Operations Management Report

Case Overview

The RTP industries has grown to be one of the most renowned steel and aluminium  producing company in Italy, Brazil, USA, China, India and UK. The quality of products produced has made most of the car industries in Asia and Europe to obtain metal related products from the RTP. Increased competition from other steel and aluminium industries in India and China has forced RTP whose head office is in London to introduce various strategies. As a strategy for competitive positioning, RTP has reduced its prices as well as introduced six new products in the market. The introduction of these products has revived the reputation of the organization as well as making it a desirable supplier and partner. Due to this success, the CEO of the company saw it necessary to initiate new company strategies to improve its quality of operations. This plan is aimed at identifying and fulfilling customers needs and reduce waste at all levels of the organization. To achieve this, the company has adopted some management tool associated with Total Quality Management.

Problem Statement

The increase in business competition witnessed recently calls for the establishment of measures help companies have a competitive advantage. Quality of the service and goods provided by organization has been the areas of concern for various companies. Organizations are competitively positioned in occasions where high quality of goods and services are provided.   For this reason, many companies have turned to observing all the relevant processes that help improve goods and services quality (Berger, 1986). 

Increased customer return rate due to the surface and size quality in the RTP industry called for the formulation of strategies aimed at responding to the customers concerns. For this reason, Mr. John Smith is implementing the statistical process control in the steel company plant based in Northern England. Being the quality manager, he has done enough research and selected a hydraulic manufacturing plant so as to measure its performance using SPC based on problems of these steel products and how they can be corrected. Mr. Smith trained a number of productions manager who were supposed to monitor the implementation of SPC and their findings to him.

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Research Methodology

Among these tools is the Statistical Process Control (SPC) that the company intends to use in order to assess the performance of its manufacturing procedure to see whether it achieves the necessary standards. This was done through collection of data obtained by observing three randomly obtained steel rods.  The diameters of the samples obtained were measured and values recorded in centimetres.  Similarly, the surface defects of the samples obtained in 25 days were inspected and observations recorded.  Data was recorded in two different tables each covering 25 days period for three samples daily for specific quality being observed. That is diameter or surface defects. Data obtained was then analyzed using the statistical Process Control (Doty, 1986). 

The Stewart chart should have been used as the control chart because it could help determine whether the manufacturing process was in a statistical control state. The chart has three sections which are determined by the standard error of the process being investigated. The region helps engineers in charge of the area being studied to ascertain whether the process being undertaken is under control or not.

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Results and Analysis


The mean X' for the diameter for each 25 days was obtained as follow,


The mean of mean (x'') was obtained using the formula

X''=∑x'÷25= 265.291÷25= 10.60

The same formula was used to determine the mean, and mean of mean for the surface defects.

Upper control limit (UCL) (Diameter) = x''+ z δx= 10.60+ 0.144= 10.744

Lower control limit (LCL) (Diameter) = x''- z δx = 10.60-0.144 = 10.456

Where δ is the standard deviation obtained by the formula:

   δ= [∑ (x'-x'') 2 ÷ (n)] 1/2 = √[(0.12)2÷25]= 0.24

                        δx = δ÷√n = 0.24÷ 5=  0.048

Where n represents the frequency of data collected and Z is a constant equal to 3. For surface defects,

UCL=0.48+0.24= 0.72

LCL=0.48 - 0.24= 0.24

From the control chart, it is evident that the industrial processes used in the company are under control. This is because the points plotted on the range chart fell within the natural process limits of the industry. However, most of the points on the mean curve for diameter or thickness feel out of the natural process limits of the concerned company. This may be an indication that process used by the company in determination of the diameter ought to be observed and the necessary changes made. Deviations from the limits established limits   imply that those responsible for the concerned processes should ascertain whether a special cause has occurred. When special causes occur, it must be established whether such are worse or better than the results from the common cause. For this case, the special cause occurred in the process as plotted on the control graph. However, the special causes seemed worse than expected results from common causes. Therefore, measures that should facilitate the improving the quality of rods produced.

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That is, the defects obtained were within the lower and upper control limits of the company's manufacturing process.   Therefore, the surface and diameter defects result from the company's processes.  In order to improve on the surface and diameter quality, the processes used in the manufacturing the steel rods must either be changed or improved.


Top facilitate the production of better quality steel rods, the RTP Company should use SPC tool. This will help the company identify the causes of defects and the best possible way of solving the observed defects. The method also helps the company regularly monitor its production processes and thus observe any changes that may comprise the quality of its products.  Similarly, possible measures that may help improve quality of products may also be established.



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