FOR COURSES IN:

Operations Management Quality Management Statistical Process Control

Operations Management Simulation:

QUALITY ANALYTICS

by Barbara Flynn, Indiana University

In this single-player simulation, students learn how to manage quality in service, health care, and manufacturing settings through the use of analytics related to statistical process control (SPC), process capability, and the cost of quality. Students play 4

different challenges that ask them to calculate control limits, use control limits in real time to maintain control of a process, analyze control charts post hoc to determine whether a process is capable, and make managerial invest-ments in preventive measures.

Students experiment with managerial decisions around process improvement to bring down the total cost of quality.

TEACHING THE SIMULATION

In order to play the simulation, students are expected to have basic knowledge about the purpose of control charts, calculation of control limits for X-bar and R charts, inter-

pretation of control charts, and process capability. This simulation is appropriate for business undergraduate and MBA students who are taking an introductory operations management

course or more advanced courses in quality management, Six Sigma, or SPC. It is appropriate as a mastery exercise after students have completed a module on quality management or SPC.

Operations Management Simulation: Quality Analytics

hbsp.harvard.edu

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THE 4 CHALLENGES

The simulation presents 4 separate challenges that illustrate key concepts in quality control.

■■ Using sample statistics, Challenge 1 asks students to calculate control limits for X-bar and R charts in a generic manufacturing setting.

■■ In Challenge 2, students use the control limits from Challenge 1 to inform decisions about machine recalibrations and labor swaps to keep the process in control while minimizing cost.

■■ In Challenge 3, students are pro-vided with 4 separate histograms (each for a different industry) with the means of all samples over a period of time and must determine whether each process is capable of producing to specifications.

■■ In Challenge 4, students make investment decisions related to prevention and appraisal in order to minimize the total cost of quality.

CONTROL CHARTS

The simulation uses control charts to illustrate a variety of lessons related to process control and process capability. Key learning objectives include balancing the costs of internal and external failures with the costs of bringing a process back into control, and understanding the difference between control limits and specification limits and how they work together to determine the capability of a process.

Students use X-bar and R charts to analyze a process in real time.

COST OF QUALITY

In addition to covering process control, the simulation teaches valuable lessons about process improvements. In Challenge 4, students experiment with invest-ments in prevention and appraisal to reduce internal and external failures. This challenge demonstrates how managerial investments in process improvement—while initially expensive—can ultimately lower the total cost of quality by reducing costly defects.

Challenge 3 helps students understand the difference between control limits and specification limits.

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Product #4404 | Single-player | Seat Time: 60 minutes | Developed in partnership with Forio Online Simulations

A Preview of the simulation is available on our web site at hbsp.harvard.edu.

A Free Trial allows full access to the entire simulation and is available to Premium Educators on our web site.

Premium Educator access is a free service for faculty at degree-granting institutions and allows access to Educator Copies, Teaching Notes, Free Trials, course planning tools, and special student pricing.

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■■ Operations Management Simulation: Benihana V2 #7003

■■ Operations Management Simulation: Process Analysis #3291

A comprehensive Teaching Note covers key learning objectives, including:

■■ A review of essential calculations in SPC, including control limits and process capability index

■■ How managerial decisions about quality control, including monitor-ing a process with SPC and making quality improvement investments, affect product yields and costs

■■ The relationship between internal failure costs, external failure costs, appraisal costs, and prevention costs and how they contribute to the total cost of quality

■■ How to use SPC in real time to make go/no go decisions about a process, 1 sample at a time

■■ The difference between a process that is in control and a process that is capable, through post hoc analysis of a control chart

■■ How managerial decisions about cost play out in the trade-off between cost and defect rate

Aggregated class results for Challenge 4 illustrate the classic “Cost of Quality” curve.

VIEWING SIMULATION RESULTS

Faculty have full and immediate access to the student results for Challenges 2, 3, and 4 via the Class Summary/Overview page. A graphical illustration of Challenge 4 results is also available.

FACULTY DEBRIEF SLIDES

Instructors have access to a PowerPoint template presenting specific topics for simulation debrief.

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