Chapter 1 Introduction Historical Background

Statistical Quality Control includes both (1) the application of statistical sampling theory that deals with quality assurance and (2) the use of statistical techniques to monitor and control a process. The former includes Acceptance Sampling Procedures for inspecting incoming parts or raw materials, and the latter (often referred to as Statistical Process Control or SPC) employs the use of control charts, continuous improvement tools and the design of experiments for early detection and prevention of problems, rather than correction of problems that have already occurred.

1.1 Origins of Statistical Quality Control

Quality Control is as old as industry itself, but the application of statistical theory to quality control is relatively recent. When AT&T was developing a nationwide telephone system at the beginning of the 20th century, sampling inspection was used in some form at the Western Electric Company (the AT&T equipment manufacturing arm). Also, according to an article in the General Electric Review in 1922, some formal attempts at scientific acceptance sampling techniques were being made at the G.E. Lamp Works.

At Western Electric, an Inspection Engineering Department was formed, which later became the Quality Assurance Department of the Bell Telephone Laboratories. In 1924, Walter Shewhart, a physicist and self-made statistician, was assigned to examine and interpret inspection data from the Western Electric Company Hawthorn Works. It was apparent to him that little useful inference to the future could be drawn from the records of past inspection data, but he realized that something serious should be done, and he conceived the idea of statistical control. It was based on the premise that no action can be repeated exactly. Therefore, all manufactured product is subject to a certain amount of variation that can be attributed to a system of chance causes. Stable variation within this system is inevitable. However, the reasons for special cause variation outside this stable pattern can (and should) be recognized and eliminated.

The control chart he perceived was founded on sampling during production rather than waiting until the end of the production run. Action limits were calculated from the chance cause variation in the sample data, and the process could be immediately stopped and adjusted when additional samples fell outside the action limits. In that way, production output could be expected to stay within defined limits.

The early dissemination of these ideas was limited to the circulation of memos within the Bell Telephone System. However, the soundness of the proposed methods was thoroughly validated by staff at Western Electric and the Bell Telephone Laboratories. The methods worked effectively and were soon made part of the regular procedures of the production divisions. Shewhart’s ideas were eventually published in his 1931 book The Economic Control of Quality of Manufactured Product (Shewhart 1931).

W. Edwards Deming from the U.S. Department of Agriculture and the Census Bureau, who developed the sampling techniques that were first used in the 1940 U.S. Census, was introduced to Shewhart in 1927. He found great inspiration in Shewhart’s theory of chance (that he renamed common) and special causes of variation. He realized these ideas could be applied not only to manufacturing processes but also to administrative processes by which enterprises are led and managed. However, many years later in a videotaped lecture Deming said that while Shewhart was brilliant, he made things appear much more difficult than necessary. He therefore spent a great deal of time copying Shewhart’s ideas and devising simpler and more easily understood ways of presenting them.

Although Shewhart’s control charts were effective in helping organizations control the quality of their own manufacturing processes, they were still dependent on the quality of raw materials, purchased parts and the prevailing quality control practices of their suppliers. For these reasons, sampling inspection of incoming parts remained an important part of statistical quality control.

Harold F. Dodge joined Western Electric Corporation shortly after Shewhart did. He wondered, “how many samples were necessary when inspecting a lot of materials”, and began developing sampling inspection tables. When he was joined by Harry G. Romig, together they developed double sampling plans to reduce the average sample size required, and by 1927 they had developed tables for rectification inspection indexed by the lot tolerance and AOQL (average outgoing quality level). Rectification sampling required removal of defective items through 100% inspection of lots in which the number defective in the sample was too high. Dodge and Romig’s sampling tables were published in the Bell System Technical Journal in 1941(Dodge and Romig 1941).

The work of Shewhart, Dodge and Romig at Bell Telephone constitutes much of the statistical theory of quality control. In the 1930s, the Bell System engineers who developed these methods sought to popularize them in cooperation with the American Society for Testing and Materials, The American Standards Association and the American Society of Mechanical Engineers. Shewhart also traveled to London where he met with prominent British statisticians and engineers.

Despite the attempts at publicity, adoption of statistical quality control in the United States was slow. Most engineers felt their particular situation was different and there were few industrial statisticians who were adequately trained in the new methods. By 1937, only a dozen or more mass production industries had implemented the methods in normal operation. There was much more rapid progress in Britain, however. There statistical quality control was being applied to products such as coal, coke, textiles, spectacle glass, lamps, building materials, and manufactured chemicals (Freeman 1937).

1.2 Expansion and Development of Statistical Quality Control during WW II

The initial reluctance to adopt statistical quality control in the United States was quickly overcome at the beginning of World War II. Manufacturing firms switched from the production of consumer goods to defense equipment. With the buildup of military personnel and material, the armed services became large consumers of American goods, and they had a large influence on quality standards.

The military had impact on the adoption of statistical quality control methods by industry in two different ways. The first was the fact that the armed services themselves adopted statistically derived sampling and inspection methods in their procurement efforts. The second was the establishment of a widespread educational program for industrial personnel at the request of the War Department.

Sampling techniques were used at the Picatinney Arsenal as early as 1934 under direction of L. E. Simon. In 1936 the Bell Telephone Laboratories were invited to cooperate with the Army Ordnance Department and the American Standards Association Technical Committee in developing war standards for quality control. In 1942, Dodge and Romig completed the Army Ordnance Standard Sampling Inspection Tables, and the use of these tables was introduced to the armed services through a number of intensive training courses.

The Ordnance Sampling Inspection tables employed a sampling scheme based on an acceptable quality level (AQL). The scheme assumed that there would be a continuing stream of lots submitted by a supplier. If the supplier’s quality level was worse than the AQL, the scheme would automatically switch to tightened inspection and the supplier would be forced to bear the cost of a high proportion of lots rejected and returned. This scheme encouraged suppliers to improve quality.

In 1940, the military established a widespread training program for industrial personnel, most notably suppliers of military equipment. At the request of the War Department, the American Standards Association developed American War Standards Z1.1-1941 and Guide for Quality Control Z.1-2-1941, Control Chart Method of Analyzing Data - 1941, and the Control Chart Method of Controlling Quality during Production Z1.3-1942. These defined the American control chart practice and were used as the text material for subsequent training courses that were developed at Stanford by Holbrook Working, E. L. Grant, and W. Edwards Deming. In 1942 this intensive course on statistical quality control was given at Stanford University to representatives of the war industries and procurement agencies of the armed services.

The early educational program was a success. That success, along with the suggestion from Dr. Walter Shewhart that Federal assistance should be given to American war industries in developing applications of statistical quality control, led the Office of Production and Research and Development (OPRD) of the War Production Board to establish a nationwide program. The program combined assistance in developing intensive courses for high ranking executives from war industry suppliers and direct assistance to establishments on specific quality control problems. The specific needs to be addressed by this program for the development of war-time development of statistical quality control were:

  1. Education of industrial executives regarding the basic concepts and benefits of statistical quality control

  2. Training of key quality control personnel in industry

  3. Advisory assistance on specific quality control problems

  4. Training of subordinate quality control personnel

  5. Training of instructors, and

  6. Publication of literature

The training of instructors was regarded as an essential responsibility of the OPRD program. The instructors used were competent and experienced university teachers of statistics who only needed to (1) extend their knowledge in in the specific techniques and theory most relevant to statistical quality control, (2) become familiar with practical applications, and (3) learn the instructional techniques that had been found to be most useful.

The plan was to have courses for key quality control personnel from industry given at local educational institutions, which would provide an instructor from their own staff. This plan was implemented with administrative assistance and grants from the Engineering, Science and Management War Training Program (ESMWT) funded by the U.S. Office of Education.

Much of the training of subordinate quality control personnel was given in their own plants by those previously trained. To stimulate people to actively advance their own education, the OPRD encouraged local groups to form. That way neighboring establishments could exchange information and experiences. These local groups resulted in the establishment of many regional quality control societies. The need for literature on statistical quality control was satisfied by publications of the American Standards Association and articles in engineering and technical journals.

As a result of all the training and literature, statistical quality control techniques were widely used during the war years. They were instrumental in insuring the quality and cost effectiveness of manufactured goods as the nations factories made the great turnaround from civilian to military production. For example, military aircraft production totaled 6000 in 1940 and jumped to 85,000 in 1943. Joseph Stalin stated that without the American production, the Allies could never have won the war.

At the conclusion of the War in 1946, seventeen of the local quality control societies formed during the war organized themselves into the American Society for Quality Control (ASQC). This society has recently been renamed the American Society for Quality (ASQ) to reflect the fact that Quality is essential to much more than manufacturing firms. It is interesting to note that outside the board room of ASQ in Milwaukee Wisconsin stands an exhibit memorializing W.E. Deming’s famous Red Bead Experiment (a teaching tool) that was used during the war effort to show managers the futility of the standard reaction to common causes of variation.

The development and use of sampling tables and sampling schemes for military procurement continued after the war, resulting in the MIL-STD 105A attributes sampling scheme, which was later revised as 105B, 105C, 105D, and 105E. In addition, variables sampling schemes were developed that eventually resulted in MIL-STD 414.

1.3 Use and Further Development of Statistical Quality Control in Post-War Japan

After the war, companies that had been producing defense equipment resumed producing goods for public consumption. Unfortunately, the widespread use of statistical quality control methods that had been used so effectively in producing defense equipment did not carry over into the manufacture of civilian goods. Women who filled many positions in inspection and quality improvement departments during the war left the workforce and were replaced by military veterans who were not trained in the vision and technical use of SPC. Industry in Europe lay in the ruins of war, and the overseas and domestic demand for American manufactured goods exceeded the supply. Selling everything they produced, company top managers failed to see the benefits of the extra effort required to improve quality. As the U. S. economy grew in the 1950s there were speculations of a coming recession, but it never came. The demand for products continued to increase leaving managers to believe they were doing everything right.

At the same time, U.S. occupation forces were in Japan trying to help rebuild their shattered economy. At the request of General Douglas McArthur, W. E. Deming was summoned to help in planning the 1951 Japan Census. Deming’s expertise in quality control techniques and his compassion for the plight of the Japanese citizens brought him an invitation by the Japanese Society of Scientists and Engineers (JUSE) to speak with them about SPC. At that time, what was left of Japanese manufacturing was almost worse than nothing at all. The label Made in Japan was synonymous with cheap junk in worldwide markets.

Members of JUSE had been interested in Shewharts ideas and they sought an expert to help them understand how they could apply them in the reconstruction of their industry. At their request, Deming, a master teacher, trained hundreds of Japanese academics, engineers, and managers in statistical quality control techniques. However, he was troubled by his experience in the United States where these techniques were only widely used for a short time during the war years. Therefore, his main message was to top management of companies. In meetings with executives in 1950, he emphasized the following simple principle: (1) Improve Quality \(\Rightarrow\) (2) Less Rework and Waste \(\Rightarrow\) (3) Productivity Improves \(\Rightarrow\) (4) Capture the Market with Lower Price and Better Quality \(\Rightarrow\) (5) Stay in Business \(\Rightarrow\) (6) Provide Jobs.

With nothing to lose, the Japanese manufactures applied the techniques and philosophy espoused by Deming and other American experts in Quality. The improved quality, along with lower cost of the goods, enabled the Japanese to create new international markets for Japanese products, especially automobiles and consumer electronics. Japan rose from the ashes of war to becoming one of the largest economies in the world. When Deming declined to accept royalties on the published transcripts of his 1950 lectures, the JUSE board of directors used the proceeds to establish the Deming Prize, a silver medal engraved with Demings profile. It is given annually in a nationally televised ceremony to an individual for contributions in statistical theory and to a company for accomplishments in statistical application.

As Deming predicted in 1950, Japanese products gained respect in worldwide markets. In addition, Japanese began to contribute new insights to the body of knowledge regarding SQC. Kaoru Ishikawa, a Deming Prize recipient, developed the idea of quality circles where foreman and workers met together to learn problem solving tools and apply them to their own process. This was the beginning of participative management. Ishikawa also wrote books on quality control including his Guide to Quality Control that was translated to English and defined the basic quality tools shown in (Christensen, Betz, and Stein 2013). Genichi Taguchi developed the philosophy of off-line quality control where products and processes are designed to be insensitive to common sources of variation that are outside the design engineers control.

When the Arab Oil Embargo caused the price of oil to increase from $3 to $12 per barrel in 1973, it created even more demand for small fuel-efficient Japanese cars. In the U.S, when drivers began to switch to the smaller cars, they noticed that in addition to being more fuel efficient, they were more reliable and less problematic. By 1979, U.S. auto manufactures had lost a major share of their market, and many factories were closed and workers laid off. This was a painful time, and when the NBC Documentary “If Japan Can, Why Can’t We” aired in 1979, it was instrumental in motivating industry leaders to start re-learning the quality technologies that that had helped Japan’s manufacturing, but were in disuse in the U.S.

1.4 Re-emergence of Statistical Quality Control in US and the World

Starting about 1980, top management of large U.S. Companies began to accept quality goals as one of the strategic parameters in business planning along with the traditional marketing and financial goals. For example, Ford Motor Company adopted the slogan “Quality is Job 1”, and they followed the plan of the Defense department in WW II by setting up training programs for their own personnel and for their suppliers. Other companies followed suit, and the quality revolution began in the U.S.

Market shares rebounded in manufactured goods such as automobiles, electronics, and steel. In addition, the definition of Quality expanded from just meeting manufacturing specifications to pleasing the customer. The means of providing quality through the expanded definition of SQC as espoused by Deming and others was adopted in diverse areas such as utility companies, health care institutions, banking and other customer service organizations.

A worldwide movement began using the same philosophy. In 1987, the International Organization of Standardization created the Standards for Quality Assurance Systems (ISO 9000). It was the acknowledgement of the worldwide acceptance of the systems approach to producing Quality. Certification of compliance to these standards are required for companies to participate in the European Free Trade Association (EFTA).

In 1988, the U.S. Congress established the Malcolm Baldrige National Quality Award named after the late secretary of commerce. This is similar to the Deming award in Japan, and it was a recognition by the U.S. government of the need to focus on the quality of products and services in order for the U.S. economy to remain competitive.

Other changes to statistical quality control practices have also taken place. The U. S. Department of Defense discontinued support of their Military Standards for Sampling Inspection in order to utilize civilian standards as a cost savings. The ANSI/ASQ Z1.4 is the civilian standard in the U.S. that replaces the MIL-STD 105E Attribute Sampling Inspection Tables. It is best used for domestic transactions or in-house use. The ISO 2851-1 is the international standard. It reflects the current state of the art and is recommended for international trade, where it is often required. The U.S. civilian standard to replace MIL-STD 414 Variables Sampling Plans is ANSI/ASQ Z1.9. It was designed to make the inspection levels coincide with the Z1.4 plans for attributes and adopts common switching rules. ISO 3951-1 is the international version with plans closely matched to the ISO 2851- attribute plans. It is also used in international trade.

Another change in the application of technical methodologies for quality control and quality improvement is the use of the computer. Prior to 1963, the only tools available to engineers and statisticians for calculations were slide rules or mechanical or electro-mechanical calculators. Sampling inspection tables and Shewhart’s control charts were developed with this fact in mind.

After availability of computers, software began to be developed for statistical calculations and SQC applications. However, much of the training materials and textbooks that have been developed since the 1980 comeback of SQC in U.S. industry still illustrates the techniques that can easily be implemented with hand calculations. However, this workbook will emphasize the use of the computer for SQC calculations.

Popular commercial software used in industry includes programs such as SynergySPC and SQCpack that can share data and reports between different computers. Others like SAS, Minitab 18, or StatGraphics Centurion combine SQC calculations with data manipulation features and a full suite of statistical analysis tools.

This workbook will illustrate the use of R, since it is a free programming language and environment for statistical computing. R was developed by Ross Ihaka and Robert Gentleman at the University of Auckland, New Zealand. It implements the S programming language that was developed at Bell Labs by John Chambers in 1976. R is highly extendible through functions and extensions. There are many user written packages for statistical quality control functions that are available on the Comprehensive Archive Network (CRAN).


Christensen, C., K.M. Betz, and M.S. Stein. 2013. The Certified Quality Process Analyst Handbook. 2nd ed. Milwaukee, Wisconsin: ASQ Quality Press.

Dodge, H.F., and H.G. Romig. 1941. “Single and Double Sampling Inspection Tables.” Bell System Technical Journal 20 (1): 1–61.

Freeman, H. F. 1937. “Statistical Methods for Quality Control.” Mechanical Engineering, 261.

Shewhart, W.A. 1931. Economic Control of Quality of Manufactured Product. New York: D. Van Nostrand.