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Operations Management & Management Science (Course Introduction). Mark A. Thompson Rawls College of Business [email protected] 806-742-1535. Course Syllabus. Course Description Learning Outcomes Course Materials Course Requirements and Assignments

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Operations management management science course introduction

Operations Management & Management Science(Course Introduction)

Mark A. Thompson

Rawls College of Business

[email protected]

806-742-1535


Course syllabus

Course Syllabus

  • Course Description

  • Learning Outcomes

  • Course Materials

  • Course Requirements and Assignments

    • ALL ASSIGNMENTS SHOULD BE TURNED IN OR EMAILED TO MARK THOMPSON ([email protected])

    • In subject line, “ISQS 5343 Assignment #X” and group (i.e., A09, WeekBlock 10G or 10M)


Overall perspective of course

Overall Perspective of Course

  • Ways to increase VALUE?

    • Increase REVENUES

    • Decrease COSTS

    • Decrease (or manage) your RISKS


Course schedule saturday may 28

Course Schedule(Saturday, May 28)

  • Increasing REVENUE through operations management

    • Mark Thompson and Lowell Lay

  • Decreasing COSTS through operations management

    • Phil Flamm


Course schedule sunday may 29

Course Schedule(Sunday, May 29)

  • Managing operational RISKS

    • Mark Thompson

  • Supply chain management and case study

    • Qing Cao and Brad Ewing


Due dates

Due Dates

  • Project Presentations & Assignments #1-4

    • Due Saturday, August 13

  • Assignments #5 & #6

    • Due Monday, December 5


Operations management management science course introduction

Questions

All assignments go to: Mark Thompson

[email protected]


Operations management 5343 jit lean operations decreasing costs and adding value phillip flamm

Operations Management 5343JIT/Lean Operations“Decreasing Costs and Adding Value”Phillip Flamm


Just in time and lean operations

Just-In-Time and Lean Operations:

  • Is a philosophy of continuous and forced (corporate culture) problem solving via a focus on throughput and reduced inventory

  • Emphasizes continuous improvement, respect for people, and standard work practices

  • Supplies the customer with their exact wants when the customer wants it without waste

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Jit lean and competitive advantage

JIT/Lean and Competitive Advantage

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Jit lean and competitive advantage1

JIT/Lean and Competitive Advantage

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Lean operations in services

Lean Operations in Services

  • The JIT techniques used in manufacturing are used in services

    • Suppliers

    • Layouts

    • Inventory

    • Scheduling

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Operations management management science course introduction

  • Five Basic JIT/Lean Principles Include Continuously:

  • Eliminating Waste: eliminate any activities that do not add value in an organization. Includes overproduction, waiting time, processing, inventory, and motion.

  • Increasing Speed and Response (throughput): better process designs allow efficient responses to customers needs and the competitive environment. Lean/JIT is market driven. Theory of Constraints.

  • Improving Quality (reducing variability): Poor quality creates waste, so improving quality is essential to the lean environment.

  • Reducing Cost: simplifying processes and improving efficiency translates to reduced costs.

  • Maintaining respect for all workers : people, not machines make things happen


Impact of jit lean implementation

Impact of JIT/Lean Implementation

  • Alcoa in 1999 …..1/4 billion dollars in inventory reduction

  • One 5 year study of JIT/Lean implementations yielded:

    • 50% reduction in space required

    • 50% less need for material handling equipment

    • 80% reduction in inventory required

    • 80% reduction in lead time

    • 75% reduction in rework or product failures


Operations management management science course introduction

Another 1999 Study of Different Sized Companies


Why do companies not see improvement through jit lean

Why do companies not see improvement through JIT/Lean?


Operations management management science course introduction

Upper Management Buy In

and/or Leadership Style


1 eliminating waste

1. Eliminating Waste


Operations management management science course introduction

1. Eliminate Waste

  • Waste is anything that doesn’t add value:

    • Unsynchronized production (too early or too late)

    • Scrap & rework (defects)

    • Excess inventory & WIP (overproduction)

    • People waste (waiting time)

    • Unnecessary material handling (stalled work flows)

    • Inefficient & un-streamlined layouts (reducing travel distances)

  • Visibility - waste can only be eliminated after it’s discovered

  • Clutter hides waste

  • JIT requires good housekeeping


Good housekeeping the 5 ss

Good Housekeeping -The 5 Ss

  • Sort/segregate – when in doubt, throw it out

  • Simplify/straighten – methods analysis tools

  • Shine/sweep – clean daily

  • Standardize – remove variations from processes

  • Sustain/self-discipline – review work and recognize progress

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Good layouts consider

Good Layouts Consider:

  • That layout must support competitive priorities & core competencies

  • Material handling equipment

  • Capacity and space requirements

  • Environment and aesthetics

  • Flows of information

  • Cost of moving between various work areas

  • Employee morale, customer satisfaction

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Jit lean layout

JIT Layout Tactics

Build work cells for families of products

Include a large number operations in a small area

Minimize distance

Design little space for inventory

Improve employee communication

Use poka-yoke devices

Build flexible or movable equipment

Cross-train workers to add flexibility

JIT/Lean Layout

Reduce waste due to movement

Table 16.1

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Methods analysis

Methods Analysis

  • Focuses on how task is performed

  • Used to analyze

    • Movement of individuals or material

      • Flow diagrams and process charts

    • Activities of human and machine and crew activity

      • Activity charts

    • Body movement

      • Operations charts

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Flow diagram

Welding

From

press mach.

Storage bins

Paint shop

Mach. 3

Mach. 4

Machine 1

Mach. 2

Flow Diagram

Figure 10.5 (a)

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Flow diagram1

Welding

Machine 4

Machine 3

Paint shop

Machine 2

Machine 1

From press mach.

Storage bins

Flow Diagram

Figure 10.5 (b)

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Process oriented layout job batch shop

Process-Oriented LayoutJob/Batch Shop

  • Like machines and equipment are grouped together

  • Flexible and capable of handling a wide variety of products or services

  • Scheduling can be difficult and setup, material handling, and labor costs can be high

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Process oriented layout

Patient A - broken leg

ER triage room

Emergency room admissions

Patient B -erratic heart pacemaker

Surgery

Laboratories

Radiology

ER Beds

Pharmacy

Billing/exit

Process-Oriented Layout

Figure 9.3

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Operations management management science course introduction

A Process (batch or job shop) Focus


Operations management management science course introduction

Process (job or batch) Layouts

  • Flexible resources including workers

  • More customization ability

  • Higher worker satisfaction

  • Higher labor cost - workers more skilled

  • Processing rates are slower

  • Material handling costs are higher/more WIP

  • Scheduling resources & work flow is more complex

  • Space requirements are higher


Process oriented layout1

Process-Oriented Layout

  • Arrange work centers so as to minimize the costs of material handling

  • Basic cost elements are

    • Number of loads (or people) moving between centers

    • Distance loads (or people) move between centers

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Operations management management science course introduction

Designing Hybrid Layouts

  • One of the most popular hybrid layouts uses Group Technology (GT) and a cellular layout

  • GT has the advantage of bringing the efficiencies of a assembly line layout to a process layout environment


Advantages of assembly line work cells reduced waste

Advantages of Assembly Line Work Cells (reduced waste)

  • Reduced work-in-process inventory

  • Less floor space required

  • Reduced raw material and finished goods inventory

  • Reduced direct labor

  • Heightened sense of employee participation

  • Increased use of equipment and machinery

  • Reduced investment in machinery and equipment

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Requirements of assembly line work cells

Requirements of Assembly Line Work Cells

Identification of families of products

A high level of training, flexibility and empowerment of employees

Being self-contained, with its own equipment and resources

Test (poka-yoke) at each station in the cell

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Operations management management science course introduction

Traditional Process (Job Shop) Focused Layout

  • Jumbled flows, long cycles, difficult to schedule


Operations management management science course introduction

JIT Hybrid Cellular Manufacturing (increased responsiveness to customer demand)

  • Product focused cells, flexible equipment, high visibility, easy to schedule, short cycles


Improving layouts using work cells

Improving Layouts Using Work Cells

Current layout - workers in small closed areas.

Improved layout - cross-trained workers can assist each other. May be able to add a third worker as additional output is needed.

Figure 9.10 (a)

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Operations management management science course introduction

Pros/Cons of Assembly Lines

  • Processing rates are faster

  • Material handling and labor costs are lower

  • Less space required for inventories

  • High capital cost & wide use of automation

  • Less volume or design flexibility

  • Specialized equipment required

  • Support staff expensive

  • Balancing difficult


Operations management management science course introduction

Imagine One Person at Each Station


Operations management management science course introduction

Utilizing 3 People Instead of 9!

55

55

55

Now everyone has the same amount of

work…….hard to do in most cases.


Improving assembly lines utilizing u shaped lines

Improving Assembly Lines Utilizing “U” Shaped Lines

Current layout - straight lines make it hard to balance tasks because work may not be divided evenly

Improved layout - in U shape, workers have better access. Four cross-trained workers were reduced.

U-shaped line may reduce employee movement and space requirements while enhancing communication, reducing the number of workers, and facilitating inspection

Figure 9.10 (b)

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Warehousing and storage layouts

Warehousing and Storage Layouts

Material Handling Costs

  • All costs associated with the transaction

    • Incoming transport

    • Storage

    • Finding and moving material (how to reduce time requirements)

    • Outgoing transport

    • Equipment, people, material, supervision, insurance, depreciation

  • Minimize damage and spoilage

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Traditional warehouse layo ut

Storage racks

Customization

Conveyor

Staging

Office

Shipping and receiving docks

Traditional Warehouse Layout

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Cross docking warehouse layout

Shipping and receiving docks

Office

Shipping and receiving docks

Cross-Docking Warehouse Layout

*requires pull system

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Cross docking

Cross-Docking

  • Materials are moved directly from receiving to shipping and are not placed in storage in the warehouse

  • Requires tight scheduling and accurate shipments, bar code or RFIDidentification used foradvanced shipmentnotification as materialsare unloaded

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Office layouts 1 2 us workers in offices

Office Layouts (1/2 US workers in offices)

  • Grouping of workers, their equipment, and spaces to provide comfort, safety, and movement of information

  • Movement of information is main distinction

  • Typically in state of flux due to frequent technological changes

  • Trade offs between proximity and privacy

  • Open concept promotes trust & understanding

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Relationship chart

Relationship Chart

Figure 9.1

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Operations management management science course introduction

Break Room

Storage

Typing-

Dictation

Copy Room

Entrance

Close Proximity

Desirable

Boss


Operations management management science course introduction

Designing Service/Office Layouts

  • Step 1: Gather information:

    • Space needed, space available, importance of proximity between various units

  • Step 2: Develop alternative block plans:

    • Using trial-and-error or decision support tools

  • Step 3: Develop a detailed layout

    • Consider exact sizes and shapes of departments and work centers including aisles and stairways

    • Tools like drawings, 3-D models, and CAD software are available to facilitate this process


Operations management management science course introduction

Step 1: Gather Information

Recovery First Sports Medicine Clinic


Operations management management science course introduction

Service/Office Layout Steps

  • Step 1: Gather information like space needed, from-to matrix, and REL Chart for Recovery First Sports Medicine Clinic (total space 3750 sq. ft.)

1

(A to B)

(C to D)

(A to E)

2

3

Distance =


Operations management management science course introduction

Step 2: Develop a Block Layout

Current

Proposed

Proposed Layout

Would Require Less

Walking


Operations management management science course introduction

2. Increasing Speed and Response


2 increasing speed and response throughput

2. Increasing Speed and Response (throughput)

  • Flexibilityin relation to customer needs

    • Flexible or level schedules with quick volume changes

    • Small lot sizes….one piece flow

    • Short changeover/setup time

  • Theory of Constraints

  • Visible control systems

    • Kanbans

    • Lights, marked places on the floor

  • Scheduled preventative maintenance


Operations management management science course introduction

Flexible Schedules Require Flexible Resources

  • Flexible equipment:

    • Computer controlled robotics and other equipment

    • Capable of being setup to do many different things with minimal setup time

  • Multifunctional workers:

    • Workers assume considerable responsibility

    • Cross-trained to perform several different duties

    • Trained to also be problem solvers (root cause analysis)


Operations management management science course introduction

…..and Scheduling Flexibility!

  • Traditional (push system)

    • long setups and long runs (batches)

    • Produce to forecasts

  • JIT (pull system)

    • make only what is used by forward work station or sold to customer

    • manual Kanban system

    • quick changeovers


Scheduling small lots

JIT Level Material-Use Approach

A

A

B

B

B

C

A

A

B

B

B

C

A

A

A

A

A

A

B

B

B

B

B

B

B

B

B

C

C

C

Large-Lot Approach

Time

Scheduling Small Lots

Figure 16.7

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Operations management management science course introduction

Small Lot Sizes & Quick Setups

  • Small lots mean less average inventory and shorten manufacturing lead time

  • Small lots with shorter setup times increase flexibility to respond to demand changes

  • Strive for single digit setups- < 10 minutes

  • Setup reduction process is well-documented

    • External tasks- do as much preparation while present job is still running

    • Internal tasks- simplify, eliminate, shorten steps involved with location, clamping, & adjustments


Reduce setup times

Initial Setup Time

90 min —

Separate setup into preparation (external) and actual setup (internal) , doing as much as possible while the machine/process is operating

(save 30 minutes)

Step 1

60 min —

Move material closer and improve material handling (save 20 minutes)

Step 2

45 min —

Standardize and improve tooling (save 15 minutes)

Step 3

25 min —

Use one-touch system to eliminate adjustments (save 10 minutes)

Step 4

15 min —

Training operators and standardizing work procedures (save 2 minutes)

13 min —

Step 5

Repeat cycle until subminute setup is achieved

Step 6

Reduce Setup Times

Figure 16.6

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Operations management management science course introduction

Cutting Tool here

Part mounted here


Batch vs one piece flow

Batch vs. One Piece Flow


Operations management management science course introduction

Batch, Job Shop, or Process Layout

1 minute per piece

Process 1

Warehouse

1 day

wait

2 day wait

2 hour wait

Process 3

1 minute

per piece

Process 2

2 minutes

per piece

2 hour wait

1 day wait

5 minutes

Per piece

Assembly

Quality

Control

1 minute

Per piece

Packing

Shipping

= WIP

2 minutes per piece


Operations management management science course introduction

Process Time Wait Time

1 minute

Process 1

2 hour wait

Process 2

2 minutes

----

Warehouse

1 day wait

Process 3

1 minute

2 hour wait

Assembly

5 minutes

1 day wait

Quality Control

1 minute

Warehouse

----

2 day wait

Packing Shipping

2 minutes

4 days 4 hours

12 minutes

4 days 4 hrs. and 12 minutes + for one part

or one batch to get through - Value Added?


Operations management management science course introduction

Cell, Team, or Hybrid Layout

Process 1

1 minute per piece

1 operator

Process 2

2 minutes per piece

One Piece Flow -

Team of 12

Operators -

11 minutes + for

one piece start to finish.

Approx. 1 minute

Per piece = Cycle

Time or 60/hour

2 operators

Process 3

1 minute per piece

1 operator

Assembly/

Packing Ship

7 minutes per piece

8 operators

One Customer Order is shipped


Operations management management science course introduction

Advantages of One Piece Flow

  • Eliminate operations that customer is unwilling to pay for

  • Decrease amount of product that customer must stock

  • Increase JIT – flexibility, quality, lead times

  • Decrease need for WIP $$$$


Operations management management science course introduction

What is TOC orConstraint Management?

  • The core idea in the Theory of Constraints is that every real system such as a profit-making enterprise must have at least one constraint.

  • There really is no choice in the matter. Either you manage constraints or they manage you. The constraints will determine the output of the system whether they are acknowledged and managed or not.


Operations management management science course introduction

Definitions:

Theory of Constraints (TOC)is a set of principles that focuses on increasing total process throughput by maximizing the utilization of all bottleneck work activities and workstations.

Throughput:amount of money generated per time period through actual sales.

Constraint: anything that limits an organization from moving toward or achieving its goal.


Bottleneck analysis and theory of constraints

Bottleneck Analysis and Theory of Constraints

  • Each work area can have its own unique capacity

  • Capacity analysis determines the throughput capacity of workstations in a system

  • A bottleneck is a limiting factor or constraint

  • A bottleneck has the lowest effective capacity in a system

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Operations management management science course introduction

120/hour..

Is that all Beavis?

120/hr

200/hr

300/hr

Managers

  • Cycle time is the interval between successive outputs coming off the assembly line and is determined by the bottleneck or station that takes the longest.

  • The cycle time of this example is 0.5 minute, because task A is the bottleneck, or slowest operation. The line can produce only one assembly every 0.5 minute.


Process times for stations systems and cycles

Process Times for Stations, Systems, and Cycles

  • The process time of a station is the time to produce a unit at that single workstation (A, B, or C)

  • The cycle time of a system is the time of the longest process in the system … the bottleneck

  • The process time is the time it takes for a product to go through the production process with no waiting or net work time.

Same?

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Operations management management science course introduction

What measurement should we use?

  • Generally Accepted Performance Measures

    • Net profit

    • Return on Investment/Equity/Assets

    • Cash Flow

  • TOC does NOT question the validity nor the importance of these 3 measures; they must be satisfied. However, TOC does question their usefulness as operational measures.


Operations management management science course introduction

One main goal of JIT/Lean is to deliver the right product, at the right price, with the right quality, at the right time or JUST IN TIME!!!!


Operations management management science course introduction

What measurement should we use?

For the average worker, seeing the effect that any given action has on Net Profit (NP) or ROI is almost impossible. As a result we have created measures like efficiency and utilizationbecause we believe they are linked to NP and ROI.

But are they?


Operations management management science course introduction

Will utilizing B and C more help with throughput?

Will making B and C more efficient help?

The result would be what?

Process A

Process B

Process C

300/hr

.2 minutes per part

200/hr

.3 minutes per part

120/hr

.5 minutes per part


Theory of constraints

Theory of Constraints

  • Five-step process for recognizing and managing limitations

Step 1:Identify the constraint/bottleneck

Step 2:Develop a plan for overcoming the constraints/bottlenecks

Step 3:Focus resources on accomplishing Step 2

Step 4:Reduce the effects of constraints/bottlenecks by offloading work or expanding capability (utilize feeder buffer)

Step 5:Once overcome, go back to Step 1 and find new constraints/bottlenecks

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Bottleneck management

Bottleneck Management

  • Release work orders to the system at the pace of set by the bottleneck

  • Lost time at the bottleneck represents lost time for the whole system

  • Increasing the capacity of a non-bottleneck station is a mirage

  • Increasing the capacity of a bottleneck increases the capacity of the whole system

© 2011 Pearson Education, Inc. publishing as Prentice Hall


The visual workplace

The Visual Workplace

Visual utensil holder encourages housekeeping

A “3-minute service” clock reminds employees of the goal

Figure 10.8

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The visual workplace1

Patient waiting

Doctor in room

Room Clear

Andon

The Visual Workplace

Visual signals at each room notify support personnel

Figure 10.8

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Kanban

Kanban

  • Kanban is the Japanese word for card

  • The card is an authorization for the next container of material to be produced

  • A sequence of kanbans pulls material through the process

  • Many different sorts of signals are used, but the system is still called a kanban

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More kanban

…….More Kanban

  • Usually each card controls a specific quantity or parts

  • Multiple card systems may be used if there are several components or different lot sizes

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Operations management management science course introduction

Two Cards Utilized:

Withdrawal Kanban

And Production Kanban

Kanban Process


Kanban1

Production Card

Part numbers mark location

Kanban

User removes a standard sized container

Signal is seen by the producing department as authorization to replenish Withdrawal Card

Kanban Containers

W

P

P

Figure 16.8

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Advantages of kanban

Advantages of Kanban

  • Allow only limited amount of faulty or delayed material

  • Problems are immediately evident

  • Puts downward pressure on bad aspects of inventory

  • Standardized containers reduce weight, disposal costs, wasted space, and labor

© 2011 Pearson Education, Inc. publishing as Prentice Hall


What is a root cause

What is a root cause?

  • The reason something happens

  • A definition of what went wrong

  • The most basic causal factor, or factors, which if corrected or removed will prevent the recurrence of a situation


Operations management management science course introduction

Root Cause Analysis

“The 5 Whys”

Problem Statement: You are on your way home from work and your car stops in the middle of the road.1. Why did your car stop?   - Because it ran out of gas.2. Why did it run out of gas?   - Because I didn't buy any gas on my way to work.3. Why didn't you buy any gas this morning?   - Because I didn't have any money.4. Why didn't you have any money?   - Because I lost it all last night in a poker game.5. Why did you lose your money in last night's poker game?   - Because I'm not very good at "bluffing" when I don't have a good hand.


Operations management management science course introduction

Scheduled Preventative Maintenance

  • Traditional

    • corrective maintenance when eqt. breaks

    • done by high paid experts

    • equipment run as fast as possible

  • JIT

    • Total Productive Maintenance Approach

    • scheduled preventive maintenance done by equipment operators when possible


Operations management management science course introduction

  • Total Productive Maintenance (TPM)

  • TPM is focused on ensuring that operating systems will perform their intended function reliably.

  • TPM works to prevent equipment failures and downtime, maximizing equipment effectiveness and uptime.

  • TPM tries to predict equipment failure rates and perform maintenance before a problem arises.

  • The principles of TPM also include employee “ownership” of the equipment.


Is predictive maintenance cost effective

Is Predictive Maintenance Cost Effective?

In most industries the average rate of return is 7:1 to 35:1 for each predictive maintenance dollar spent

The real savings is the avoidance of manufacturing downtime – especially crucial in JIT scheduling

© 2011 Pearson Education, Inc. publishing as Prentice Hall


3 improving quality

3. Improving Quality


3 improving quality reducing variability

3. Improving Quality (reducing variability)

  • Empowerment = quality at the source

  • Statistical process control tools available at the operator level

  • Goal is zero defects

  • Provide immediate feedback

  • Traditional viewpoint: “It’s good enough”

  • JIT viewpoint: “If it’s not perfect, make it better” (Continuous Improvement)


Remove variability

Remove Variability

  • JIT systems require managers to reduce variability caused by both internal and external factors

  • Variability is any deviation from the optimum process

  • Inventory hides variability (use Kanbans)

  • Less variability results in less waste

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Quality at the source inspection stations

Quality at the Source > Inspection Stations

  • Many problems

    • Worker fatigue

    • Measurement error

    • Process variability

  • Cannot inspect quality into a product

  • Robust design, empowered employees, and sound processes are better solutions

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Quality at the source inspection

“Quality at the Source” Inspection

  • Also known as source control

  • The next step in the process is your customer

  • Ensure perfect product to your customer

Poka-yoke is the concept of foolproof devices or techniques designed to pass only acceptable product

© 2011 Pearson Education, Inc. publishing as Prentice Hall


How to measure quality

How to Measure Quality?

Statistical process control (SPC): a methodology for monitoring quality of manufacturing and service delivery processes to help identify and eliminate unwanted causes of variation. Used to determine whether a process is performing as expected and whether something in the process has changed.


Statistical process control spc

Statistical Process Control (SPC)

  • Uses statistics and control charts to tell when to take corrective action

  • Drives process improvement

  • Four key steps

    • Measure the process

    • When a change is indicated, find the assignable cause

    • Eliminate or incorporate the cause

    • Restart the revised process

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Operations management management science course introduction

Total Quality Management

  • Build quality into all processes

  • Focus on continuous improvement - Kaizen

  • Quality at the source- sequential inspection

  • Jidoka (authority to stop line)

  • Poka-yoke (fail-safe all processes) i.e. order processing

  • Work environment- everything in its place, a place for everything


Employee empowerment

Employee Empowerment

  • Getting employees involved in product and process improvements

    • 85% of quality problems are due to process and material

  • Techniques

    • Build communication networks that include employees

    • Develop open, supportive supervisors

    • Move responsibility to employees

    • Build a high-morale organization

    • Create formal team structures

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Setting control limits

Variation due to assignable causes

Out of control

17 = UCL

Variation due to natural causes

16 = Mean

15 = LCL

Variation due to assignable causes

||||||||||||

123456789101112

Out of control

Sample number

Setting Control Limits

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Quality at the source in services

“Quality at the Source” In Services

  • Service quality is more difficult to measure than the quality of goods

  • Service quality perceptions depend on

    • Intangible differences between products

    • Intangible expectations customers have of those products

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Service recovery strategy

Service Recovery Strategy

  • Managers should have a plan for when services fail

  • Marriott’s LEARN routine

    • Listen

    • Empathize

    • Apologize

    • React

    • Notify

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Service recovery strategy1

Service Recovery Strategy

  • Managers should have a plan for when services fail

  • Marriott’s LEARN routine

    • Listen

    • Empathize

    • Apologize

    • React

    • Notify

© 2011 Pearson Education, Inc. publishing as Prentice Hall


4 reduce cost

4. Reduce Cost

  • Simplicity - It’s often easy to develop complex solutions to problems by adding extra steps

  • Goal is to find a simpler way to do things right:

    • Less chance to forget w/o extra steps

    • Fewer opportunities to make mistakes

    • More efficient

  • Reduced WIP (supplier relationships)


Jit lean partnerships

JIT/Lean Partnerships

  • JIT partnerships exist when a supplier and purchaser work together to remove waste and drive down costs

  • Four goals of JIT partnerships are:

    • Removal of unnecessary activities

    • Removal of in-plant inventory

    • Removal of in-transit inventory

    • Improved quality and reliability

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Jit partnerships

JIT Partnerships

Figure 16.2

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Toyota motor corporation san antonio

Toyota Motor CorporationSan Antonio

Main Assembly Complex

Supplier Buildings

© 2011 Pearson Education, Inc. publishing as Prentice Hall


Operations management management science course introduction

Critical Factors in Successful Partnership Relations (Virtual Integration)

  • Benefits of Partnering

    • Early supplier involvement (ESI) in the design process

    • Using supplier expertise to develop and share cost improvements and eliminate costly processes

    • Shorten time to market


Concerns of suppliers

Concerns of Suppliers

  • Diversification – ties to only one customer increases risk

  • Scheduling – don’t believe customers can create a smooth schedule

  • Lead time – short lead times mean engineering or specification changes can create problems

  • Quality – limited by capital budgets, processes, or technology

  • Lot sizes – small lot sizes may transfer costs to suppliers

© 2011 Pearson Education, Inc. publishing as Prentice Hall


5 maintaining respect for all workers

5. Maintaining Respect for All Workers

  • Worker’s role

  • Management’s role


Operations management management science course introduction

Respect for People: The Role of Employees

  • Genuine and meaningful respect for associates

  • Willingness to develop cross-functional skills

  • Actively engage in problem-solving (quality circles)

  • Everyone is empowered

  • Everyone is responsible for quality: understand both internal and external customer needs

  • Associates gather performance data

  • Team approaches used for problem-solving

  • Decisions made from bottom-up

  • Everyone is responsible for preventive maintenance


Operations management management science course introduction

Respect for People:The Role of Management

  • Treat people as knowledge workers

  • Responsible for culture of mutual trust

  • Serve as coaches & facilitators

  • Support culture with appropriate incentive system

  • Responsible for developing workers

  • Provide multi-functional training

  • Facilitate teamwork


Operations management management science course introduction

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