in

the product itself. Statistical quality control is the subject of this chapter.

Statistical quality control (SQC) is the term used to describe the set of statistical tools

used by quality professionals. Statistical quality control can be divided into three

broad categories:

1. Descriptive statistics are used to describe quality characteristics and

relationships. Included are statistics such as the mean, the standard deviation, the

range, and a measure of the distribution of data.

2. Statistical process control (SPC) involves inspecting a random sample of the

output from a process and deciding whether the process is producing products with

characteristics that fall within a predetermined range. SPC answers the question of

whether or not the process is functioning properly.

3. Acceptance sampling is the process of randomly inspecting a sample of goods

and deciding whether to accept the entire lot based on the results. Acceptance

sampling determines whether a batch of goods should be accepted or rejected.

The tools in each of these categories provide different types of information for use in

analyzing quality. Descriptive statistics are used to describe certain quality

characteristics, such as the central tendency and variability of observed data.

Although descriptions of certain characteristics are helpful, they are not enough to

help us evaluate whether there is a problem with quality. Acceptance sampling can

help us do this. It helps us decide whether desirable quality has been achieved for a

batch of products and whether to accept or reject the items produced. Although this

information is helpful in making the quality acceptance decision after the product has

been produced, it does not help us identify and catch a quality problem during the

production process. For this we need tools in the statistical process control (SPC)

category.

All three of these statistical quality control categories are helpful in measuring and

evaluating the quality of products or services. However, statistical process control

(SPC) tools are used most frequently because they identify quality problems during

the production process. For this reason, we will devote most of the chapter to this

category of tools. The quality control tools we will be learning about do not only

measure the value of a quality characteristic; they also help us identify a change or

variation in some quality characteristic of the product or process. We will first see

what types of variation we can observe when measuring quality. Then we will be

able to identify the specific tools to use for measuring this variation.

Now read the rest of chapter 6 in your eBook. Focus on the online presentation / lesson that demonstrate nicely Statistical Quality

Control. You can find this under “Solved Demo Problem”

Six Sigma Quality

The term Six Sigma® was coined by the Motorola Corporation in the 1980s to

describe the high level of quality the company was striving to achieve. Sigma (σ)

stands for the number of standard deviations of the process. Recall that ±3 sigma (σ)

means that 2600 ppm are defective. The level of defects associated with Six Sigma

is approximately 3.4 ppm. Figure 6-10 shows a process distribution with quality

levels of ±3 sigma (σ) and ±6 sigma (σ). You can see the difference in the number of

defects produced.

PPM defective for ±3σ versus ±6σ quality (not to scale)

To achieve the goal of Six Sigma, Motorola has instituted a quality focus in every

aspect of its organization. Before a product is designed, marketing ensures that

product characteristics are exactly what customers want. Operations ensures that

exact product characteristics can be achieved through product design, the

manufacturing process, and the materials used. The Six Sigma concept is an integral

part of other functions as well. It is used in the finance and accounting departments

to reduce costing errors and the time required to close the books at the end of the

month. Numerous other companies, such as General Electric, Lockheed Martin,

Allied Signal, American Express, and Texas Instruments, have followed Motorola's

leadership and have also instituted the Six Sigma concept. In fact, the Six Sigma

quality standard has become a benchmark in many industries.

There are two aspects to implementing the Six Sigma concept. The first is the use of

technical tools to identify and eliminate causes of quality problems. In fact, Six Sigma

relies heavily on quantitative and data-driven technical tools. These technical tools

include the statistical quality control tools discussed in this chapter and also the

problem-solving tools discussed in Chapter 5, such as cause-and-effect diagrams,

flow charts, and Pareto analysis. In Six Sigma programs, the use of these technical

tools is integrated throughout the entire organizational system.

The second aspect of Six Sigma implementation is people involvement. In Six

Sigma, all employees have the training to use technical tools and are responsible for

rooting out quality problems. Employees are given martial arts titles that reflect their

skills in the Six Sigma process. Black belts and master black belts are individuals

who have extensive training in the use of technical tools and are responsible for

carrying out the implementation of Six Sigma. They are experienced individuals who

oversee the measuring, analyzing, process controlling, and improving. They achieve

this by acting as coaches, team leaders, and facilitators of the process of continuous

improvement. Green belts are individuals who have sufficient training in technical

tools to serve on teams or on small, individual projects.

The Six Sigma approach is organized around a five-step plan known as DMAIC,

which stands for Define, Measure, Analyze, Improve, and Control:

The first three steps provide a study of the existing process, whereas the last two

steps are involved in process change. All steps extensively utilize quantitative tools,

such as measuring the current performance and analyzing the process for root

causes of problems. You can also see that like the PDSA cycle described in Chapter

5, this is a circular process that is ongoing and never ends. Part of Six Sigma is to

continuously search for quality problems and improve upon them. In organizations,

this effort is led by the black belts.

Successful Six Sigma implementation requires commitment from top company

leaders. These individuals must promote the process, eliminate barriers to

implementation, and ensure that proper resources are available. A key individual is a

champion of Six Sigma. This is a person who comes from the top ranks of the

organization and is responsible for providing direction and overseeing all aspects of

the process.

Video 3 Six Sigma – What is it?

http://www.youtube.com/watch?v=wSZOsimeB5Q&feature=fvwrel

Watch the video from Chapter 6 of the eBook – Video Gaming Quality Testing

Further Reading

Articles on interesting debates.

1. Why six sigma is not TQM.

http://www.sixsigmatraining.org/six_sigma_vs_tqm

Think Theory 4

(Take a pen and write down your answer. As soon as you finish thinking and writing,

check at the end of the topic overview for feedback)

1. Define quality for the following products: a university, an exercise facility, spaghetti

sauce, and toothpaste.

2. Why ISO 9000 should be a company’s guide and not TQM

http://www.manufacturingnews.com/news/editorials/bishop.html

3. Article – Where Six Sigma Fails - Wall street journal

http://online.wsj.com/article/SB1000142405274870329800457445747131393

8130.html#articleTabs%3Darticle

Material Sources

1. Reid R., Operations Management, 4 th

Edition, 2011, Wiley Publishers

2. http://www.qualitymag.com 3. Why is six sigma not TQM

http://www.sixsigmatraining.org/six_sigma_vs_tqm

4. Why ISO 9000 should be a company’s guide and not TQM

http://www.manufacturingnews.com/news/editorials/bishop.html

5. Article – Where Six Sigma Fails - Wall street journal

http://online.wsj.com/article/SB1000142405274870329800457445747131393813

0.html#articleTabs%3Darticle

Think Theory 3 Ideas What are ISO 9000 standards? Who were they set by and why? Can you describe other certifications based on the ISO 9000 certification?

ISO 9000 is a set of standards and a certification program for companies based on a

documentation of the quality processes. The standards were set by the International

Organization for Standardization to set a standard for companies doing business.

ISO 14000 is a set of standards that focuses on environmental concerns. QS 9000

is a set of standards based on ISO 9000 that is geared to the automobile industry.

Think Theory 4 Ideas Define quality for the following products: a university, an exercise facility, spaghetti sauce, and toothpaste. Compare your definitions with those of others in your class.

The quality of a university can be defined as:

 quality of professors – have Ph.D., helpful, knowledgeable, able to clearly explain material, fair

 ability to place students in a good position at a high salary in a timely manner

 facilities are up-to-date in terms of technology (i.e. wireless classrooms)

 value for the price of the education

 ability to prepare students for success in the business world

 variety of course offerings

 efficiency and accuracy of processing paperwork, such as registration for classes

 appearance of the campus

 perceived prestige of the university The quality of an exercise facility can be defined as:

 variety of gym equipment

 variety and availability of fitness classes

 value for the price of membership

 ability to help members get into shape

 accurate billing

 atmosphere meets member’s needs

 waiting times for machines are two minutes or less

The quality of spaghetti sauce can be defined as:

 good taste

 the jar is filled to 28 ounces plus or minus one ounce

 value for price paid

 perceived quality of the product

 ability to quickly answer questions at the address listed on the jar of sauce

 the sauce has chunks of tomatoes

 ease of opening jar

 ease of preparing the sauce to eat

 able to keep leftover sauce in container in refrigerator easily to last longer

 length of time the sauce can still be eaten

The quality of toothpaste can be defined as:

 ability to clean teeth

 good taste

 perceived quality of the product

 ability to keep breath fresh

 ability to prevent plaque

 ability to whiten teeth

 ability to prevent cavities

 tube of toothpaste is filled

 ability to fight gingivitis

 ability to fight tartar

 able to quickly and accurately answer questions in a friendly manner at the toll- free number listed on toothpaste tube

 tube is filled with 4.2 ounces plus or minus 0.5 ounce.

 toothpaste is certified by the American Dental Association (ADA)

Topic’s summary Total quality management (TQM) is different from the old concept of quality because its focus is on serving customers, identifying the causes of quality problems, and building quality into the production process.

There are four categories of quality costs. The first two are prevention and appraisal costs, which are incurred by a company in attempting to improve quality. The last

two costs are internal and external failure costs, which are the costs of quality failures that the company wishes to prevent.

The seven most notable individuals who shaped today's concept of quality are Walter A. Shewhart, W. Edwards Deming, Joseph M. Juran, Armand V. Feigenbaum, Philip B. Crosby, Kaoru Ishikawa, and Genichi Taguchi.

Seven features of TQM combine to create the TQM philosophy: customer focus, continuous improvement, employee empowerment, use of quality tools, product design, process management, and managing supplier quality.

Quality function deployment (QFD) is a tool used to translate customer needs into specific engineering requirements. Seven problem-solving tools are used in managing quality. Often called the seven tools of quality control, they are cause-and- effect diagrams, flowcharts, checklists, scatter diagrams, Pareto analysis, control charts, and histograms.

Reliability is the probability that the product will function as expected. The reliability of a product is computed as the product of the reliabilities of the individual components.

The Malcolm Baldrige Award is given to companies to recognize excellence in quality management. Companies are evaluated in seven areas, including quality leadership and performance results. These criteria have become a standard for many companies that seek to improve quality. ISO 9000 is a certification based on a set of quality standards established by the International Organization for Standardization. Its goal is to ensure that quality is built into production processes. ISO 9000 focuses mainly on quality of conformance.

Statistical quality control (SQC) refers to statistical tools that can be used by quality professionals. Statistical quality control can be divided into three broad categories: descriptive statistics, acceptance sampling, and statistical process control (SPC).

Descriptive statistics are used to describe quality characteristics, such as the mean, range, and variance. Acceptance sampling is the process of randomly inspecting a sample of goods and deciding whether to accept or reject the entire lot. Statistical process control (SPC) involves inspecting a random sample of output from a process and deciding whether the process is producing products with characteristics that fall within preset specifications.

There are two causes of variation in the quality of a product or process: common causes and assignable causes. Common causes of variation are random causes that we cannot identify. Assignable causes of variation are those that can be identified and eliminated.

A control chart is a graph used in statistical process control that shows whether a sample of data falls within the normal range of variation. A control chart has upper and lower control limits that separate common from assignable causes of variation. Control charts for variables monitor characteristics that can be measured and have a continuum of values, such as height, weight, or volume. Control charts for attributes are used to monitor characteristics that have discrete values and can be counted.

Control charts for variables include x-bar charts and R-charts. X-bar charts monitor the mean or average value of a product characteristic. R-charts monitor the range or dispersion of the values of a product characteristic. Control charts for attributes include p-charts and c-charts. P-charts are used to monitor the proportion of defects in a sample. C-charts are used to monitor the actual number of defects in a sample.

Process capability is the ability of the production process to meet or exceed preset specifications. It is measured by the process capability index, Cp, which is computed as the ratio of the specification width to the width of the process variability.

The term Six Sigma indicates a level of quality in which the number of defects is no more than 3.4 parts per million.

The goal of acceptance sampling is to determine criteria for acceptance or rejection based on lot size, sample size, and the desired level of confidence. Operating characteristic (OC) curves are graphs that show the discriminating power of a sampling plan.

It is more difficult to measure quality in services than in manufacturing. The key is to devise quantifiable measurements for important service dimensions.