This document discusses statistical quality control (SQC) and its use in manufacturing and services. It describes how SQC uses statistical sampling and control charts to monitor processes and identify issues. Historically, quality control began with judgment inspections but SQC provided improvements by reducing inspection needs and providing feedback to prevent nonconformities. The document also provides examples of how Toyota and Ritz Carlton hotels successfully used SQC to improve quality.

1. STATISTICAL QUALITY CONTROL
Anubhav Grover (12HM08)

2. OPERATION PROCESS
 The goal of every operation or production system is
to generate a useful product.
 The product may be a service, information, or
physical object.
 Each production cycle begins with inputs that are
transformed by a process into a more desired state
or into the product.

3. NEED OF QUALITY CONTROL
 In each process, excessive variations and errors
can cause nonconformities, which leads to three
undesirable consequences:
 (a) scrapped or wasted resources;
 (b) degraded process throughput;
 (c) “contamination” from undetected
nonconformities,
 reducing the value of the product to the customer.

4. GOAL OF QUALITY CONTROL
 The goal of quality control in every production
system is to
 (a) eliminate nonconformities and their
consequences,
 (b) eliminate rework and wasted resources, and
 (c) achieve these goals at the lowest possible cost

5. QUOTES BY PHILIP CROSBY
 Four interesting quotes from
QC expert Philip Crosby.
 1. “The cost of quality is the
expense of doing things
wrong.”
 2. “There is absolutely no
reason for having errors or
defects in any product or
service.”
 3. “If quality isn‟t ingrained in
the organization, it will never
happen.”
 4. “It is much less expensive
to prevent errors than to re-
work, scrap, or service them.”

6. EVOLUTION OF QUALITY CONTROL
 Most quality-control methods were initially
developed to aid manufacturing.
 High- volume production typically requires many
repetitions involving a controlled sequence of
operations.
 Where operations are frequently repeated, it is
easier to recognize processing errors and identify
appropriate control measures

8. JUDGMENT INSPECTIONS
 Historically, the first quality-control methods were
based on judgment inspections.
 Judgment inspections are made after a process has
transformed inputs into a product.
 Based on inspection, the product is accepted,
rejected, or reworked.

9. JUDGMENT INSPECTION

10. SQC INSPECTIONS
 The next major breakthrough in quality control was
made by a team led by Shewhart at Bell
Laboratories.
 His team demonstrated that variation on the
production floor could be described statistically and
that statistical data could identify when a process
was drifting out of control.
 Statistical data were useful in guiding adjustment of
the process to reduce the probability that
nonconforming product would be produced.

11. SQC INSPECTIONS

12. SQC OVER JUDGMENT INSPECTION
 The SQC inspection process had many advantages
relative to judgment inspections.
 SQC relies on sampling inspection, which
substantially reduces the amount of inspection
activity.
 Unlike judgment inspection, SQC provides a
feedback for the production process that helps to
reduce the likelihood of nonconformities.
 The improvement in quality achieved through SQC
reduced rework, scrap, and wasted resources.

13. SQC
 Statistical Quality Control began in the 1930`s with
the industrial use of control charts.
 By implementing SQC, the United States (and
Britain) were able to produce supplies at lower cost
and in large quantity.
 This was the origins of Statistical Quality
Management and Japan`s quality improvement
process journey.

14.  A control chart contains
 A center line
 An upper control limit
 A lower control limit
 A point that plots within the
control limits indicates the
process is in control
 A point that plots outside the
control limits is evidence
that the process is out of
control
 There is a close connection
between control charts and
hypothesis testing
Control Chart

15. REASONS FOR POPULARITY
OF CONTROL CHARTS
1. Control charts are a proven technique for
improving productivity.
2. Control charts are effective in defect
prevention.
3. Control charts prevent unnecessary process
adjustment.
4. Control charts provide diagnostic information.
5. Control charts provide information about
process capability.

16. HOW IS SQC USED IN MANUFACTURING
 It is based on statistical techniques of sampling. That is
by using small samples companies determined the
quality level[defective rates] of the whole production run.
 In SQC, a random sample of finished products is
measures against predetermined standards.
 Hence, the deffective rate of a production run of
100,000 units might be decided by a sample of few
hundred units.
 In SQC, the margin on error in testing the sample can
be established at the 90.95, or 99 percent level.

17. HOW IS SQC USED IN MANUFACTURING
 Based on the results of the sample, a technician
testing a batch would conclude that the defective
rate was too high and it fell within the boundary of
tolerance at the 95 significance level.
 Based on the sample test, the quality control
technician would either accept the whole batch or
reject it.
 If the technician were to reject the sample a check
of the whole production batch would have to be
done to remove the defective units from the batch.

18. TOYATA „S ADVANTAGE OF USING SQC
 Based on the corporate
philosophy of 'customer
first' and 'quality first'
since its founding,
 Toyota Motor Co., Ltd.
won the Deming
Application Prize in 1965
and the Japan Quality
Control Award in 1970,
 following the introduction
of statistical quality
control (SQC) in 1949.

19. STATISTICAL QUALITY CONTROL IN
SERVICES
 Statistical quality control (SQC) tools have been
widely used in manufacturing organizations for
quite some time.
 Manufacturers such as Motorola, General Electric,
Toyota, and others have shown leadership in SQC
for many years.
 Unfortunately, service organizations have lagged
behind manufacturing firms in their use of SQC.
 The primary reason is that statistical quality control
requires measurement, and it is difficult to measure
the quality of a service.
 Services provide an intangible product and that
perceptions of quality are often highly subjective.

20. SQC IN SERVICES
 Another issue that complicates quality control in
service organizations is that the service is often
consumed during the production process.
 The customer is often present during service
delivery, and there is little time to improve quality.
 The way to manage this issue is to provide a high
level of workforce training and to empower workers
to make decisions that will satisfy customers.

21. SQC AT RITZ CARLTON HOTEL
 One service organization that has demonstrated
quality leadership is The Ritz-Carlton Hotel
Company
 This luxury hotel chain caters to travellers who seek
high levels of customer service. The goal of the
chain is to be recognized for outstanding service
quality.
 To this end, computer records are kept of regular
clients‟ preferences. To keep customers happy,
employees are empowered to spend up to $2,000
on the spot to correct any customer complaint.

22. RITZ CARLTON ADVANTAGE OF USING SQC
 The Ritz-Carlton has received a number of
quality awards including winning the Malcolm
Baldrige National Quality Award twice.

23. THANK YOU