Intro to Operaons/Supply Chain Quality of Conformance (QOC) – degree to which the product or service Goal of SPC – to dierenate between

f SPC – to dierenate between random and assignable 4) Specicaons are greater than natural variaon, but
OM - The design, operaon, and improvement of manufacturing and is produced according to its design. This depends on design of producon variaon and random causes process is o centre; capable but some output will not
service systems to ensure that consumers can get what they want, where process, performance level of machinery, equipment, technology, Assignable Causes – special causes that are idenable and meet specicaon.
they want it, and at a price they are willing to pay – ops is transformaon materials, employee training and supervision, and stascal quality correctable; Process Capability Rao
processes that create and deliver rm’s products control techniques (employer perspecve) Random Causes – inherent in a process and are natural to
Transformaon process types: physical (manufacturing), locaonal Total Quality Management – Involves everyone in the organizaon in the happen CP
(transportaon), exchange (retailing), storage (warehousing), management and connual improvement of quality and customer Aributes Charts If CP > = 1, process range is less than or equal to design
physiological (health care), informaonal (telecommunicaons) sasfacon – CI, data, employee empowerment, team approach, supplier Aribute: quality characterisc with discrete response range, process is capable of meeng specs
Characteriscs of goods: tangible, producon/= consumpon, partnership, fail-safeing P-Chart If CP < 1, process range is greater than design range,
inventoried, low customer interacon QMS: system to achieve customer sasfacon that complements other Proporon of defecve items in each sample process is not capable of meeng specs
Characteriscs of services: intangible, produce=consume, no inventory, company systems
Use if process is centered
high customer interacon Sased customers are less likely to switch to a competor
Process Capability Index
Decision Making: strategy(design): medium to long-term, $$$ & Employee Empowerment is crical for quality improvement
operaonal (taccal): day-to-day decisions z = standard deviaons from the process average
Parcipave Problem solving – employees are directly involved
Supply Chain Management - Management of the ow of informaon, p ̅ = sample proporon defecve (esmate of process average)
Kaizen – involves everyone in process of CI
Op = standard deviaon of sample proporon CPK
people, materials, products, and services across a network of customers, Quality Tools
Cpk > 1, process is capable of meeng design specs
enterprises, and supply chain partners Process Flow Chart: diagram of steps in the process
Cpk = 1, process is centred on the design target
Why Go Global – Favourable cost, Access to markets, response to change Cause and Eect Diagram (shbone) – graph causes of quality
Cpk < 1, process has shied toward upper or lower design
in demand, source of supply, trends Check Sheet – tallying number of defects
spec, whichever is the minimum
Scienc management: systemac analysis of work methods quality Histogram – diagram showing frequency of data C-Chart Use when process is not centered
revoluon: emphasis on quality & strategic role of ops lean producon: Pareto Analysis – tallying the % of defects by problem type Use when not possible to count proporons of defecve items, Product and Service Design
adaptaon of mass producon, prizes quality & exibility Scaer Diagram -relaonship between variables so a count is used, number of defects per unit Eecve design can provide a compeve edge
Producvity, Compeveness and Strategy Stascal Process Control Chart – upper and lower limits and used at
match product (or service) characteriscs with customer
Compeveness – degree to which a rm can produce goods and CRITICAL POINTS in the process, or points that normally go out of
requirements, ensure that customer requirements are met
services that meet the needs of markets while simultaneously control/costly if it does
z = number of standard deviaons from the process average in the simplest and least costly manner, reduce me
maintaining or expanding its net income Quality Circles – voluntary group of workers who address quality
C ̅ = mean number of defects per item required to design a new product or service, minimize
Producvity - measurement of compeveness and how well resources problems
Oc = sample standard deviaon, Oc = √ (C ̅) revisions necessary to make a design workable
are ulized to maintain a certain level of output Benets of Quality
Variable Charts Design Process: Idea Generaon (perceptual maps,
Single Factor Producvity – Output/labour Higher Protability from Improved product quality and in turn premium
Variable: Quality charac. that is connuous and measurable benchmarking, reverse engineering), Feasibility Study
Mul-Factor Producvity – Output/Labour + Materials + Overhead process or lower manufacturing/warranty expenses
Mean (market, economic, tech/strategy, performance),
Total Factor: goods & services produced/all inputs used to produce them Costs of Quality
When Sigma is Known – indicates how sample mean relates to Prototyping (form design = how product looks, funconal
Factors Aecng Producvity – methods and management, equipment Prevenon Costs: incurred in product design including planning, product
process average or mean design = how product performs, producon design = how
and technology, labour force design, process, training, and informaon costs
product will be made – simplicaon, standardizaon,
Strategy - Provides direcon for achieving the company’s mission Appraisal(monitoring) Costs: Measuring, tesng, and analysing including
modular, design for manufacture), nal design & process
Mission Statement – concise view of what company does and sells and inspecon and tesng, test equipment and operator costs
plans
the marketplace it operates in Internal Failure: discovered before delivery including scrap, rework, Ox ̅ = standard deviaon of the distribuon of sample Design denes appearance, sets standards, materials,
Vision – direcon to take the company (5 to 10 years) downme, and price reducons means (Ox ̅ = O/√n) dimensions and tolerances
Values – common beliefs that individuals share within the company External Failure: Discovered aer delivery including complaints, returns, O = process standard deviaon Reliability - probability that a product will perform its
Strategy formulaon warranty, liability n= sample size intended funcon for a specied period of me under
Dene Primary Task: purpose of rm/what they do Doing things wrong costs 20-30% of revenues while doing something k= number of samples normal condions of use
Assess core competencies: what rm does beer than anyone else right is only 3-4% z= number of standard deviaons from the process mean Reliability can be improved through:
Determine order winners and order qualiers Cost of Good Quality (Prevenon/Appraisal) – Fails are COPQ X̿ = average of the sample means (process mean) Overdesign: Enhance reliability by using more durable,
Posioning the rm: how rm chooses to compete Quality Index Measures When Sigma is UNKNOWN more expensive materials to avoid a parcular type of
Deploying strategy: balanced scorecard (nancial, customer, process, Labour Index: Quality Cost/ Labour Hours
product failure
learning) Cost Index: Quality Cost/Manufacturing Cost
Design Simplicaon: Reduce the number of parts thereby
Factors aecng Firm Compeveness and Posioning Sales Index: Quality Cost/Sales
reducing failures points and increasing the probability that
Cost: removing waste, lean producon, examine cost structure Producon Index: Quality cost/ output A_2 obtained from Control Factors Table the system is going to work as planned
Flexibility: adjust to changes, mass customizaon (Nike ID) Quality index: total quality costs/base*(100) R̅ = average of sample ranges Redundancy in Design (backup): This means that if you
Quality: minimizing defects, conforming to specs (Ritz Carleton) Yield X̿ = average of the sample means (process mean) want to increase the probability that the car will start,
Speed: fast moves and adaptaons (McDonalds) Product Yield = (total input) (% good units) + (total input) (1−%good Range provide a second starter that can be used in the event that
Innovaon: corporate culture encourages risk taking, learning units) (% reworked) UCL = D4R-bar, LCL = D3R-bar, R-bar = sum(R)/k the rst starter fails
Operaons Strategy Product Cost
A set of coordinated policies, objecves, and acon plans, directly Cost = (KD*I + KR*R)/Y Both Process average and variability must be in control.
aecng the operaons funcon KD = Direct Manufacturing Cost Xbar chart detects shi in central tendency
Quality Management I = Input R Chart detects increase in dispersion
Quality – ability of good/service to consistently meet/exceed KR = Rework Cost Per unit System Availability (maintainability)
To idenfy a paern, look for:
expectaons of the consumers – sasfy needs R = Reworked Units 8 consecuve points on one side of the center line
Fitness for use: how well product/service does what it’s supposed to do Y = Yield 8 consecuve points up or down
Quality of design: degree to which quality characteriscs designed into Yield for a Mulstage Process 14 points alternang up or down MTBF = me/#failures = mean me between failures
product/service (consumers perspecve) Yield = Input * good quality percentages at dierent stages 2 out of 3 consecuve points in zone A (on one side) MTTR = mean me to repair
Quality Control – monitoring, tesng, and correcng quality problems Inial Batch Size = Yield/Percentages at dierent stages 4 out of 5 consecuve points in zone A or B (on one side) Services are…
aer they occur Quality Producvity Rao Process Capability – ability of a process to produce acceptable characterized by high levels of customer contact
Quality Assurance – providing condence that a products quality will be QPR = [Good Quality Units/ (Input) (Processing Cost) + (Reworked Units) outputs that conform to design specicaons (tolerance) intangible, perishable, and cannot be inventoried
good by prevenng defects before they occur (Rework cost)] *100 Comparing natural variability and design variability inseparable from the service delivery
Dimensions of Quality – Products: Performance, Special Features, QPR = # good units produced/ total processing cost Natural Variability – what is measured with control charts oen decentralized and geographically dispersed (e.g.,
Reliability, Conformance, Durability, Serviceability, Aesthecs, Safety, Design Specicaons – product requirements hotels, banks, restaurants)
Stascal Process Control– method that uses sampling and charts to
Percepons monitor the producon process to evaluate, detect and prevent bad 4 States can be easily emulated
Dimensions of Quality – Services: Timeliness, Completeness, Courtesy, quality. 1) Natural variaon exceeds design specicaons; process is not output is variable
Consistency, Accessibility and convenience, accuracy, responsiveness Process is in control if: 1)No sample points outside of the acceptable capable of meeng specs all of the me Elements of Waing Line Analysis: Calling populaon
CYCLE (TAKT) TIME= total time available/desired output limits 2) Most points are near process average 3) Approximately an even 2) Natural variaon and design specs are the same; process is (source of customers, innite or nite), channels (number
# OF WS=sum of task times/cycle time number of points above and below mean 4) Points are randomly capable of meeng specs almost all of the me of parallel servers), phases (number of servers in a
EFFIECIENCY=total task time/# of WS (workstations) distributed 3) Design specs are greater than natural variaon; process is sequence customers must go through)
capable of meeng specs all of the me
Waing Line Analysis Psychology: anxiety makes waing seem longer, Breakeven Analysis Mixed-model assembly line: produce mulple models, Learning percentage may dier between organizaons and by type
uncertain & unexplained & solo waing is worse than opposites, give ppl Assumpons: number of units produced can be sold, xed costs are reduce changeover me, cross-training, u-shape of work, making it beer to base learning percentage on empirical
something to do while waing, more valuable – longer wait worth constant regardless of units produced, variable costs vary with volume of Many objecves of facility layout design: studies within an organizaon rather than assumed percentage
Queuing Theory units produced, TR = TC Ensure smooth ow of work, material, people, and (from some other organizaon)
Arrival rate: rate at which customers arrive at the service facility Easy Formula: informaon Projecons based on learning curves should be regarded as
follows a probability distribuon, usually Poisson with mean (λ) (Fixed cost B – Fixed Cost A / Variable Cost A – Variable Cost B) Minimize movement and material-handling costs approximaons of actual mes and treated accordingly
Service rate: rate at which customers are served, follows a probability Breakeven Analysis for Process Selecon Use space and labor eciently Considerable care should be taken to ensure that the rst unit me
distribuon, usually Poisson with mean (μ) me required to serve a 1) Formulate total cost equaon for each process considered and order Eliminate producon bolenecks and increase capacity is valid. It may be desirable to revise the rst unit me as it may
customer, usually described by negave exponenal distribuon with from smallest xed cost to largest Facilitate communicaon and interacon (workers, change due to me compression, design changes, equipment
mean (1/ μ) 2) Eliminate redundant ones (if higher FC & VC) supervisors, customers) problems, etc.
Mean service rate (per hour) must be greater than mean arrival rate (per 3) Calculate point of indierence (TCA = TCB) Reduce manufacturing cycle me and customer service me
hour) i.e., λ < μ, otherwise the queue will become innitely long. 4) For volumes GREATER THAN point of indierence, choose alternave Fixed-posion layouts: used for projects in which product Learning curves are not useful for mass producon because the
Liles Law: The average number of customers in the queuing system is with HIGHER FC or LOWER VC cannot be moved associated tasks are usually simple, and learning takes place
equal to the product of the mean arrival rate into the system and the 5) For volumes LOWER THAN point of indierence, choose alternave with Process (funconal) layouts: group similar acvies together quickly before the curve aens
average me a customer spends waing in a system LOWER FC or HIGHER VC according to process or funcon they perform Users of learning curves somemes fail to include carryover eects
L=λW Capacity and Facility Design Product (assembly line) layouts: arrange acvies in line that some workers might have from pervious jobs; previous
Lq= λqWq Capacity is the throughput, or the maximum number of units a facility can according to sequence of operaons for a parcular product experience with similar acvies can reduce unit mes
Operang Characteriscs hold, receive, store, or produce in a given period of me. or service Learning curve applicaons: most important in complex, repeve
L = average number of customers in system (wait & serve) = λ/ μ- λ Levels: Long-term (overall level of resources in the long term 1yr+), Assembly Line Balancing operaons where work pace is determined by people, not
LQ = average number of customers waing in line = λ 2/ μ (μ- λ) intermediate-term (aggregate planning), short-term (capacity requirement Assumpons: workstaons in serial, processing mes known machines
W = Average me customer spends in system (wait & serve) = L/λ planning) Let j be the number of disnct tasks that must be performed Other informaon
Wq = Average me customer spends in line = Lq / λ A boleneck is the operaon with lowest capacity in a process on each unit processed on the assembly line Quality Gurus
p = probability that server is busy, and a customer must wait = ulizaon Factors aecng Capacity Let tj be the me required to complete tasks j W. Edwards Deming - Developed courses during WW II to teach
rate = λ/μ Facilies and Machines: oorspace, layout / Product Mix: standardized vs stascal quality-control techniques to engineers and execuves of
Flow Time (me to complete a unit)
I = Probability that server is idle and another customer can be served high variety / Workers: skills, training / Planning and Operaonal Factors: military suppliers. Aer war, began teaching stascal quality
= 1-p = 1- λ/μ = P0 Theorecal Minimum # of Workstaons (round up)
scheduling, inventory / External Factors: product standards, polluon control to Japanese companies
P0 = Probability that no customers are in the system = 1- λ/μ
Philip Crosby - In 1979, emphasized that costs of poor quality far
Pn = Probability of n customers in system = (λ/μ) n (1- λ/μ) Capacity planning is the process of establishing the overall level of a rm’s Measures of Line Balance Eciency outweigh cost of prevenng poor quality. In 1984, dened
Process Planning and Analysis producve resources and involves strategic acvies such as acquiring new
absolutes of quality management—conformance to requirements,
Process: a group of related tasks with specic inputs and outputs facilies, technologies, or businesses.
Process design: denes what tasks need to be done and how they are prevenon, and “zero defects”
When to increase capacity and by how much?
coordinated among funcons, people, and organizaons volume and certainty of ancipated demand Kaoru Ishikawa - Promoted use of quality circles, developed
Process strategy: an organizaon’s overall approach for physically n = actual # of workstaons, “shbone” diagram
strategic objecves (growth, customer service, compeon)
producing goods and services (vercal integraon, capital intensity, Ca = actual cycle me, max(t1, t2, t3) Deming’s 14 Points
costs of expansion and operaon
process exibility, customer involvement) Desired Cycle Time: Producon me available/desired units Create a constancy of purpose toward product improvement to
Process planning: determines how rm produces product/service of output = Cd achieve long-term organizaonal goals.
Importance of Long-term capacity Planning
(decide to make/buy, select producon process, develop specicaons of Line Balancing Procedure: 1) Draw precedence diagram 2)
Impacts ability to meet future demands and customer responsiveness Adopt a philosophy of prevenng poor-quality products
producon) nd Cd 3) nd N 4) group tasks into workstaons 5)measure
Aects operang costs, Major determinant of inial costs, Involves long Eliminate the need for inspecon to achieve quality by relying
Vercal integraon: extent to which rm will produce inputs and control eciency 6) determine if E is good, if not do 4
term commitment, Aects compeveness, Aects ease of management, instead on stascal quality control to improve product and
outputs of each stage of producon process Learning Curves
Requires Advanced Planning process design.
Capital intensity: mix of capital (i.e., equipment, automaon) and labor The learning curve reects the fact that each me the
number of units produced doubles, the processing me per Select a few suppliers or vendors based on quality
resources used in producon process Consideraons for capacity planning
unit decreases by a constant percentage Constantly improve the producon process by focusing on the two
Process exibility: ease with which resources can be adjusted in 1)Design exibility into systems
10% decrease in task me is represented by a 90% learning primary sources of quality problems, the system and employees,
response to changes in demand, technology, products or services, and 2)Dierenate between new and mature products
resource availability curve. The lower the learning curve, the greater the benet thus increasing producvity and reducing costs.
3)Take a “big picture” approach to capacity changes
Customer involvement: role of the customer in the producon process The unit me (i.e., the number of direct labor hours Instute worker training that focuses on the prevenon of quality
4)Choose capacity ming and increments
Process Selecon Chart: required) for the nth unit can be calculated using the problems and the use of stascal quality-control techniques.
5)Prepare to deal with capacity “chunks” by developing cushion, large (20%)
formula: tn = t1nb Insll leadership among supervisors to help employees perform
for industries where demand is variable and customer service, small for
where: beer.
capital-intensive industries
tn = me for the nth unit Encourage employee involvement by eliminang the fear of
Aempt to smooth out capacity requirements
t1 = me for the rst unit reprisal for asking quesons or idenfying quality problems.
Use capacity cushion (% of capacity held in reserve for unexpected
n = cumulave number of units produced
occurrences) to oset surges in demand and work stoppages Eliminate barriers between departments, promote cooperaon
b = ln r/ln 2 where r is the learning curve percentage in
Aim is to achieve the best operang level and teamwork
decimal (90% = 0.9)
Economies of scale: unit cost down, output volume up – opposite of Eliminate slogans and numerical targets
diseconomies of scale Eliminate numerical quotas
Calculang Number of Units Required
Enhance worker pride
Capacity Expansion Strategies
b = ln (learning percentage/100) ÷ ln (2) Instute vigorous educaon and training programs in the
Lead – expanded in ancipaon of demand growth.
Applicaons include: methods of quality improvement throughout the organizaon,
Average – expanded to coincide with average expected demand.
Negoated selling/purchasing prices from top management down, so that connuous improvement can
Lag – expanded aer an increase in demand has been documented.
Labor planning and scheduling occur.
Assessing labor training needs and performance Develop a commitment to quality from top management
Layout refers to the arrangement of acvies, processes, departments,
Outsource or not: cost, capacity, quality, speed, reliability, experse Forecasng our ability to meet future needs for services Wheel: plan, do, check, act PROJECT (JOB) SHOP - one unit of
workstaons, storage areas, aisles, and common areas within a facility
Process plans are a set of documents and drawings that detail such as health care output at a time, autobody custom workshop ex. worker skills
Goal: minimize material handling costs
manufacturing and service delivery specicaons [assembly charts (bill
1, volume 4, flexibility 1, uniformity 4, capital cost 4. BATCH
of materials), operaons sheets, quality-control check-sheets] Changes to pre-producon factors such as tooling and
Cellular layout: (group dissimilar machines into work centres/cells, PROCESSIN - produced in batches, bakery or brewery.
Process Analysis: A systemac examinaon of all aspects of a process to machine upgrades
combine exibility of process w/ eciency of assembly) worker skills 2, volume 3, flexibililty 2, uniformity 3, capital
improve its operaon – faster, more ecient, less costly, more responsive Increases pre-process employee training and movaon
Advantages: reduce material handling/transit me, reduce setup, reduce cost 3. REPETITIVE - higher volue of output, car assembly
Tools for Process Analysis: Process changes/improvements
WIP inventory, beer use of HR, easier to control, easier to automate plant. worker skills 3, volume 2, flexibility 3, uniformity 2,
Process Flowchart: show sequence of ops, dene boundaries/capacity Product redesign
Disadvantages: Inadequate part families, poorly balanced cells, expanded capital cost 2. CONTINUOUS - highest level out output, steel
limitaons, dene units of ow, facilitate observaon of process and data Changes in layout
training & scheduling of workers, capital investment mill or paper plant. worker skills 4, volume 1, flexibility 4,
collecon Improvements in support services
Flexible Manufacturing System: programmable machine tools, automated uniformity 1, capital cost 1.
Process Map: Map out acvies performed by various ppl in the process Lot size increases
tool changing, controlled by computer