Operation Analysis 1

• Operation Planning and Control

• Quality Control

Operation Planning and Control

Outline:Outline:

• What is Supply Chain?What is Supply Chain?• Production and Operation AnalysisProduction and Operation Analysis• Warehousing and LogisticsWarehousing and Logistics• Human FactorsHuman Factors

What Is Supply Chain?

Supply Chain is …Supply Chain is …

Supply Chain Management is …Supply Chain Management is …

Supply Chain Entities are …Supply Chain Entities are …

Operation Planning Control

Demand Forecasting Demand Forecasting Operations PlanningOperations PlanningInventory Planning & ControlInventory Planning & ControlOperation SchedulingOperation SchedulingDispatching and Progress ControlDispatching and Progress Control

Dispatching, Data Acquisition, Dispatching, Data Acquisition, Corrective Action, Measure of Corrective Action, Measure of EffectivenessEffectiveness

Just-In-Time (JIT)

““Stockless ProductionStockless Production””Method to reduce inventory levelMethod to reduce inventory level

Requirements:Requirements:Smooth Material FlowSmooth Material FlowReduced Setup TimeReduced Setup TimeReduced Supplier Lead TimeReduced Supplier Lead TimeZero-Defect ComponentsZero-Defect ComponentsDisciplined Shop Floor ControlDisciplined Shop Floor Control

Material Handling, Distribution, and

Routing

Material HandlingEquipment ConceptsEquipment ConceptsConveyors, industrial trucks, cranes and hoists, Conveyors, industrial trucks, cranes and hoists, containers and racks, elevators and lifts, Automatic containers and racks, elevators and lifts, Automatic Storage and Retrieval System (ASRS), and Automatic Storage and Retrieval System (ASRS), and Automatic Guided Vehicles (AGV)Guided Vehicles (AGV)

Principles of Material HandlingPrinciples of Material HandlingPlanning, systems, material flow, simplification, gravity, Planning, systems, material flow, simplification, gravity, space utilization, unit size, mechanization and space utilization, unit size, mechanization and automation, equipment selection process, automation, equipment selection process, standardization, adaptability, dead weight, utilization, standardization, adaptability, dead weight, utilization, maintenance, control, obsolescence, capacity, maintenance, control, obsolescence, capacity, performance, and safety principles. performance, and safety principles.

Quantitative TechniquesQuantitative TechniquesTransportation programming, Assignment technique, and Transportation programming, Assignment technique, and Hungarian MethodHungarian Method

ASRS Picture

AGV Picture

DistributionWarehouse Location Warehouse Location • Analytical technique: tediousAnalytical technique: tedious• Easier: simulationEasier: simulation

Operations ManagementOperations Management • Routing Routing • Logistic Systems (adequate inventories Logistic Systems (adequate inventories

of FG, supplying WH, and customers in of FG, supplying WH, and customers in an efficient and effective way)an efficient and effective way)

Extra Information for Material Handling

BUCKET BRIGADEBUCKET BRIGADEA way of organizing workers on a flow line so that the line A way of organizing workers on a flow line so that the line balances itselfbalances itself

(Prof. Bartholdi, Georgia Institute of Technology)(Prof. Bartholdi, Georgia Institute of Technology)

BenefitsBenefits::• A reduced need for planning and management A reduced need for planning and management

(“Self Balancing”)(“Self Balancing”) • Production becomes more flexible and agile Production becomes more flexible and agile

(“Self Tuning”)(“Self Tuning”)• Throughput is increased Throughput is increased

(“Spontaneously optimal division of work”)(“Spontaneously optimal division of work”)• Reduced 2ndary labor and improved quality Reduced 2ndary labor and improved quality (“Min WIP”)(“Min WIP”) • Training and coordination are simplified because it is easy for workers to Training and coordination are simplified because it is easy for workers to

know what to do next know what to do next

Role-Play Time!!

Question: Question: Our class is opening a Virtual Factory Our class is opening a Virtual Factory currently employed 4 workers. currently employed 4 workers. – Pick up the rubber band using a pin, pencil-Pick up the rubber band using a pin, pencil-

chopstick, ruler, and handchopstick, ruler, and hand– Put check mark on the items you have Put check mark on the items you have

pickedpicked

We have a stack of orders. Each order We have a stack of orders. Each order requires different amount for different requires different amount for different items. How can we improve the system?items. How can we improve the system?

Bucket Brigade

Position: Position: Slowest Slowest Fastest Fastest

Whenever the fastest finishes a product:Whenever the fastest finishes a product:Push off the order Push off the order

Walk back to take over the work of his Walk back to take over the work of his predecessorpredecessor

Predecessor walks back and so on, until the Predecessor walks back and so on, until the first worker walks back to start a new productfirst worker walks back to start a new product

Work is "pulled" into the system by the last, Work is "pulled" into the system by the last, fastest workerfastest worker

What Did We Learn?

Beginning: out of balanceBeginning: out of balance

Afterward: quickly gravitate to the Afterward: quickly gravitate to the optimum partition of workoptimum partition of work

Quality Management

OutlineQuality Management DefinitionQuality Management Definition

Quality Control ConceptsQuality Control Concepts

Quality Dimension and CostQuality Dimension and Cost

The Seven Tools of Quality The Seven Tools of Quality Control MethodsControl Methods

Quality ImprovementQuality Improvement

Quality Management DefinitionDefinitionDefinitionQuality managementQuality management is a method for ensuring that all the is a method for ensuring that all the activities necessary to design, develop and implement a activities necessary to design, develop and implement a product or service are effective and efficient with respect product or service are effective and efficient with respect to the system and its performance.to the system and its performance.

Quality Management can Be considered to have Quality Management can Be considered to have three main components:three main components:

• Quality ControlQuality Control• Quality Assurance Quality Assurance • Quality ImprovementQuality Improvement

Focus: product / service quality, System / ProcessFocus: product / service quality, System / Process

The Differences…Quality Quality ControlControl: : is the ongoing effort to is the ongoing effort to maintain the integrity of a process to maintain the maintain the integrity of a process to maintain the reliability of achieving an outcome.reliability of achieving an outcome.

Quality Quality AssuranceAssurance: : is the planned or is the planned or systematic actions necessary to provide enough systematic actions necessary to provide enough confidence that a product or service will satisfy confidence that a product or service will satisfy the given requirements for quality.the given requirements for quality.

Quality Quality Improvement: Improvement: is the purposeful is the purposeful change of a process to improve the reliability of change of a process to improve the reliability of achieving an outcome.achieving an outcome.

Quality ConceptsW. Edward DemingW. Edward Deming

85% of quality problems within an 85% of quality problems within an organization or a company is a management organization or a company is a management responisbility. This is well known as the responisbility. This is well known as the “common causes”.“common causes”.Introduced 14 points of management Introduced 14 points of management obligations in order to produce successfully. obligations in order to produce successfully. Suppliers must be evaluated based on both Suppliers must be evaluated based on both price and quality.price and quality.The use of customer input to derive quality The use of customer input to derive quality requirements. requirements. Mass inspection should only be used for Mass inspection should only be used for critical opeartions. critical opeartions.

Quality Concepts (Cont’d)

Joseph M. JuranJoseph M. JuranIntroduced the concept of Quality as “fitness Introduced the concept of Quality as “fitness for use” including quality of design, for use” including quality of design, conformance, and performance, all conformance, and performance, all parameters of fitmess for use. parameters of fitmess for use.

Introduced Quality Cost Model and emphasize Introduced Quality Cost Model and emphasize the importance of maintaining good vendor the importance of maintaining good vendor relations. relations.

Companies must undertsand the needs of their Companies must undertsand the needs of their customers. Company waste must be reduced.customers. Company waste must be reduced.

Companies need to do things right the first Companies need to do things right the first time.time.

Quality Concepts (Cont’d)

Philip B. CrosbyPhilip B. CrosbyDefinition of Quality: Conformance to Definition of Quality: Conformance to requirements. Every individual produce requirements. Every individual produce product / service and has customers. The product / service and has customers. The individual is a customer of someone else.individual is a customer of someone else.Quality achievement is a rational approcah Quality achievement is a rational approcah through preventing the occurence of through preventing the occurence of defects or errors. defects or errors. Standard performance: zero defects (no Standard performance: zero defects (no errors allowed)errors allowed)Measuring Parameter: quality cost, the Measuring Parameter: quality cost, the sum of all costs a company invests into the sum of all costs a company invests into the release of quality product or service.release of quality product or service.

Quality Dimension in Manufacturing

• Performance: Performance: the conformance of product to its primary the conformance of product to its primary function. function.

• Feature:Feature: the specific attribute of a product the specific attribute of a product • Reliability: Reliability: the ability of a product to perform and maintain the ability of a product to perform and maintain

its function in routine circumstances. its function in routine circumstances. • Conformance:Conformance: the ability of a product to meet certain the ability of a product to meet certain

requirements or standar tha has been determinedrequirements or standar tha has been determined• Durability:Durability: product’s ability to endure its usable life over a product’s ability to endure its usable life over a

long period of time.long period of time.• Servicability:Servicability: the ease to repair a product and the ease of the ease to repair a product and the ease of

obtaining replecement of broken or damaged components. obtaining replecement of broken or damaged components. • Aesthetic:Aesthetic: the philosophical notion of the beauty of a the philosophical notion of the beauty of a

product. product. • Perception:Perception: product’s image that has to do with customer’s product’s image that has to do with customer’s

fanatism and loyalty that will trigger repeat orders / fanatism and loyalty that will trigger repeat orders / buyers.buyers.

Quality CostExpenditure in manufacturing or service that is Expenditure in manufacturing or service that is in excess of that which would have been in excess of that which would have been incurred if the product had been built exactly incurred if the product had been built exactly right the first time. right the first time. IncludingIncluding: : quality planningquality planning, production design, , production design, processing, training, information on quality processing, training, information on quality parameters, inspection, and testing equipment.parameters, inspection, and testing equipment. Also included in quality cost: scrap, rework, Also included in quality cost: scrap, rework, process failure, process delay, discounted process failure, process delay, discounted selling price, customer’s compalin, product selling price, customer’s compalin, product claim, warranty claim, legal claim and (market claim, warranty claim, legal claim and (market loss).loss).

The Seven Tools of Quality

Cause and Effect (Fishbone Diagram)Cause and Effect (Fishbone Diagram)

Check Check SheetSheet

The Seven Tools of Quality

Control ChartControl Chart HistogramHistogram

The Seven Tools of Quality

Pareto ChartPareto Chart

Scatter Scatter DiagramDiagram

The Seven Tools of Quality

Stratification: A technique that Stratification: A technique that separates data gathered from a separates data gathered from a variety of sources so that patterns variety of sources so that patterns can be seen (some lists replace can be seen (some lists replace "stratification" with "flowchart" or "stratification" with "flowchart" or "run chart“)."run chart“).

Quality Improvement Methods

ISO 9001ISO 9001Quality Funfction Deployment (QFD)Quality Funfction Deployment (QFD)Kaizen (continual improvement)Kaizen (continual improvement)Six Sigma (based on SPC)Six Sigma (based on SPC)PDCA (plan-do-check-act)PDCA (plan-do-check-act)Quality CircleQuality CircleTaguchi MethodTaguchi MethodToyota Production System (adapted to become Toyota Production System (adapted to become Lean Manufacturing)Lean Manufacturing)Total Quality Management (TQM)Total Quality Management (TQM)BPR – Business process reengineeringBPR – Business process reengineering

Total Quality Management

TQM is a management approach for an organization, TQM is a management approach for an organization, centered on quality, based on the participation of all centered on quality, based on the participation of all its members and aiming at long-term success its members and aiming at long-term success through customer satisfaction, and benefits to all through customer satisfaction, and benefits to all members of the organization and to society.members of the organization and to society.

TQM is a management strategy aimed at embedding TQM is a management strategy aimed at embedding awareness of quality in all organizational processes. awareness of quality in all organizational processes. TQM has been widely used in manufacturing, TQM has been widely used in manufacturing, education, call centers, government, and service education, call centers, government, and service industries, as well as NASA space and science industries, as well as NASA space and science programs.programs.

It is aimed to reduce variation from every process so It is aimed to reduce variation from every process so that greater consistency of effort is obtained.that greater consistency of effort is obtained.

TQM Roles in Company

ImageImage

SavingSaving

Increase Market ShareIncrease Market Share

Product accountabilityProduct accountabilityExport Opportunity

Quality Management Planning

Design and Build: including structure, process Design and Build: including structure, process dan its implementation by top management. dan its implementation by top management.

Deployment: Processes are broken down into Deployment: Processes are broken down into documented sub-processes, supported by documented sub-processes, supported by institution of training related to each particular institution of training related to each particular sub-process.sub-process.

Control.Control.

Measurement.Measurement.

Review.Review.

Improvement.Improvement.