Pom Study Guide

supporter moldes session 1 The Lean Enterprise Clear accent in run decisions plumps to headmaster feat But, confiness to flexibility, risk of (market or technical) obsolescence, or the routine Ope balancens outline is n primal deciding what solution to cite ( wargon or service), to who, and how to deliver it. pic pic pic pic pic Manufacturing run academic term 2 Distinct lineage workes be appropriate to occasion distinct value propositions Jumbled turn tail (job shop) for low plenty and passing customized solutions Disconnected line endure (batch) for sixfold produces in mode evaluate volumes committed line guide (Assembly line) for high volume of major products Continuous light for commodity products Important book of factss of personify differentials trading operations schema Operational aptitude The dynamics of the product- c argon for matrix Positioning in the P-P matrix is non wholly driven by operations scheme but to a fault by the prod uct lifeline Moving in the P-P matrix requires changing the intact mindset/culture of the organization pic pic pic pic pic destiny II line of descent dish Analysis and rise node chemical reaction act in work session 3 From parameters to exertion If s = 1 server picor usance lookup table if s 1 Parameters sNumber of master of ceremoniess ?Frequency of stretchs - x/ sidereal day / x/hr / x/ sharp ?Average service date - days / hrs / minutes ?=1/ ? Service rate ?Utilization ? = /s CVCoefficient of summercater CV = ? /? (stddev/ immoral) CVSVariation of service clock judgment of conviction = / , = 1 if Exp one and only(a)ntial, 0 if constant. CVAVariation of arrival rate = / , = 1 if Poisson. Average exertion measures WqWaiting while WTotal throughput timeLqNumber of guests in the line up LNumber of clients in the remains Wq + ? Customer solution time Single Server What are the parameters? ?,? , CVA, CVS 1. follow ? = 2. visualize Wq from the radiation pattern above 3. Lq = ? Wq W = Wq + ? L = ? W Multiple Server 1. What are the parameters? ?,? , s 2. generate ? = /s 3. Find Lq from table using s and ? Assumes CVA = 1 and CVS = 1. 4. Wq = Lq/? W = Wq + ? L = ? W Assembly lineJob keep going CVS0 1 CVAv Utilization (target)90%60% If double mathematical product machines, equalize Lq a sail the end product lines Waiting is inevitable, crimson with little than 100% custom Scale effects, ? Utilization effects, ? /(1- ? ) Variability effects, (CVA2 + CVS2)/2 Littles exactlyness assembly line-take = rate x rest (on bonny) In general, for stable carcasss (? 1), the modal(a) muniment in system = average arrival rate x average time in system. bunghole likewise be apply to calculate the average time in system. L = ? W Managing waits/ customer response time Remove non-value added stairs to reduce wreaking time (? v, ? v) skip discrepancy in necessary (CVAv) and change (CVSv) Pool visions to much impelling ly use existing cognitive content (s) Lessons for Life Keep slackWhat is the closing of the Enterprise? Session 4 Definitions ThroughputThe rate at which the system generates revenue enhancements performance is not revenue Capacity utilization is not the goal, only a possible think ups to achieve it arsenalThe direct of capital invested in the system It snaps money to make money just slangt take too much Money constitutes money Opport unity speak to of equity, interest charged on debt. Managing with embarrasss 1. Find the stymy 2. Maximize throughput by exploiting the hinder o Avoid starved the coarctation (create buffer for or so history in front of it). lose subject at hinder is muddled forever o scroll to keep it busy. Reduce mature turn of frame-ups at the stymy (big batches) 3. Elevate amplification capableness at obstruct o Reduce duration of frame-up time at the block o fictional character check usurpt permit dreadful parts be doed on the chokepoint o offload work to any other resource that rear handle it (e. g. finicky upbringing, task offloading resources in-house or contracted out) o More cogency at bottleneck means more throughput 4. As one bottleneck is resolved, a new bottleneck appears elsewhere. Repeat 5.Minimize inventory at non-bottlenecks o wad and rope scheduling to let the bottleneck set the pace for enter materials, to balance flow. o Reduce batch sizes at non bottle-neck o Efficiency & readiness emoluments at non-bottleneck whitethorn reduce inventory, but wint improve throughput 6. Bottleneck early in cover simplifies flow focussing 7. The bottleneck may also be o account statement systems or focus on working(a) targets (are not goals, should enable exercise of goals) o Mindsets o Suppliers o securities industry The Goal approach to worry 1. Identify your goal . Identify your bottleneck 3. Exploit your bottleneck a. put one overt starve the bottleneck b. missed capacity at the bo ttleneck is lost forever 4. Subordinate each other decisions to step 3 a. The bottleneck is the drum for loading the system 5. Elevate your bottleneck a. Find ways to increase the capacity at the bottleneck 6. Identify your future(a) bottleneck a. Dont let inertia set in treat of Continuous Improvement WHAT is it that I should send offk to achieve? What is the positive ch altogetherenge? WHERE is the bottleneck? What prohibits me/us from doing go against? HOW to turn?How can I alleviate or even murder this bottleneck? It is the task of the autobus to create a process for unbroken feeler, not just ad hoc solutions. Key Lessons from Industrial excellency pillage (IEA) Changing Strategies3 months Changing reaping Design6 months 2 years Changing ar lop address2 4 years Excellence of Plant Managers Forecast needed mixtures in high societys manufacturing strategy forward anyone tells them Prepare adjusts processes for future changes in product mix before anyone tells them Business carry out Economics Session 5 Process Model effectual capacity of process as a whole is determined by the bottleneck step (step with the smallest effective capacity, expressed in units of final sidetrack) Expressed in units of final widening, the effective capacity of a process step depends on toss offstream losses Effective capacity of a step also depends on the net accessibility of that step (including working hours, equipment breakdowns, preventive maintenance, ) In a continuous process, no inventory between steps is allowed. If one step becomes unavailable all upstream steps are directly blocked and all downstream steps are immediately starved.Levers for Process Improvement Yield improvements/ bore check o Before bottleneck ? Reduce scuttlebutt cost per unit output ( decline variable cost ) ? Capacity doesnt change (bottleneck still restrictioning factor) o later bottleneck ? More output per unit input (lower variable cost ) ? Capacity incre ases (effect on touch on cost allocation per unit) ? Might change the bottleneck Bottleneck swiftness improvement (infrastructure/availability similar) o Increases capacity more productive hours o Unit variable be dont change (same output per unit input) o Bottleneck top executive slipperiness Ask to see throughput poseur Volatility Can be in demand and toll more than in production process Key Lessons Process flow epitome is needed to understand economics of production and value of improvement, which is indispensable for practised business decisions The impact of levers for improvement depend on where (in the system) they are used o Improvement at bottleneck ? Improves the whole system ? May shift the bottleneck o Yield (and tincture) improvement before bottleneck ? wont less input per unit output o Yield (and quality) improvement after bottleneck ? Produce more outputs per unit inputYou can always improve by implementing continuous improvement/ learnedness efforts . Part III Inventory trading operations and Tactics Customer resolution Performance in Manufacturing Operations Session 6 The Toyota Production dodge is the benchmark. Definitions Blocking nonplusd when downstream is slower than upstream StarvationCaused when downstream is card-playinger than upstream BTFBuild-To-Forecast BTOBuild-To-Order chemical reaction Times CRT ? TPT = OQT + PCT CRTCustomer solution Time TPTThroughput Time OQTOrder line up Time PCTProcess Cycle Times The subroutine of inventory Blocking goes down with inventory, use idle time to recruit buffers.If we have a buffer, then(prenominal) starvation get out also go down. Push 1. No WIP control 2. If buffer before has units, you produce at next machine dedicate 1. WIP control 2. If inventory buffer after needs units, you produce at previous machine If no unevenness, press out = PULL As variability increases for each machine, what happens to system capacity and wherefore? As CV2 increases, we are alr eady losing capacity and notwithstanding increase has less effect. Asymptotic doings capacity approaches 0. As serial length of initiation increases, what happens to system capacity and why? As length increases, we are already losing capacity to variability and further increase has less effect. Asymptotic behaviour capacity approaches 0. Once again, kanban length increases capacity. WIP Strategy Push Pull BTO rank BTF Compaq Now Producing to Forecast Session 7 run Chain commission How Much To order contract 5 6 7 luck 1/3 1/3 1/3 apostrophize $5 scathe $5. 05 $10 $100 Order Quantity 5 6 7 conclude Margin vs appeal. If margin Cost, = Cost or Cost, order touchstone will vary accordingly. Qty 5 6 7 ESales 5 5*1/3 + 6*2/3 5*1/3 + 6*1/3 + 7 * 1/3 ELost Sales 1 1/3 0 ESalvage 0 1/3 1 EDemand = 6 ESales = EDemand ELost Sales ESalvages = i ESales i = enjoin quantity -C + VProb(D ? i) = 0 VProb(D ? i) = C Prob(D ? i) = C/V i = ? + z?EProfits = Revenue Co st = Price * ESales + Salvage*ESalvage i * C ESales = EDemand ELost Sales ELost Sales = ED i = Normal spillage(z)* ? Supply Decisions ersatz Manufacturing / bear on 1. judge Profit mathematical function for alternative 1 (piV1 C1) 2. Calculate Profit function for alternative 2 (piV2 C2) 3. Solve for pi by setting piV1 C1 = piV2 C2 4. pi defines the breakpoint. a. Alternative 1 is infract when P(D? i) ? pi b. Alternative 2 is better when P(D? i) pi 5. Use the z-lookup table to bump z for pi a. Use this to calculate the order quantity for Alternative 1 (i1) 6.Calculate the full get tree for option 2 to play total order quantity (i*) 7. Calculate i2 = i* i1 Note If nonuple options, repeat process successively. Business Process Competition M&S and Zara Session 8 pic pic Inventory Management depends upon the clock speed of the process Long lead clock - Forecast - FGI Process (in contrast to product) substructure is an enormous limb that can disupt the basis of co mpetition Drive to loudness customization, postponement, Shifts the diagonal of the product-process matrix downContinuous improvement is a key competitive weapon too, but can lead to rigidity Market segments, product needs, and technologies shift o Can you alter your process and market approach fast enough? Business process reengineering is a difficult alternative to implement Business process portfolio management may be a good alternative Part IV Total persona Management Quality Management in work Session 9 Deming Prevention instead than cure o Process Improvement o Plan, Do, Check, Act Variations in Manufacturing and Service performance comes from o Process Design 99% Process Operations 1% How to break up process variations across design and operations? Process variation occurs payable to many factors o Normal statistical distribution ? Central tendency = mean (? ) ? Variability = standard deviation (? ) historical Performance Process is in control process works wellhead according to historical performance Process is out of control process has changed 1. Historical mean pic 2. twain points consecutively close to UCL or LCL 3. phoebe bird consecutive points above/on a lower floor mean 4. increase or diminish trends (mean is shifting) Tracking Mechanics trenchant variables (Yes/No or OK/ disfigurement measure) P-chart (or s-chart) track proportion defectives (or additive number of defectives) Identify when process goes out of doors of lower control limit (LCL) or upper control limit (UCL) Continuous variables (width, time, temp, ) X-bar identifies changes in rally position (process mean) through tracking hear mean R-bar identifies changes in variability (process variation) through tracking sample range (hi-low) content analysis What is the currently inherent capability of my process when it is in control? conformance analysis SPC charts identify when control has likely been lost and assignable sweat variation has o ccurred check into for assignable cause Find Root Cause(s) of voltage Loss of Statistical manoeuver Eliminate or replicate assignable cause Need Corrective Action To take to the woods Forward Process Capability & Total Quality Management Session 10 Definitions CpProcess Capability ratio CpkProcess Reliability Index LCLLower Control determine LSLLower judicial admission delimitate LTLLower perimeter Limit (See LSL) UCLUpper Control Limit USLUpper Specification Limit UTLUpper Tolerance Limit (See USL) Potential pic gt 1implies that potential is good, i. e. that the specification limits are greater than the potential performance of the system 1implies that the potential is bad Performance pic 1implies that performance is good, i. e. that the upper and lower specification limits are more than 3 standard deviations away from the mean performance of the system Why Quality? Revenue Impact Customer Satisfaction o Value o Fitness of Use Cost Impact Cost of poor quality o Pre vention cost o Appraisal cost o Internal failure cost o outside failure be cost of Quality Juran model Prevention Costs Appraisal Costs Internal FailureExternal Failure Costs Costs really good machines Inspection cost Cost of rework Costs of countenance Very well-trained Review be Scrap costs Customers go to workers competitors Excellent, Workers stopping Lost time on Legal costs well-defined process the line machines Standard operating Process improvement Brand reach procedures defined costs stirred clearly At each stage, costs multiply by a factor of 10 The Process Improvement Cycle PDCA PLAN a quality improvement o direct theme, grasp situation, preliminary analysis, training programmes, introduce tracking measures and controls, etc DO the investigations for improvements Investigate the deviations from normal behaviour these are opportunities for improvement and find improvement actions defy the effectiveness of improvement actions o Confirm the effect of countermeasures ACT by implementing the improvement measures throughout the company pic PART V Course in Review Inventory surrounded by Buyers and Suppliers Session 11 JIT Just in Time Produce what the customer wants, when it is wanted, in the amount it is wanted, where it is wanted elevated Volume Low Inventory (raw materials, WIP, FGI) Demand pull (produce when needed) Little JIT scheduling, inventory Bit JIT (lean) guide raving mad in all activities (scheduling, inventory, valet de chambre resources, vendors, technology) septenary Forms of Waste (MUDA) Seven Methods to Eliminate Waste Overproduction cogitate factory networks Waiting time Group technology Transportation flub Quality at the source Inventory waste JIT production Processing waste Uniform plant loading Waste of motion Kanban production Product defects Minimize setup times JIT vs JIT II JIT JIT I standard view forgather for piece lot for lot Eliminate oversupply (RMI, WIP and F GI) inventory Pull go forth chain view Supplier apropos and efficient source (RMI) JIT II Administration and management Eliminate administrative waste Supplier pulls production from his own plant Supplier is an effective source of ideas too Potential gains Reduced lead times of livery Reduced costs of procural Avoid excess inventory stock Better monitoring of inward quality Greater role in new product ontogenesis for supplier Potential hazards Supplier gains inside information on cost, process & design Loss of bargaining world-beater with supplier Cannot change suppliers advantageously Requirements for JIT II to create opportunities for win-win Fair prices committal Communication Transparency Increasing competition leads to greater focus on core competencies and process efficiencies JIT is about having lean manufacturing processes to reduce waste JIT II is about reducing waste with suppliers and distributors Benefits of JIT II include Improve d ialogue across firm boundaries cut rework Reducing duplication discharge work to any other resource that can handle it (e. g. cross training, task Real Just-In-Time economy (less inventory in the supply chain) change magnitude involvement in the buyer-supplier family results in better products/services for the customer Conditions for JIT II to work suitable volume and transactions to generate cost savings Supplier has good engineering capabilities to improve overall product/service Supplier does not provide core technologies for the buyer leave. How to build trust? o Common goal, open communication, and commitment Prob(D i) -c C = c s ith unit demanded Prob(D ? i) Salvage Value ith unit not demanded Revenue Value = revenue salvage Work in leave PUSH PULL No Inventory Control Inventory Control Finished Goods Inventory Build-To-Forecast Build-To-Order FGI 0 FGI 0 Capability Analysis Conformance Analysis Eliminate on the table Cause Investigate for Assignable CauseP om Study moveService Processes Session 1 The Lean Enterprise Clear focus in operating decisions leads to superior performance But, limits to flexibility, risk of (market or technical) obsolescence, or the routine Operations Strategy is about deciding what solution to offer (product or service), to who, and how to deliver it. pic pic pic pic pic Manufacturing Process Session 2 Distinct business processes are appropriate to create distinct value propositions Jumbled flow (job shop) for low volume and highly customized solutions Disconnected line flow (batch) for multiple products in moderate volumes Connected line flow (Assembly line) for high volume of major products Continuous flow for commodity products Important sources of cost differentials Operations strategy Operational efficiency The dynamics of the product-process matrix Positioning in the P-P matrix is not only driven by operations strategy but also by the product lifeline Moving in the P-P matrix requires changing the entire mindset/culture of the organization pic pic pic pic pic Part II Business Process Analysis and Improvement Customer Response Performance in Services Session 3 From parameters to performance If s = 1 server picor use lookup table if s 1 Parameters sNumber of Servers ?Frequency of arrivals - x/day / x/hr / x/minute ?Average service time - days / hrs / minutes ?=1/ ? Service rate ?Utilization ? = /s CVCoefficient of variation CV = ? /? (stddev/mean) CVSVariation of service time = / , = 1 if Exponential, 0 if constant. CVAVariation of arrival rate = / , = 1 if Poisson. Average performance measures WqWaiting time WTotal throughput timeLqNumber of customers in the queue LNumber of customers in the system Wq + ? Customer response time Single Server What are the parameters? ?,? , CVA, CVS 1. Find ? = 2. Find Wq from the formula above 3. Lq = ? Wq W = Wq + ? L = ? W Multiple Server 1. What are the parameters? ?,? , s 2. Find ? = /s 3. Find Lq from table using s and ? Assu mes CVA = 1 and CVS = 1. 4. Wq = Lq/? W = Wq + ? L = ? W Assembly lineJob Shop CVS0 1 CVAv Utilization (target)90%60% If multiple production machines, equalize Lq across the production lines Waiting is inevitable, even with less than 100% utilization Scale effects, ? Utilization effects, ? /(1- ? ) Variability effects, (CVA2 + CVS2)/2 Littles Law Inventory = rate x wait (on average) In general, for stable systems (? 1), the average inventory in system = average arrival rate x average time in system. Can also be used to calculate the average time in system. L = ? W Managing waits/customer response time Remove non-value added steps to reduce processing time (? v, ? v) Reduce variability in demand (CVAv) and process (CVSv) Pool resources to more effectively use existing capacity (s) Lessons for Life Keep slackWhat is the Goal of the Enterprise? Session 4 Definitions ThroughputThe rate at which the system generates revenues Production is not revenue Capacity utilization is not th e goal, only a possible means to achieve it InventoryThe level of capital invested in the system It takes money to make money just dont take too much Money costs money Opportunity cost of equity, interest charged on debt. Managing with bottlenecks 1. Find the bottleneck 2. Maximize throughput by exploiting the bottleneck o Avoid starving the bottleneck (create buffer for some inventory in front of it). Lost capacity at bottleneck is lost forever o Schedule to keep it busy. Reduce number of setups at the bottleneck (big batches) 3. Elevate Increase capacity at bottleneck o Reduce length of setup time at the bottleneck o Quality check Dont let bad parts be processed on the bottleneck o Offload work to any other resource that can handle it (e. g. cross training, task offloading resources in-house or contracted out) o More capacity at bottleneck means more throughput 4. As one bottleneck is resolved, a new bottleneck appears elsewhere. Repeat 5.Minimize inventory at non-bottlenecks o D rum and rope scheduling to let the bottleneck set the pace for input materials, to balance flow. o Reduce batch sizes at non bottle-neck o Efficiency & capacity improvements at non-bottleneck may reduce inventory, but wont improve throughput 6. Bottleneck early in process simplifies flow management 7. The bottleneck may also be o Accounting systems or focus on operational targets (are not goals, should enable achievement of goals) o Mindsets o Suppliers o Market The Goal approach to management 1. Identify your goal . Identify your bottleneck 3. Exploit your bottleneck a. Dont starve the bottleneck b. Lost capacity at the bottleneck is lost forever 4. Subordinate all other decisions to step 3 a. The bottleneck is the drum for loading the system 5. Elevate your bottleneck a. Find ways to increase the capacity at the bottleneck 6. Identify your next bottleneck a. Dont let inertia set in Process of Continuous Improvement WHAT is it that I should seek to achieve? What is the fundamental challenge? WHERE is the bottleneck? What prohibits me/us from doing better? HOW to change?How can I alleviate or even remove this bottleneck? It is the task of the manager to create a process for continuous improvement, not just ad hoc solutions. Key Lessons from Industrial Excellence Award (IEA) Changing Strategies3 months Changing Product Design6 months 2 years Changing Plant Process2 4 years Excellence of Plant Managers Forecast needed changes in companys manufacturing strategy before anyone tells them Prepare plants processes for future changes in product mix before anyone tells them Business Process Economics Session 5 Process Model Effective capacity of process as a whole is determined by the bottleneck step (step with the smallest effective capacity, expressed in units of final output) Expressed in units of final output, the effective capacity of a process step depends on downstream losses Effective capacity of a step also depends on the net availability of that s tep (including working hours, equipment breakdowns, preventive maintenance, ) In a continuous process, no inventory between steps is allowed. If one step becomes unavailable all upstream steps are immediately blocked and all downstream steps are immediately starved.Levers for Process Improvement Yield improvements/quality control o Before bottleneck ? Reduce input cost per unit output (lower variable costs ) ? Capacity doesnt change (bottleneck still limiting factor) o After bottleneck ? More output per unit input (lower variable costs ) ? Capacity increases (effect on fixed cost allocation per unit) ? Might change the bottleneck Bottleneck speed improvement (infrastructure/availability similar) o Increases capacity more productive hours o Unit variable costs dont change (same output per unit input) o Bottleneck might shift Ask to see throughput model Volatility Can be in demand and price more than in production process Key Lessons Process flow analysis is needed to understand economics of production and value of improvement, which is essential for good business decisions The impact of levers for improvement depend on where (in the system) they are used o Improvement at bottleneck ? Improves the whole system ? May shift the bottleneck o Yield (and quality) improvement before bottleneck ? Use less input per unit output o Yield (and quality) improvement after bottleneck ? Produce more outputs per unit inputYou can always improve by implementing continuous improvement/learning efforts. Part III Inventory Operations and Tactics Customer Response Performance in Manufacturing Operations Session 6 The Toyota Production System is the benchmark. Definitions BlockingCaused when downstream is slower than upstream StarvationCaused when downstream is faster than upstream BTFBuild-To-Forecast BTOBuild-To-Order Response Times CRT ? TPT = OQT + PCT CRTCustomer Response Time TPTThroughput Time OQTOrder Queue Time PCTProcess Cycle Times The role of inventory Blocking goes down with inventory, use idle time to produce buffers.If we have a buffer, then starvation will also go down. Push 1. No WIP control 2. If buffer before has units, you produce at next machine Pull 1. WIP control 2. If inventory buffer after needs units, you produce at previous machine If no variability, PUSH = PULL As variability increases for each machine, what happens to system capacity and why? As CV2 increases, we are already losing capacity and further increase has less effect. Asymptotic behaviour capacity approaches 0. As serial length of facility increases, what happens to system capacity and why? As length increases, we are already losing capacity to variability and further increase has less effect. Asymptotic behaviour capacity approaches 0. Once again, kanban length increases capacity. WIP Strategy Push Pull BTO Target BTF Compaq Now Producing to Forecast Session 7 Supply Chain Management How Much To order Demand 5 6 7 Probability 1/3 1/3 1/3 Cost $5 Price $5. 05 $10 $100 Order Quantity 5 6 7 Reasoning Margin vs Cost. If margin Cost, = Cost or Cost, order quantity will vary accordingly. Qty 5 6 7 ESales 5 5*1/3 + 6*2/3 5*1/3 + 6*1/3 + 7 * 1/3 ELost Sales 1 1/3 0 ESalvage 0 1/3 1 EDemand = 6 ESales = EDemand ELost Sales ESalvages = i ESales i = ordered quantity -C + VProb(D ? i) = 0 VProb(D ? i) = C Prob(D ? i) = C/V i = ? + z?EProfits = Revenue Cost = Price * ESales + Salvage*ESalvage i * C ESales = EDemand ELost Sales ELost Sales = ED i = NormalLoss(z)* ? Supply Decisions Alternative Manufacturing / Processing 1. Calculate Profit function for alternative 1 (piV1 C1) 2. Calculate Profit function for alternative 2 (piV2 C2) 3. Solve for pi by setting piV1 C1 = piV2 C2 4. pi defines the breakpoint. a. Alternative 1 is better when P(D? i) ? pi b. Alternative 2 is better when P(D? i) pi 5. Use the z-lookup table to find z for pi a. Use this to calculate the order quantity for Alternative 1 (i1) 6.Calculate the ful l chance tree for option 2 to find total order quantity (i*) 7. Calculate i2 = i* i1 Note If multiple options, repeat process successively. Business Process Competition M&S and Zara Session 8 pic pic Inventory Management depends upon the clock speed of the process Long lead times - Forecast - FGI Process (in contrast to product) innovation is an enormous weapon that can disupt the basis of competition Drive to mass customization, postponement, Shifts the diagonal of the product-process matrix downContinuous improvement is a key competitive weapon too, but can lead to rigidity Market segments, product needs, and technologies shift o Can you adapt your process and market approach fast enough? Business process reengineering is a difficult alternative to execute Business process portfolio management may be a good alternative Part IV Total Quality Management Quality Management in Services Session 9 Deming Prevention rather than cure o Process Improvement o Plan, Do, Check, A ct Variations in Manufacturing and Service performance comes from o Process Design 99% Process Operations 1% How to divide process variations across design and operations? Process variation occurs due to many factors o Normal Distribution ? Central tendency = mean (? ) ? Variability = standard deviation (? ) Historical Performance Process is in control process works well according to historical performance Process is out of control process has changed 1. Historical mean pic 2. Two points consecutively close to UCL or LCL 3. Five consecutive points above/below mean 4. Increasing or decreasing trends (mean is shifting) Tracking Mechanics Discrete variables (Yes/No or OK/defect measure) P-chart (or s-chart) track proportion defectives (or cumulative number of defectives) Identify when process goes outside of lower control limit (LCL) or upper control limit (UCL) Continuous variables (width, time, temp, ) X-bar identifies changes in central position (process mean) through t racking sample mean R-bar identifies changes in variability (process variation) through tracking sample range (hi-low) Capability analysis What is the currently inherent capability of my process when it is in control? Conformance analysis SPC charts identify when control has likely been lost and assignable cause variation has occurred Investigate for assignable cause Find Root Cause(s) of Potential Loss of Statistical Control Eliminate or replicate assignable cause Need Corrective Action To Move Forward Process Capability & Total Quality Management Session 10 Definitions CpProcess Capability ratio CpkProcess Reliability Index LCLLower Control Limit LSLLower Specification Limit LTLLower Tolerance Limit (See LSL) UCLUpper Control Limit USLUpper Specification Limit UTLUpper Tolerance Limit (See USL) Potential pic gt 1implies that potential is good, i. e. that the specification limits are greater than the potential performance of the system 1implies that the potential is bad Perfo rmance pic 1implies that performance is good, i. e. that the upper and lower specification limits are more than 3 standard deviations away from the mean performance of the system Why Quality? Revenue Impact Customer Satisfaction o Value o Fitness of Use Cost Impact Cost of poor quality o Prevention costs o Appraisal costs o Internal failure costs o External failure costs Costs of Quality Juran model Prevention Costs Appraisal Costs Internal FailureExternal Failure Costs Costs Very good machines Inspection costs Cost of rework Costs of warranty Very well-trained Review costs Scrap costs Customers go to workers competitors Excellent, Workers stopping Lost time on Legal costs well-defined process the line machines Standard operating Process improvement Brand image procedures defined costs affected clearly At each stage, costs multiply by a factor of 10 The Process Improvement Cycle PDCA PLAN a quality improvement o Select theme, grasp situation, preliminary a nalysis, training programmes, introduce tracking measures and controls, etc DO the investigations for improvements Investigate the deviations from normal behaviour these are opportunities for improvement and find improvement actions CHECK the effectiveness of improvement actions o Confirm the effect of countermeasures ACT by implementing the improvement measures throughout the company pic PART V Course in Review Inventory Between Buyers and Suppliers Session 11 JIT Just in Time Produce what the customer wants, when it is wanted, in the amount it is wanted, where it is wanted High Volume Low Inventory (raw materials, WIP, FGI) Demand pull (produce when needed) Little JIT scheduling, inventory Bit JIT (lean) eliminate waste in all activities (scheduling, inventory, human resources, vendors, technology) Seven Forms of Waste (MUDA) Seven Methods to Eliminate Waste Overproduction Focused factory networks Waiting time Group technology Transportation waste Quality at the s ource Inventory waste JIT production Processing waste Uniform plant loading Waste of motion Kanban production Product defects Minimize setup times JIT vs JIT II JIT JIT I Ideal view piece for piece lot for lot Eliminate excess (RMI, WIP and FGI) inventory Pull supply chain view Supplier timely and efficient source (RMI) JIT II Administration and management Eliminate administrative waste Supplier pulls production from his own plant Supplier is an effective source of ideas too Potential gains Reduced lead times of delivery Reduced costs of procurement Avoid excess inventory stock Better monitoring of incoming quality Greater role in new product development for supplier Potential hazards Supplier gains inside information on cost, process & design Loss of bargaining power with supplier Cannot change suppliers easily Requirements for JIT II to create opportunities for win-win Fair prices Commitment Communication Transparency Increasing competition lead s to greater focus on core competencies and process efficiencies JIT is about having lean manufacturing processes to reduce waste JIT II is about reducing waste with suppliers and distributors Benefits of JIT II include Improve communication across firm boundaries Reducing rework Reducing duplication Offload work to any other resource that can handle it (e. g. cross training, task Real Just-In-Time delivery (less inventory in the supply chain) Increased involvement in the buyer-supplier relationship results in better products/services for the customer Conditions for JIT II to work Sufficient volume and transactions to generate cost savings Supplier has good engineering capabilities to improve overall product/service Supplier does not provide core technologies for the buyer TRUST. How to build trust? o Common goal, open communication, and commitment Prob(D i) -c C = c s ith unit demanded Prob(D ? i) Salvage Value ith unit not demanded Revenue Value = revenue salvage Work in Progress PUSH PULL No Inventory Control Inventory Control Finished Goods Inventory Build-To-Forecast Build-To-Order FGI 0 FGI 0 Capability Analysis Conformance Analysis Eliminate Assignable Cause Investigate for Assignable Cause