ANALYSIS

We are using Statistical process control for analyzing service time monitoring process at the drive-
through window through quantitative operations management study.

Objective of Statistical process control

To provide a statistical signal when assignable causes of variation are present.

It helps in taking appropriate action to eliminate assignable causes.

Variations

1. Natural Variations
2. Assignable Variations

Natural Variations

 Affect almost every process and are to be expected.

 Many sources of variation that occur within a process, even one that is in statistical control.
 Forms a pattern such as distribution.
 If the distribution of outputs falls within specified limits, the process is said to be “in control”.
 To ensure the process is capable of operating under control with only natural variation.

Assignable Variations

 These variations can be traced to a specific reason.

 Different factors such as misadjusted equipment, untrained workers, etc. are some of the potential
sources of assignable variations.
 Identify and eliminate assignable variations to keep the process under control.

Samples

Statistical process control uses averages of small samples (in our case 6 items) as opposed to data on
individual parts.
Individual sample tend to be too erratic to make trend quickly visible.

We collected six service time observations daily over a period of 15 days.

The data are displayed below:

 OBSERVATIONS OF SERVICE TIME (MIN)
Sample
1 2 3 4 5 6
1 1.62 1.54 1.38 1.75 2.5 1.32
2 1.25 1.96 1.55 1.66 1.38 2.01
3 1.85 1.01 0.95 1.79 1.66 1.94
4 3.1 1.18 1.25 1.45 1.09 2.11
5 1.95 0.76 1.34 2.21 1.45 1.03
6 0.88 2.5 1.07 1.5 1.33 1.62
7 1.55 1.41 1.95 1.14 1.86 1.02
8 2.78 1.56 1.87 2.03 0.79 1.14
9 1.31 1.05 0.94 1.53 1.71 1.15
10 1.67 1.85 2.03 1.12 1.5 1.36
11 0.95 1.73 1.12 1.67 2.05 1.42
12 3.21 4.16 1.67 1.75 2.87 3.76
13 1.65 1.78 2.63 1.05 1.21 2.09
14 2.36 3.55 1.92 1.45 3.64 2.3
15 1.07 0.96 1.13 2.05 0.91 1.66

Control Charts

The purpose of control charts is to help distinguish between natural variations and variations due to
assignable causes.

As per Central Limit Theorem,

Regardless of the distribution of the population, the distribution of sample means drawn from the
population will tend to follow a normal curve.

The mean of the sampling distribution (Xdoublebar) will be the same as the population mean (µ).

X-bar Chart

This chart helps us in assessing the changes in the central tendency (mean) of a process (service time).

Setting Mean Chart Limits

For unknown population standard deviation, we can set upper and lower control limits by using below
formulas:

Upper control limit (𝑈𝐶𝐿𝑥𝑏𝑎𝑟) = 𝑋doublebar + A2*R-bar

Lower control limit (𝐿𝐶𝐿𝑥𝑏𝑎𝑟) = 𝑋doublebar - A2*R-bar

Where,

R-bar = average range of samples

A2 = control chart factor
𝑋doublebar = mean of the sample means

Here, sample size (n) is 6.

Hence, A2 (n=6) = 0.483 (Refer attached Control Chart Factors table)

OBSERVATIONS OF SERVICE TIME (MIN)

Sample Mean (x̅) Range
1 2 3 4 5 6
1 1.62 1.54 1.38 1.75 2.5 1.32 1.685 1.18
2 1.25 1.96 1.55 1.66 1.38 2.01 1.635 0.76
3 1.85 1.01 0.95 1.79 1.66 1.94 1.533333 0.99
4 3.1 1.18 1.25 1.45 1.09 2.11 1.696667 2.01
5 1.95 0.76 1.34 2.21 1.45 1.03 1.456667 1.45
6 0.88 2.5 1.07 1.5 1.33 1.62 1.483333 1.62
7 1.55 1.41 1.95 1.14 1.86 1.02 1.488333 0.93
8 2.78 1.56 1.87 2.03 0.79 1.14 1.695 1.99
9 1.31 1.05 0.94 1.53 1.71 1.15 1.281667 0.77
10 1.67 1.85 2.03 1.12 1.5 1.36 1.588333 0.91
11 0.95 1.73 1.12 1.67 2.05 1.42 1.49 1.1
12 3.21 4.16 1.67 1.75 2.87 3.76 2.903333 2.49
13 1.65 1.78 2.63 1.05 1.21 2.09 1.735 1.58
14 2.36 3.55 1.92 1.45 3.64 2.3 2.536667 2.19
15 1.07 0.96 1.13 2.05 0.91 1.66 1.296667 1.14

Thus,

Mean of the sample means (𝑋doublebar) = 1.700333 ≈ 1.70 (rounding to 2 decimal places)

Average range of samples (R-bar) = 1.407333333 ≈ 1.40 (rounding to 2 decimal places)

Upper control limit (𝑈𝐶𝐿𝑥𝑏𝑎𝑟) = 𝑋doublebar + A2*R-bar

= 1.70 + (0.483 * 1.40)

= 2.3762 ≈ 2.38 (rounding to 2 decimal places)

Lower control limit (𝐿𝐶𝐿𝑥𝑏𝑎𝑟) = 𝑋 𝑑𝑜𝑢𝑏𝑙𝑒𝑏𝑎𝑟 - A2*R-bar

= 1.70 - (0.483 * 1.40)

= 1.0238 ≈ 1.02 (rounding to 2 decimal places)

X - bar Chart
3.5

2.5
UCL
SAMPLE MEAN

2
CL
1.5

1
LCL
0.5

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
DAYS

Sample Mean X-doublebar UCL LCL

Based on the above plotted X – bar chart, we can identify the samples that falls under control limit and
out of control limit.

Sample means out of control: 2.903333 ≈ 2.90 and 2.536667 ≈ 2.54

 Samples out of control

OBSERVATIONS OF SERVICE TIME (MIN)

Sample
1 2 3 4 5 6
1 1.62 1.54 1.38 1.75 2.5 1.32
2 1.25 1.96 1.55 1.66 1.38 2.01
3 1.85 1.01 0.95 1.79 1.66 1.94
4 3.1 1.18 1.25 1.45 1.09 2.11
5 1.95 0.76 1.34 2.21 1.45 1.03
6 0.88 2.5 1.07 1.5 1.33 1.62
7 1.55 1.41 1.95 1.14 1.86 1.02
8 2.78 1.56 1.87 2.03 0.79 1.14
9 1.31 1.05 0.94 1.53 1.71 1.15
10 1.67 1.85 2.03 1.12 1.5 1.36
11 0.95 1.73 1.12 1.67 2.05 1.42
12 3.21 4.16 1.67 1.75 2.87 3.76
13 1.65 1.78 2.63 1.05 1.21 2.09
14 2.36 3.55 1.92 1.45 3.64 2.3
15 1.07 0.96 1.13 2.05 0.91 1.66
Values highlighted in red color in below table are out of control.

Here,

Total number of samples which are out of control- 21 out of 90

% samples out of control = (21/90)* 100

= 23.33 ≈ 23%

Rest 77 % of the samples are under control.

As per the analysis, we can say that the quality of service has improved.

In order to maintain quality service, to make sure that the service time remained fast (Samples under
control limit ≈ 77%), and to continue to improve service (Samples under control limit > 77%), the quality
management team should have to perform a quantitative operations management study on a continuing
basis.
Process Capability

 The ability of a process to meet design specifications, set by engineering design or customer
requirements.
 It is a measure of the relationship between the natural variation of the process and the design
specifications.

Process Capability Index (Cpk)

 It measures the difference between the desired and actual dimensions of goods or services
produced.
 It measures the ability of a process to produce output within specification limits.

𝑈𝑆𝐿 − 𝑋𝑏𝑎𝑟 𝑋𝑏𝑎𝑟 − 𝐿𝑆𝐿

𝐶𝑝𝑘 = Minimum of( , )
3𝜎 3𝜎

Where, Xbar = process mean

σ = standard deviation of the process population

Here, Xbar ≈ Xdoublebar = 1.70

To be competitive, the management of Taste Buds believes the service time should be reduced to about
2.0 minutes and ideally 1.5 minutes.

Hence, Service time specification limit can be considered as 1.75 +/- 0.25 minutes

Thus,

USL = 2.0 minutes

LSL = 1.5 minutes

σ = 0.44132251 ≈ 0.44 (Refer attached worksheet for calculation)

Thus,
Cpk = {min ((2-1.70)/ (3*0.44), (1.70-1.5) / (3*0.44))}

= min (0.23, 0.15)

Cpk = 0.15

A capable process must have a Cpk of at least 1.0

Here, Cpk < 1.0
Hence, the process is NOT capable.

Time Studies
It involves timing a sample of a worker’s performance and using it to set a standard.

Time and Performance

Average Observed time = Sum of times recorded to perform each element

# of observations

Normal time = (Avg. Observed time) * (Performance rating factor)

Total Normal Time = sum of normal times for each element

Observed time: The time measured to finish a task.

Performance rating factor: The rate at which the person is working.
If rating is
90% - the person is working slower than normal
100% - normal
110% - the person is working faster than normal

Standard time = Total normal time

1 – Allowance factor
Assuming,

Performance rating factor = 105%

Allowance factor = 6%

OBSERVATIONS OF SERVICE TIME (MIN) Average

Sample Observed Normal Time
1 2 3 4 5 6 Time
1 1.62 1.54 1.38 1.75 2.5 1.32 1.685 1.76925
2 1.25 1.96 1.55 1.66 1.38 2.01 1.635 1.71675
3 1.85 1.01 0.95 1.79 1.66 1.94 1.533333333 1.61
4 3.1 1.18 1.25 1.45 1.09 2.11 1.416 1.4868
5 1.95 0.76 1.34 2.21 1.45 1.03 1.456666667 1.5295
6 0.88 2.5 1.07 1.5 1.33 1.62 1.28 1.344
7 1.55 1.41 1.95 1.14 1.86 1.02 1.488333333 1.56275
8 2.78 1.56 1.87 2.03 0.79 1.14 1.478 1.5519
9 1.31 1.05 0.94 1.53 1.71 1.15 1.281666667 1.34575
10 1.67 1.85 2.03 1.12 1.5 1.36 1.588333333 1.66775
11 0.95 1.73 1.12 1.67 2.05 1.42 1.49 1.5645
12 3.21 4.16 1.67 1.75 2.87 3.76 2.652 2.7846
13 1.65 1.78 2.63 1.05 1.21 2.09 1.735 1.82175
14 2.36 3.55 1.92 1.45 3.64 2.3 2.0075 2.107875
15 1.07 0.96 1.13 2.05 0.91 1.66 1.296666667 1.3615
Delete unusual or nonrecurring observations (highlighted in red)

Hence,

Total Normal
Time 25.22468
Performance
Rating factor 1.05
Allowance
Factor 0.06
Standard Time 26.83476

(Refer attached worksheet for calculation)

In normal time, no allowances are included. However, standard time include allowances.

We calculate normal and standard time in order to evaluate whether the employees are performing as well
as they should.

Here, there is not much difference between normal and standard time.

Hence, we can say that employees are performing up to the standard.

 REFERENCES

Operations Management, 11th Edition (Heizer & Render)

http://www.slideshare.net/MEHAKGHAI/topic-3-quality-and-performance
 APPENDIX

Table data and corresponding control charts:

Taste Buds.xlsx

Control Chart Factors table

Control Chart
Factors.jpg