Quality Metrics

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Agenda
Week 7

• Review homework
• Chapter 3 -  11, 36(c)
• Case Study How We Slashed Response Time
• Lecture/discussion
• Chapter 4 Statistics
• Metrics
• Measurement
• Statistics

• Week 8 assignment
• Homework
• Problems chapter 4 2, 3

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Quality Metrics

• Chapter Four
• We best manage what we can measure

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Metric

• A metric is a verifiable measure stated in either
  quantitative or qualitative terms.
• 95 percent inventory accuracy
• as evaluated by our customers, we are providing
  above-average service

4
Metric

• A metric is a verifiable measure
• that
• captures performance in terms of how something is
  being done relative to a standard,
• allows and encourages comparison,
• supports business strategy.

5
Customer quality measures

• Customers typically relate quality to
• Feature based measures have or have not -
  determined by design
• Performance measures - range of values -
  conformance to design or ideal value

6
True versus substitute performance measures

• Customers - use true performance measures.
• example a true measure of a car door may be
  easy to close.
• true performance measures typically vary by each
  individual customer.
• Unfortunately, producers cannot measure
  performance as each individual customer does.
• Producers - use substitute performance measures
• these measures are quantifiable (measurable
  units).
• Substitute measure for a car door door closing
  effort (foot-pounds).
• Other example light bulb
• true performance measure -- brightens the room
• substitute performance measure wattage or
  lumens

7
Educating Consumers

• Sometimes, producers educate consumers on their
  substitute performance measures.
• What are substitute performance measures for the
  following customer desires
• Good Gas Mileage
• Powerful Computer
• What is the effect of educating consumers on
  performance measures?

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What is a metric?

• Another term for a substitute performance measure
  is a metric.
• Metric is a standard of measurement.
• In quality management, we use metrics to
  translate customer needs into producer
  performance measures.
• Internal quality metrics
• scrap and rework
• process capability (Cp or Cpk)
• first time through quality (FTTQ)

9
Identifying effective metrics

• Effective metrics satisfy the following
  conditions
• performance is clearly defined in a measurable
  entity (quantifiable).
• a capable system exists to measure the entity
  (e.g., a gage).
• Effective metrics allow for actionable responses
  if the performance is unacceptable.
• There is little value in a metric which
  identifies nonperformance if nothing can or will
  be done to remedy it.
• Example Is net sales a good metric to measure
  the performance of a manufacturing department?

10
Use of quality metrics

• Quality metric data may be used to
• spot trends in performance.
• compare alternatives.
• predict performance.
• However, organizations should consider the costs
  and benefits of collecting information for a
  particular quality metric.
• collecting data will not necessarily result in
  higher performance levels.
• higher quality companies often use fewer metrics
  than their competitors.

11
Acceptable ranges

• In practice, identifying effective metrics is
  often difficult.
• Main reason non-performance of a metric does not
  always lead to customer dissatisfaction.
• Consider the car door example again, if door
  closing effort is the metric, will a customer be
  dissatisfied if the actual effort is 50
  foot-pounds versus 55 foot-pounds.
• Producers typically identify ranges of acceptable
  performance for a metric.
• (a) For services, ranges often referred to as
  break points.
• (b) In manufacturing, these ranges are known as
  targets, tolerances, or specifications.

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Break points

• Break points are levels where improved
  performance will likely change customer behavior.
• Example waiting in line
• Suppose the average customer will only wait for 5
  minutes
• Wait longer than 5 minutes -- customer is
  dissatisfied.
• 1-5 minutes -- customer is satisfied.
• less than 1 minute -- customer is extremely
  satisfied
• Should a company try to reduce average wait time
  from 4 to 2 minutes.?

13
Targets, tolerances and specifications

• Target (nominal) - desired value of a
  characteristic.
• A tolerance specifies an allowable deviation from
  a target value where a characteristic is still
  acceptable.

Lower specification limit (LSL)
Upper specification limit (USL)
TARGET
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