333 Lean Management and Quality Processes S09.ppt

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecastingLean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    Production/Operations

    Management

    Dr. Eliot Elfner

    St. Norbert College

    Spring 2009

    Lean Manufacturing and

    Quality Processes

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecastingLean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    2

    TOPICS

    Discussion of topics Lean Manufacturing

    Quality Processes

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecastingLean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    3

    Lean Production

    Lean Production can be defined as anintegrated set of activities designed toachieve high-volume production usingminimal inventories (raw materials, work

    in process, and finished goods) Lean Productionalso involves the

    elimination of waste in production effort

    Lean Productionalso involves the timing

    of production resources (i.e., parts arriveat the next workstation just in time)

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecastingLean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    4

    The Toyota Production System

    Based on two philosophies: 1. Elimination of waste

    2. Respect for people

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecastingLean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    5

    Elimination of Waste

    1. Focused factory networks2. Group technology

    3. Quality at the source

    4. JIT production

    5. Uniform plant loading

    6. Kanban production controlsystem

    7. Minimized setup times

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecastingLean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    6

    Minimizing Waste:

    Focused Factory

    Networks

    CoordinationSystem

    Integration

    These are small

    specialized plants that

    limit the range of

    products produced

    (sometimes only one

    type of product for an

    entire facility)

    Some plants

    in Japan

    have as few

    as 30 and as

    many as1000

    employees

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecastingLean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    7

    Minimizing Waste:

    Group Technology (Part 1)

    Using Departmental Special izationfor plant layout

    can cause a lot of unnecessary material movement

    Note how the flow lines are going backand forth

    Saw Saw

    Lathe PressPress

    Grinder

    LatheLathe

    Saw

    Press

    Heat Treat

    Grinder

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    8/49

    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecastingLean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    8

    Minimizing Waste:

    Group Technology (Part 2)

    Revising by using Group Techno logy Cel lscan reducemovement and improve product flow

    Press

    Lathe

    Grinder

    Grinder

    A

    2

    BSaw

    Heat Treat

    LatheSaw Lathe

    PressLathe

    1

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecastingLean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    9

    Minimizing Waste:

    Uniform Plant Loading (heijunka)

    Suppose we operate a production plant that produces a single

    product. The schedule of production for this product could be

    accomplished using either of the two plant loading schedules below.

    Not uniform Jan. Units Feb. Units Mar. Units Total

    1,200 3,500 4,300 9,000

    Uniform Jan. Units Feb. Units Mar. Units Total

    3,000 3,000 3,000 9,000

    How does the uniform loading help save labor costs?

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecastingLean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    10

    Minimizing Waste: Inventory

    Hides Problems

    Work in

    process

    queues

    (banks)

    Change

    orders

    Engineering design

    redundancies

    Vendor

    delinquencies

    Scrap

    Design

    backlogs

    Machine

    downtime

    Decision

    backlogs

    Inspection

    backlogs

    Paperwork

    backlog

    Example: Byidentifying defective

    items from a vendor

    early in the

    production process

    the downstream workis saved

    Example: Byidentifying defective

    work by employees

    upstream, the

    downstream work is

    saved

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecastingLean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    11

    Minimizing Waste: Kanban Production

    Control Systems

    Storage

    Part AMachine

    CenterAssembly

    Line

    Material Flow

    Card (signal)Flow

    Withdrawal

    kanban

    Once the Production kanban

    is received, the Machine

    Center produces a unit to

    replace the one taken by the

    Assembly Line people in the

    first place

    This puts the

    system back

    were it was

    before the item

    was pulled

    The process begins by the Assembly

    Line people pulling Part A fromStorage

    Production kanban

    Storage

    Part A

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecastingLean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    12

    Determining the Number of

    Kanbans Needed

    Setting up a kanban system requiresdetermining the number of kanbanscards (or containers) needed

    Each container represents the

    minimum production lot size

    An accurate estimate of the lead timerequired to produce a container is key

    to determining how many kanbansare required

    I t d ti t P/OM

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    13

    The Number of Kanban Card Sets

    k = Number of kanban card sets (a set is a card)

    D= Average number of units demanded over sometime period

    L = lead time to replenish an order (same units oftime as demand)

    S= Safety stock expressed as a percentage ofdemand during leadtime

    C= Container size

    k =Expected Demand During Lead Time + Safety Stock

    Size of the Container

    k =

    DL(1+S)

    C

    I t d ti t P/OM

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    14

    Example of Kanban Card

    Determination: Problem Data

    A switch assembly is assembled in batches

    of 4 units from an upstream assemblyarea and delivered in a special container to adownstream control-panel assemblyoperation

    The control-panel assembly area requires 5switch assemblies per hour

    The switch assembly area can produce acontainer of switch assemblies in 2 hours

    Safety stock has been set at 10% of neededinventory

    I t d ti t P/OM

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    15

    Example of Kanban Card

    Determination: Calculations

    Always round up!

    k =Expected Demand During Lead Time + Safety Stock

    Size of the Container

    k =DL(1+S)

    C=

    (5)*(1)*(1.1)

    4= 2.75, or 3

    Introd ction to P/OM

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    16

    Respect for People

    Level payrolls

    Cooperative employee unions

    Subcontractor networks

    Bottom-round management style

    Quality circles (Small GroupInvolvement Activities or SGIAs)

    Introduction to P/OM

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    17

    Toyota Production Systems

    Four Rules

    1. All work shall be highly specified as tocontent, sequence, timing, and outcome

    2. Every customer-supplier connection must bedirect, and there must be an unambiguous

    yes-or-no way to send requests and receiveresponses

    3. The pathway for every product and servicemust be simple and direct

    4. Any improvement must be made inaccordance with the scientific method, underthe guidance of a teacher, at the lowestpossible level in the organization

    Introduction to P/OM

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    18

    Lean Implementation Requirements:

    Design Flow Process

    Link operations

    Balance workstation capacities

    Redesign layout for flow

    Emphasize preventive maintenance

    Reduce lot sizes

    Reduce setup/changeover time

    Introduction to P/OM

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    19

    Lean Implementation Requirements:

    Total Quality Control

    Worker responsibility

    Measure SQC

    Enforce compliance

    Fail-safe methods

    Automatic inspection

    Introduction to P/OM

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    20

    Lean Implementation Requirements:

    Stabilize Schedule

    Level schedule

    Underutilize capacity

    Establish freeze windows

    Introduction to P/OM

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    21

    Lean Implementation Requirements:

    Kanban-Pull

    Demand pull

    Backflush

    Reduce lot sizes

    Introduction to P/OM

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    22

    Lean Implementation Requirements:

    Work with Vendors

    Reduce lead times

    Frequent deliveries

    Project usage requirements

    Quality expectations

    Introduction to P/OM

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    23

    Lean Implementation Requirements:

    Reduce Inventory More

    Look for other areas

    Stores

    Transit

    Carousels

    Conveyors

    Introduction to P/OM

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    24

    Lean Implementation Requirements:

    Improve Product Design

    Standard product configuration

    Standardize and reduce numberof parts

    Process design with productdesign

    Quality expectations

    Introduction to P/OM

    L I l i R i

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    Introduction to P/OM

    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    25

    Lean Implementation Requirements:

    Concurrently Solve Problems

    Root cause

    Solve permanently

    Team approach

    Line and specialist responsibility

    Continual education

    Introduction to P/OM

    L I l t ti R i t

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    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    26

    Lean Implementation Requirements:

    Measure Performance

    Emphasize improvement

    Track trends

    Introduction to P/OM

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    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    27

    Lean in Services (Examples)

    Organize Problem-SolvingGroups

    Upgrade Housekeeping

    Upgrade Quality

    Clarify Process Flows

    Revise Equipment and ProcessTechnologies

    Introduction to P/OM

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    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    28

    Lean in Services (Examples)

    Level the Facility Load

    Eliminate Unnecessary Activities

    Reorganize PhysicalConfiguration

    Introduce Demand-Pull

    Scheduling

    Develop Supplier Networks

    Introduction to P/OM Quality Processes

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    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    29

    Quality Processes

    A little history

    Post WWII Japanalmost a clean slate

    Limited resources, low volumes new approach

    Influences

    TWIemployees involved in process improvement

    Deming & Juran

    Poor quality is responsibility of management

    Tools for process improvement

    Formative years of TQM & JIT

    Introduction to P/OM

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    Management

    P/OM and SCM

    DSS

    QMS/OPI

    Theory of Constraints

    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM ToolsForecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    30

    Total Quality Management

    TQM is an organization-wide effort

    directed towards the continuous

    improvement of quality

    One simple definition of high quality

    is: exceeds customers

    expectations Key pointquality is tied to view of

    customer (e.g., not specifications)

    In brief

    Introduction to P/OM

    Putting TQM principles

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    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

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    31

    Putting TQM principles

    into practice

    Customer focus

    Employee empowerment

    Data-based decisionmakingmanagement by

    fact

    Continuous improvement in qualityhow?

    Introduction to P/OM

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    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

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    32

    Definitions of Quality

    Quality as Excellence

    Quality as Conformance toSpecifications

    Quality as Fitness for Use

    Quality as Value for the Price

    Introduction to P/OM

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    Information TechnologyFoundations

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    33

    Total Quality Management

    Philosophy of management Part of mission/vision/purpose

    Implemented through long range

    strategic planning

    Introduction to P/OM

    Quality Related

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    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

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    Quality Related

    Product Characteristics

    Reliability

    Durability

    Serviceability

    Introduction to P/OM

    Quality Related

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    Information TechnologyFoundations

    Demand Management

    Supply Management

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    35

    Quality-Related

    Service Characteristics

    Reliability

    Tangibles

    Responsiveness

    Assurance

    Empathy

    Introduction to P/OM

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    Information TechnologyFoundations

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    36

    Quality Specifications

    Design quality: Inherent value of theproduct in the marketplace

    Dimensions include: Performance

    Features Reliability/Durability

    Serviceability

    Aesthetics

    Perceived Quality. Conformance quality: Degree to which the

    product or service design specificationsare met

    Introduction to P/OM

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    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

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    Costs of Quality

    External Failure

    Costs

    Appraisal Costs

    Prevention Costs

    Internal FailureCostsCosts of

    Quality

    Introduction to P/OM

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    SCMDistribute

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    Information TechnologyFoundations

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    Series of standards agreed upon bythe International Organization forStandardization (ISO)

    Adopted in 1987 More than 100 countries

    A prerequisite for global

    competition?

    ISO 9000 directs you to "documentwhat you do and then do as youdocumented"

    ISO 9000

    Introduction to P/OM

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    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

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    Statistical Process Control

    39

    Six Sigma Quality

    A philosophy and setof methodscompanies use toeliminate defectsin their productsand processes

    Seeks to reduce

    variation in theprocesses thatlead to productdefects

    The name, sixsigma refers to

    the variation thatexists within plusor minus threestandarddeviations of theprocess outputs

    Introduction to P/OM

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    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM Tools

    Forecasting

    Lean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    40

    Six Sigma Quality (cont)

    Six Sigma allows managers to readilydescribe process performance using acommon metric: Defects Per MillionOpportunities (DPMO)

    1,000,000x

    No. of unitsx

    Number of defects

    =DPMO

    Number ofopportunitiesfor error perunit

    Introduction to P/OM

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    The Goal

    Introduction to Supply

    Chain Management

    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

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    41

    Example of Defects Per Million

    Opportunities (DPMO) calculation.Suppose we observe 200 lettersdelivered incorrectly to the wrongaddresses in a small city during asingle day when a total of 200,000letters were delivered. What is the

    DPMO in this situation?

    000,1== 1,000,000x

    200,000x1

    200DPMO

    So, for every onemillion lettersdelivered thiscitys postalmanagers canexpect to have1,000 letters

    incorrectly sentto the wrongaddress.

    Cost of Quality: What might that DPMO meanin terms of over-time employment tocorrect the errors?

    Six Sigma Quality (cont)

    Introduction to P/OM

    M t Six Sigma Quality:

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    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

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    Lean Manufacturing

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    Simulation

    Statistical Process Control

    42

    Six Sigma Quality:

    DMAIC Cycle

    Define, Measure, Analyze, Improve, andControl (DMAIC)

    Developed by General Electric as ameans of focusing effort on quality

    using a methodological approach Overall focus of the methodology is to

    understand and achieve what thecustomer wants

    A 6-sigma program seeks to reduce thevariation in the processes that lead tothese defects

    DMAIC consists of five steps.

    Introduction to P/OM

    M t Six Sigma Quality:

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    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

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    Production Management

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    Forecasting

    Lean Manufacturing

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    43

    Six Sigma Quality:

    DMAIC Cycle (cont)

    1. Define (D)

    2. Measure (M)

    3. Analyze (A)

    4. Improve (I)

    5. Control (C)

    Customers and their priorities

    Process and its performance

    Causes of defects

    Remove causes of defects

    Maintain quality

    Introduction to P/OM

    M t

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    SCMTransform

    SCMDistribute

    Webster Chapters

    Information TechnologyFoundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

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    Forecasting

    Lean Manufacturing

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    44

    Total Quality Requirements

    Strategic Quality Planning Clear Focus on Customer Satisfaction

    Continuous Improvement of KeyProcesses

    Effective Collection & Analysis ofInformation

    Effective Use of Teamwork and

    Training Effective Design of Products and

    Services

    Effective Leadership

    Introduction to P/OM

    Management Components of an

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    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster ChaptersInformation Technology

    Foundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

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    Forecasting

    Lean Manufacturing

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    Components of an

    OPI Culture

    OPI as Central

    Focus of

    Mission Statement

    Stakeholder

    Linkages

    Passionate

    Commitment

    to Continuous

    Improvement

    Commitment to

    Education/Training

    Team Development

    Bias Toward

    Evidence Based

    Decision

    Making

    CULTURE OF

    ONGOING

    PROCESS

    IMPROVEMENT

    Introduction to P/OM

    Management Characteristics of

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    The Goal

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    SCMAcquisition

    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster ChaptersInformation Technology

    Foundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

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    Forecasting

    Lean Manufacturing

    Project Management

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    46

    Characteristics of

    OPI Systems

    Vision/mission/purpose for quality Focus on supplier/customer

    linkages

    PASSIONATEcommitment tocontinuous improvement

    Commitment to teaming/training

    Bias for data based decisionmaking

    Introduction to P/OM

    Management Strategic Quality

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    SCMTransform

    SCMDistribute

    Webster ChaptersInformation Technology

    Foundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

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    ForecastingLean Manufacturing

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    47

    Strategic Quality

    Management

    Using the quality of products

    and services to increase a

    companys share of the market

    Introduction to P/OM

    Management Implementing TQM

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    SCMTransform

    SCMDistribute

    Webster ChaptersInformation Technology

    Foundations

    Demand Management

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    Implementing TQM

    Identify Critical Business Issues

    Secure top management commitment

    Provide initial training

    Identify customer requirements

    Identify key processes

    Provide specific skills training

    Collect and analyze data

    Change the process

    Reqmts

    met?

    Continue to improve processes

    no

    yes

    Introduction to P/OM

    Management Lean Manufacturing and

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    The Goal

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    SCMMaintain

    SCMTransform

    SCMDistribute

    Webster ChaptersInformation Technology

    Foundations

    Demand Management

    Supply Management

    Inventory Management

    Capacity Management

    Production Management

    Transportation Management

    Quality Management

    POM Tools

    ForecastingLean Manufacturing

    Project Management

    Simulation

    Statistical Process Control

    Production/OperationsManagement

    Dr. Eliot ElfnerSt. Norbert College

    Spring 2009

    Lean Manufacturing and

    Quality Processes

    The End