Robust process capability indices

Many organizations are mandating the use of process capability indices to measure and reduce variability. Managers may find the use of such indices as unreliable when the interaction of the dependency structure and outliers mask potential assignable causes of variation. A monitoring procedure is proposed that effectively classifies a series' variability into three components: (1) the underlying correlation structure, (2) the outliers, and (3) the unexplained variance. Indices are proposed to distinguish these components. This approach can help a manager identify the appropriate corrective actions to be taken to reduce variability. (C) 1998 Elsevier Science Ltd. All rights reserved.