Process Capability: Definition & Elements

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  • 0:00 Customer Demands
  • 0:45 Process Capability
  • 2:00 Elements
  • 4:04 Lesson Summary
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Lesson Transcript
Instructor: Natalie Boyd

Natalie is a teacher and holds an MA in English Education and is in progress on her PhD in psychology.

Companies want to know that they are making a product that will meet their customers' expectations. But how can they do that? In this lesson, we'll examine process capability, including what it is and the elements that contribute to it.

Customer Demands

Harry runs a factory that makes cell phones. His customers expect certain things from Harry's cell phones. They want the phones to be simple to use, have a long battery life and be reliable. Customers always want certain things from the products they buy. For example, Harry's customers want a cell phone that never drops calls, though they'll settle for one that only rarely drops calls. How can Harry make sure that he's meeting his customers' expectations? Process capability is one way that companies can make sure that they're making products that meet customer demands. To help Harry understand how to use process capability, let's look closer at what it is and the elements that are used to calculate it.

Process Capability

Harry wants to make sure that his company's cell phones meet his customers' expectations. Specifically, he knows that he can't make every single cell phone perfect, but wants to make sure that on the whole, his cell phones aren't dropping so many calls that his customers go to a different brand. Since Harry runs the factory, he's particularly interested in the way the process of manufacturing can meet his customer expectations.

Process capability is the ability of a company to produce a product that meets the customers' demands. Let's say that Harry has the option of two different manufacturing processes in his factory. Process 1 makes a cell phone that will automatically drop every 30th phone call. That's about 3% of phone calls dropped. Instead of process 1, Harry could use process 2, which makes phones that randomly drop between 2% and 4% of calls. Which process can meet Harry's customers' demands? Possibly both, but to know for sure, Harry will need to do a statistical analysis. That leads us to another important point about process capability. It is a statistical analysis of whether the process used by a company is capable of meeting the customers' demands.

Elements

If you've been paying attention, you already know that process capability is about using statistics to analyze how effective the company's processes are. But what elements go into the statistical analysis? To calculate process capability, Harry will need certain information. Specifically, he'll need to important pieces of information. First, he'll need the customer tolerance range, which is the minimum and maximum a customer will put up with. For example, perhaps Harry's customers are willing to put up with a phone that drops 1% and 3% of calls, but no more. Then 1% to 3% is the customer tolerance range.

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