ISHIKAWA S 7 TOOL OF QUALITY PARETO DIAGRAMS AND CONTROL CHARTS NEFİSE M. NABİ

Transcription

1 ISHIKAWA S 7 TOOL OF QUALITY PARETO DIAGRAMS AND CONTROL CHARTS NEFİSE M. NABİ

2 WHO İS VİLFREDO PARETO Vilfredo Federico Damaso Pareto ; born Wilfried Fritz Pareto, 15 July August 1923) was an Italian engineer, sociologist, economist, political scientist, and philosopher, now also known for the 80/20 rule, named after him as the Pareto principle. He made several important contributions to economics, particularly in the study of income distribution and in the analysis of individuals' choices. He was also responsible for popularising the use of the term "elite" in social analysis.

3 In 1906, Italian economist Vilfredo Pareto discovered that 80% of the land in Italy was owned by just 20% of the people in the country. He extended this research and found out that the disproportionate wealth distribution was also the same across all of Europe. The 80/20 rule was formally defined as the rule that the top 20% of a country s population accounts for an estimated 80% of the country s wealth or total income.

4 What is a 'Pareto Analysis' Pareto Analysis is a technique used for business decision making based on the 80/20 rule. It is a decision-making technique that statistically separates a limited number of input factors as having the greatest impact on an outcome, either desirable or undesirable. Pareto analysis is based on the idea that 80% of a project's benefit can be achieved by doing 20% of the work or conversely 80% of problems are traced to 20% of the causes.

5 Joseph Juran, a Romanian-American business theorist stumbled on Pareto s research work 40 years after it was published, and named the 80/20 rule Pareto s Principle of Unequal Distribution. Juran extended Pareto s Principle in business situations to understand whether the rule could be applied to problems faced by businesses. He observed that in quality control departments, most production defects resulted from a small percentage of the causes of all defects, a phenomenon which he described as the vital few and the trivial many. Following the work of Pareto and Juran, the British NHS Institute for Innovation and Improvement provided that 80% of innovations comes from 20% of the staff; 80% of decisions made in meetings comes from 20% of the meeting time; 80% of your success comes from 20% of your efforts; 80% of complaints you make are from 20% of your services;

6 Today, Pareto Analysis is employed by business managers in all industries who try to determine which issues are causing the most problems within their departments, organizations, or sectors. To identify these issues, a good approach is to conduct a statistical technique, such as a cause and effect analysis, to produce a list of potential problems and the outcomes of these problems. Following the information provided from the cause and effect analysis, the 80/20 analysis can be applied.

7 We can apply the 80/20 rule to almost anything: 80% of customer complaints arise from 20% of your products and services. 80% of delays in the schedule result from 20% of the possible causes of the delays. 20% of your products and services account for 80% of your profit. 20% of your sales force produces 80% of your company revenues. 20% of a systems defects cause 80% of its problems.

8 Step 1: Identify and List Problems Firstly, write a list of all of the problems that you need to resolve. Where possible, talk to clients and team members to get their input, and draw on surveys, helpdesk logs and suchlike, where these are available. Step 2: Identify the Root Cause of Each Problem Step 3: Score Problems Now you need to score each problem. The scoring method you use depends on the sort of problem you're trying to solve. How to use Pareto analysis Step 4: Group Problems Together By Root Cause Next, group problems together by cause. For example, if three of your problems are caused by lack of staff, put these in the same group. Step 5: Add up the Scores for Each Group You can now add up the scores for each cause group. The group with the top score is your highest priority, and the group with the lowest score is your lowest priority. Step 6: Take Action Now you need to deal with the causes of your problems, dealing with your toppriority problem, or group of problems, first. Keep in mind that low scoring problems may not even be worth bothering with - solving these problems may cost you more than the solutions are worth.

9 Jack has taken over a failing service center, with a host of problems that need resolving. His objective is to increase overall customer satisfaction. Pareto Analysis Example He decides to score each problem by the number of complaints that the center has received for each one. (In the table below, the second column shows the problems he has listed in step 1 above, the third column shows the underlying causes identified in step 2, and the fourth column shows the number of complaints about each column identified in step 3.)

10 # Problem (Step 1) Cause (Step 2) Phones aren't answered quickly enough. Staff seem distracted and under pressure. Engineers don't appear to be well organized. They need second visits to bring extra parts. Engineers don't know what time they'll arrive. This means that customers may have to be in all day for an engineer to visit. Service center staff don't always seem to know what they're doing. When engineers visit, the customer finds that the problem could have been solved over the phone. Score (Step 3) Too few service center staff. 15 Too few service center staff. 6 Poor organization and preparation. 4 Poor organization and preparation. 2 Lack of training. 30 Lack of training. 21

11 Jack then groups problems together (steps 4 and 5). He scores each group by the number of complaints, and orders the list as follows: Lack of training (items 5 and 6) 51 complaints. Too few service center staff (items 1 and 2) 21 complaints. Poor organization and preparation (items 3 and 4) 6 complaints.

12 Pareto Analysis is a simple technique for prioritizing problem-solving work so that the first piece of work you do resolved the greatest number of problems. It's based on the Pareto Principle (also known as the 80/20 Rule) the idea that 80 percent of problems may be caused by as few as 20 percent of causes. KEY POİNTS To use Pareto Analysis, identify and list problems and their causes. Then score each problem and group them together by their cause. Then add up the score for each group. Finally, work on finding a solution to the cause of the problems in group with the highest score. Pareto Analysis not only shows you the most important problem to solve, it also gives you a score showing how severe the problem is.

13 Here are eight steps to identifying the principal causes you should focus on, using Pareto Analysis: Create a vertical bar chart with causes on the x-axis and count (number of occurrences) on the y-axis. Arrange the bar chart in descending order of cause importance that is, the cause with the highest count first. Calculate the cumulative count for each cause in descending order. EXAMPLE Calculate the cumulative count percentage for each cause in descending order. Percentage calculation: {Individual Cause Count} / {Total Causes Count}*100 Create a second y-axis with percentages descending in increments of 10 from 100% to 0%. Plot the cumulative count percentage of each cause on the x-axis. Join the points to form a curve. Draw a line at 80% on the y-axis running parallel to the x-axis. Then drop the line at the point of intersection with the curve on the x-axis. This point on the x-axis separates the important causes on the left (vital few) from the less important causes on the right (trivial many).

14 PARETO DİAGRAM

15 RESULT Here is a simple example of a Pareto diagram, using sample data showing the relative frequency of causes for errors on websites. It enables you to see what 20% of cases are causing 80% of the problems and where efforts should be focussed to achieve the greatest improvement. In this case, we can see that broken links, spelling errors and missing title tags should be the focus. The value of the Pareto Principle for a project manager is that it reminds you to focus on the 20% of things that matter. Of the things you do for your project, only 20% are crucial. That 20% produces 80% of your results. Identify, and focus on those things first, but don't entirely ignore the remaining 80% of the causes.

16 Some Problems Difficulties Associated With Pareto Analysis Misrepresentation of the data. Inappropriate measurements depicted. Lack of understanding of how it should be applied to particular problems. Knowing when and how to use Pareto Analysis. Inaccurate plotting of cumulative percent data.

17 Overcoming The Difficulties Define the purpose of using the tool. Identify the most appropriate measurement parameters. Use check sheets to collect data for the likely major causes. Arrange the data in descending order of value and calculate % frequency and/or cost and cumulative percent. Plot the cumulative percent through the top right side of the first bar. Carefully scrutinize the results. Has the exercise clarified the situation?

18 Videos

19 - A statistical tool to determine if a process is in control. Control Charts Developed in 1920 s By Dr. Walter A. Shewhart Shewhart worked for Bell Telephone Labs

20 The control chart focuses on the time dimension and the nature of the variability in the system. CONTROL CHARTS The control chart may be used to study past performance and/or to evaluate present conditions Data collected from a control chart may form the basis for process improvement.

21 VARİABLE CONTROL CHARTS Deal with items that can be measured. Examples 1) Weight 2) Height 3) Speed 4) Volume

22 VARİABLE CONTROL CHARTS X chart: deals with a average value in a process R chart: takes into count the range of the values MA chart: take into count the moving average of a process

23 EXAMPLE

24 EXAMPLE

25 Control charts that factor in the quality attributes of a process to determine if the process is performing in or out of control. Attribute Control Charts P Chart: a chart of the percent defective in each sample set. C chart: a chart of the number of defects per unit in each sample set. U chart: a chart of the average number of defects in each sample set.

26 EXAMPLE

27 Reasons for using Control Charts Improve productivity Make defects visible Determine what process adjustments need to be made Determine if process is in or out of control

28 Real World Use of Control Charts Example from Managing Quality by Foster. The Sampson company develops special equipment for the United States Armed Forces. They need to use control charts to insure that they are producing a product that conforms to the proper specifications. Sampson needs to produce high tech and top of the line products, daily so they must have a process that is capable to reduce the risks of defects.

29 How Will Using Control Charts help your Company? Possible Goals when using Control Charts in your Company: Line reengineering Increased Employee motivation Continually improve of your process Increased profits Zero defects

30 Out of Control: the process may not performing correctly Control Chart Key Terms In Control: the process may be performing correctly UCL: upper control limit LCL: lower control limit Average value: average

31 Process is OUT of control if: One or multiple points outside the control limits Eight points in a row above the average value Multiple points in a row near the control limits

32 Process is IN control if: The sample points fall between the control limits There are no major trends forming, i.e.. The points vary, both above and below the average value.

33 EXAMPLE

34 Average Value: take the average of the sample data UCL: Multiply the Standard deviation by three. Then add that value to the Average Value. Calculating Major Lines in a Control Chart LCL: Multiply the Standard deviation by three. Then subtract that value from the Average Value. UCL = Process Average + 3 Standard Deviations LCL = Process Average - 3 Standard Deviations

35 How to Calculate the standard deviation CONTROL CHARTS P chart: P= percent or rate N= number of trails How to Calculate the standard deviation C chart: X= the average

36 How to Calculate the control limits X-bar Chart: CONTROL CHARTS Lower Control Limit: Mean 3*sigma n(1/2) Center Line: Process mean Upper Control Limit: Mean + 3*sigma n(1/2)

37 How to Calculate the control limits CONTROL CHARTS R chart: Lower Control Limit: R-Bar 3*d3*sigma Center Line: R-Bar Upper Control Limit: R-Bar + 3*d3*sigma

38 The sample set of data should be greater than 28. SAMPLE SİZE The data should have been collected uniformly The data should contain multiple capable points of data, or the information is incorrect.

39 EXAMPLE First Step: Determine what type of data you are working with. Second Step: Determine what type of control chart to use with your data set. Third Step: Calculate the average and the control limits.

40 You have gathered a sample set of data for your company. The data is in the form of percents. Your company wants your recommendation, is the process in control. What type of control chart should you use? (Variable or Attribute) PROBLEM What type of specific control chart should you use with that type of sample set? (X-bar, R-chart, MA-chart, P- chart, R-chart, or U-chart) Now that you have determined the control chart to use, you have to calculate the average and standard deviation. Use the data on the following slide. Take notice to the amount of sample data. (n>28)

41 SAMPLE DATA Day Percent Day Percent

42 PROBLEM Now that you have calculated the three important lines for the control chart, plot the data and determine if the process is capable. (i.e. The data falls mostly inside the UCL, and the LCL)

43 FİNAL STEP Make a recommendation to your company. The process is capable The process is not capable The following errors were found. The process needs improvement The variations are normal in the system and we must accept them.

44 Control chart:out of control signals

45 THANK YOU!