SStatistical process control (SPC)

SStatistical process control (SPC) is the application of statistical techniques to determine whether a process is delivering what customers want. In SPC, tools called control charts are used primarily to detect defective services or products or to indicate that the process has changed and that services or products will deviate from their design specifications, unless something is done to correct the situation. SPC can also be used to inform management of improved process changes. Examples of process changes that can be detected by SPC include the following:▪ A decrease in the average number of complaints per day at a hotel▪ A sudden increase in the proportion of defective gear boxes▪ An increase in the time to process a mortgage application▪ A decline in the number of scrapped units at a milling machine▪ An increase in the number of claimants receiving late payment from an insurance companyLet us consider the last situation. Suppose that the manager of the accounts payable department of an insurance company notices that the proportion of claimants receiving late payments rose from an average of 0.01 to 0.03. The first question is whether the rise is a cause for alarm or just a random occurrence. Statistical process control can help the manager decide whether further action should be taken.If the rise in the proportion is not just a random occurrence, the manager should seek explanations of the poor performance. Perhaps the number of claims significantly increased causing an overload on the employees in the department. The decision might be to hire more personnel. Or perhaps the procedures being used are ineffective or the training of employees is inadequate. SPC is an integral part of TQM and Six Sigma.