Statistical Process Control

Operations Management II
Sachin Jayaswal
Indian Institute of Management Ahmedabad
Statistics Review

Let x be a random variable with a (population) standard deviation

If samples of size n are drawn and their means recorded, the
standard deviation of the sample means = ..
Statistics Review

Let x be a random variable with a (population) standard deviation

If samples of size n are drawn and their means recorded, the
standard deviation of the sample means =
Population and Sampling Distributions
Population Distribution
f(x)
Mean =
Std. Dev. = x

x
Distribution
f(x) of Sample Means
Mean = =x =

x
Std. Dev. = x n
x
Central Limit Theorem: The Distribution of the sum of a large number of
independent identically distributed variables will be Normal, regardless of the
underlying distribution.
Who is the Better Target Shooter?

Sam John
Sam can simply adjust his sight John requires lengthy training

Variability is the root cause of all quality problems

Variability in Production of Kick Scooter

Steer Support

The steer support is refined at a CNC machine

The ideal height of the steer support should measure 79.950 mm
If the height < 79.900 mm, the part may rattle excessively
If the height > 80.000 mm, the steer support may not fit
Even though the ideal height of the steer support should measure
79.950 mm, the design specification prescribes 79.950 0.05 mm. Why?
6
Assignable vs Random Variation

Random Variation

Random Variation

Assignable Cause of Variation

Causes of Variation

Assignable Variation:
Sources of variation can be identified (and hence eliminated).
Ex:
Tool wear
Variation in Material
Variation in Temperature
Mistake in programming CNC machine
Random (Common) Variation:
Created by combined influences of several minor unidentified
factors. Even if each factor could be identified and eliminated, the
decrease in process variability would be negligible.
Thus, it is impossible or prohibitively costly to completely eliminate
common variability.
Assignable vs Random Variation

The distinction between random (common) variations and

assignable variations is not a universal truth
To a layman, the movement of NSE index might appear
totally random, while an experienced trader can easily
assign specific causes (e.g., announcement of quarterly
financial results, ratings by agencies)
An observer may discover new assignable causes for
variations that were previously attributed as random
Statistical Process Control (SPC)

The objective of Statistical Process Control is:

To separate out assignable variations from random
variations in a process. This makes possible diagnosis
and correction of quality problems.
To tell when to leave a process alone and thus prevent
unnecessary frequent adjustments that tend to increase
the variability of the process rather than to decrease it.
Control Charts

Control Charts are graphical tools to statistically

distinguish between assignable and random variations.
Primary purpose of control charts is to indicate at a
glance when production processes might have changed
sufficiently to affect product quality.
To do so, it tracks the process outcome (e.g., height of
the steer support in the kick scooter example) over time.
If the indication is that product quality has deteriorated,
or is likely to, then corrective action is taken.
If the indication is that product quality is better than
expected, then it is important to find out why so that it
can be maintained.
Basic Control Chart

Upper Process
control outcomes
limit

Process
mean

Lower
control
limit
1 2 3 4 5 6 7 8 9 10
Time

The central line is the mean of the process outcomes collected

while the process was considered to be in control.
How to set up the upper and lower control limits?
Basic Control Chart

Upper Process
control outcomes
limit

Process
mean

Lower
control
limit
1 2 3 4 5 6 7 8 9 10
Time
A process is said to be in control (i.e., variations are random) if all data points
fall within the control limits. A controlled process signifies that the underlying
probability distribution generating observations is not changing with time.
Conversely, a data point that falls outside of either limit would be taken as an
evidence that the process output is nonrandom (assignable variation), and the
process is not in control. If that happens, the process should be halted to find
and correct the cause of assignable variation
Control Charts

Control charts are based on samples taken from the

process, as opposed to assessing every individual unit, to
prevent reacting to random fluctuations. But sample size
should not be so large that it masks assignable-cause
variation.
Mean (x-bar) Control Chart
Range (R) Control Chart
X-Bar Chart

x-bar chart is used to test if there is a (non random) shift in the

process mean

UCL X X 3 x

n X

LCL X X 3 x

n
1 2 3 4 5 6 7 8 9 10
Sample Number (each of size n)

Why are the Upper and Lower Control Limits so decided?

Sampling Distribution

z 0 0.01 0.02
0.8 0.2881 0.2910 0.2939
0.9 0.3159 0.3186 0.3212
1 0.3413 0.3438 0.3461
1.1 0.3643 0.3665 0.3686

LCL Mean UCL

Since the sample means are normally distributed, we know that there is 99.74% chance
that a sample will fall between the lower and upper limits. In other words, if we draw a
sample of size n and find that its mean falls outside these limits, we are 99.74% sure that
it could not have happened purely by chance but by an assignable cause.
X-Bar Chart: Example

A quality inspector took 5 samples, each with 4 observations, of the

length of time (in minutes) for a glue to dry. The analyst computed
the mean of each sample. It is known from previous experience that
the standard deviation of the process is 0.02 minutes. Is the process
in control?
SAMPLES
1.00 2.00 3.00 4.00 5.00
1 12.11 12.15 12.09 12.12 12.09
2 12.10 12.12 12.09 12.10 12.14
Observations 3 12.11 12.10 12.11 12.08 12.13
4 12.08 12.11 12.15 12.10 12.12
x
X-Bar Chart: Example

A quality inspector took 5 samples, each with 4 observations, of the

length of time (in minutes) for a glue to dry. The analyst computed
the mean of each sample. It is known from previous experience that
the standard deviation of the process is 0.02 minutes. Is the process
in control?
SAMPLES
1.00 2.00 3.00 4.00 5.00
1 12.11 12.15 12.09 12.12 12.09
2 12.10 12.12 12.09 12.10 12.14
Observations 3 12.11 12.10 12.11 12.08 12.13
4 12.08 12.11 12.15 12.10 12.12
x 12.10 12.12 12.11 12.10 12.12

X ..... UCLX ...... LCLX ......

 _
X-Bar Chart: Example

12.1 12.12 12.11 12.10 12.12

X 12.11
5
UCL X 12.11 3 0.02 12.14 LCL X 12.11 3 0.02 12.08
4 4

All the sample means are within the control limits. Hence, the
process mean seems to be in control.
X-Bar Chart: Example

But some of the individual measurements fall outside of the control

limits. Can we still conclude that the process is in control?
SAMPLES
1.00 2.00 3.00 4.00 5.00
1 12.11 12.15 12.09 12.12 12.09
2 12.10 12.12 12.09 12.10 12.14
Observations 3 12.11 12.10 12.11 12.08 12.13
4 12.08 12.11 12.15 12.10 12.12
x 12.10 12.12 12.11 12.10 12.12

Sampling
distribution
Process
Yes! Why? distribution

Mean
LCL UCL
Control Limits for X-Bar Chart when is not known

UCL X X 3 x

LCL X X 3 x

n n
1

N
Can we use sx as an estimator for x
2
i X X
N 1 i 1
where N is the total number of individual observatio ns?

No! Why?
For s to be an accurate estimator for , it is necessary that underlying
mean of the population be in control (not be shifting with time).
But isnt this what the x-bar chart is used to test?
Control Limits for X-Bar Chart when is not known
An alternative method for estimating that remains accurate even
the population mean shifts uses data range (R).
Even if the process mean shifts, the process range will be in control
as long as the process variation is in control.

R d where d 2 depends on the size of the subgroup

2

UCL X X 3 x X 3 R
X A2 R
n d2 n

LCL X X 3 x X 3 R
X A2 R
n d2 n
3 Control Chart Factors
X-Bar Chart: Example Revisited

SAMPLES
1.00 2.00 3.00 4.00 5.00
1 12.11 12.15 12.09 12.12 12.09
2 12.10 12.12 12.09 12.10 12.14
Observations 3 12.11 12.10 12.11 12.08 12.13
4 12.08 12.11 12.15 12.10 12.12
x 12.10 12.12 12.11 12.10 12.12

R ......
UCLX ......
LCLX ......
X-Bar Chart: Example Revisited

SAMPLES
1.00 2.00 3.00 4.00 5.00
1 12.11 12.15 12.09 12.12 12.09
2 12.10 12.12 12.09 12.10 12.14
Observations 3 12.11 12.10 12.11 12.08 12.13
4 12.08 12.11 12.15 12.10 12.12
x 12.10 12.12 12.11 12.10 12.12
R 0.03 0.05 0.06 0.04 0.05

0.03 0.05 0.06 0.04 0.05

R 0.042
5
UCL X X A2 R 12.11 0.7290.042 12.14
LCL X X A2 R 12.11 0.7290.042 12.08

How do we know if the process Range is in control?

Use R-chart
R-Chart

R-chart is used to test if there is a (non random) shift in the process

variation

UCL R D4 R
R

LCLR D3 R

1 2 3 4 5 6 7 8 9 10
Sample Number (each of size n)

Why are the Upper and Lower Control Limits so decided?

R-Chart

UCLR R 3 R LCLR R 3 R

R d 3 R d
2

dR d3 R
UCL R R 3 3 D4 R LCL R R 3 D3 R
d2 d2
3 Control Chart Factors
R-Chart: Example

SAMPLES
1.00 2.00 3.00 4.00 5.00
1 12.11 12.15 12.09 12.12 12.09
2 12.10 12.12 12.09 12.10 12.14
Observations 3 12.11 12.10 12.11 12.08 12.13
4 12.08 12.11 12.15 12.10 12.12
x 12.10 12.12 12.11 12.10 12.12

R ......
UCLR ......
LCLR ......
R-Chart: Example

SAMPLES
1.00 2.00 3.00 4.00 5.00
1 12.11 12.15 12.09 12.12 12.09
2 12.10 12.12 12.09 12.10 12.14
Observations 3 12.11 12.10 12.11 12.08 12.13
4 12.08 12.11 12.15 12.10 12.12
x 12.10 12.12 12.11 12.10 12.12
R 0.03 0.05 0.06 0.04 0.05

0.03 0.05 0.06 0.04 0.05

R 0.042
5
UCL R D4 R 2.280.042 0.096
LCLR D3 R 00.042 0
R-Chart: Example

All the sample ranges are within the control limits. Hence, the
process variation seems to be in control.
Kick Scooter Example Revisited

32
X-Bar Chart for Kick Steer Support height

X 79.951 R 0.0402
UCLR D4 R 2.110.0402 0.0848 LCLR D3 R 00.0402 0

UCL X X A2 R 79.951 0.580.0402 79.974

LCL X X A2 R 79.951 0.580.0402 79.928
X-Bar Chart for Kick Steer Support height
Type I and Type II Errors

How the process is observed to be

How the process actually is

In control Out of control

In control No Error Type I error

(producers risk)

Out of Type II Error No Error

control (consumers risk)