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PRODUCTION OPERATIONS MANAGEMENT
P M
By: ZAHID HUSSAIN
M Phil: Total Quality Management
Lead Auditor 5-SIRCA Lead Auditor ISO-9001-2000
IRCA Lead Auditor ISO-14000-2004IRCA Lead Auditor OHSAS 18000-2007
B. Sc Engineering (Chemical)
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Value Addition
Process Velocity = Throughput time
Value-added time-Throughput time = Average time for a unit tomove through the entire process.
- Value added time = the useful work actuallybeing done on the unit.
Value added work
Value-added work is utilizing resources that addvalue to the finished product, whether it's
actually building a product or shipping it.
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-Three factors for work to be considered as
value-added,
Capacity. The employees and tools used musthave the necessary capacity to perform the work
and add value to it.Information/Instructions. The workers must havethe proper information and instructions neededto complete the job with as little non-value added
work, or waste, as possible.Materials. This refers to the materials required to
properly complete the work.
Non value added work - Example
Value Addition
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Non value work Non-value added work, also called waste, refers
to work that doesn't add value to or is
unnecessary for the overall project.
Operation manager have to Eliminate non-value added work
Increasing their value-added work
How to accomplish this.
First evaluate the practices used, to identify any
non-value added work
Take steps to reduce
Monitor , measure and improve constantly.
Value Addition
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Business Process
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What We do in a Business Process?
Adding Value through a
Value-Added activity
Or
Generating Waste or MUDA through a
Non-Value-Added activity
Non-value activities adds up to the cost
Waste is anything other than the minimum amount ofequipment, materials, parts, space, and workers time,
which are absolutely essential to add value to the product.
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Organizations Value Stream
Process-1 V
W
Process-2 V
W
Process-3 V
W
Process-4
W
ProductV
Input
It is a network of different Business Processes.
V: Value added product/servicesW: Wasteful product / practices/services that does not add value
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Economic Value of Waste
Every business activity absorbsresources and every resource has acost
Every waste has a cost, and that isdirect loss to the company.
Economic value of waste in a process
industry are in the range of 10 -35%of annual turnover
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Integrated Quality
Quality
CustomerRequirements
ProcessCapability
Cost
Selling Price
Production Cost
Delivery
CustomerSchedule
Process Speed
Supplier
Customer
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Waste : the value destroyers
Quality
Customer
Requirements
ProcessCapability
Cost
Selling Price
Production Cost
Delivery
Customer
Schedule
Process Speed
Supplier
Customer
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OBJECTIVES of Improvement Initiatives
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OBJECTIVES of Improvement Initiatives
ImprovedProfitability
Enhanced Competitiveness
QUALI
TY
COST
effectiveness
DELIV
ERY
Improvement Initiatives
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Increasing Profit by Increasing Price
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Increasing Profit by reducing Cost
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Changing the performance level
Current State
Future State
Perfo
rmancelevel
Time frame
Ideal State
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Unnecessary Motions
Waiting for work and materials
TransportationsOverproduction
Processing
Inventories / Unnecessary WIP
Corrective operation
7 Seven MUDA [Wastes]
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Movement that does not add value:
Searching for files
Extra clicks or key strokes
Clearing away files on the desk
Gathering informationLooking through manuals and catalogs
Handling paperwork
MUDA of Motion [1/7]
using unnecessary movement and energy
used to perform tasks.
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Idle time created when material, information,people or equipment is not ready.
Waiting for:
Faxes
The system to come back
Copier machine
Customer response
A handed off file to come back
MUDA of Waiting [2/7]
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Movement of information that doesnot add value:
Carrying documents to and frofrom shared equipment
Taking files to another person
Going to get signatures
MUDA of Transport [3/7]
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Generating more information than thecustomer needs right now:
More information than the customerneeds
Creating reports no one reads
Making extra copies
More information than the next
process needs
MUDA of Over production [4/7]
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MUDA of Process
1. Using more expensiveequipment or tools where
simpler ones would
suffice.2. Having meetings that are
not needed.
3. Having people at
meetings that are notrequired.
4. Agenda points, not to be
included;
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Efforts that create no value from thecustomer viewpoint:
Creating reports
Repeated manual entry of data
Excessive paperwork
Use of outdated standard forms
Use of inappropriate software
MUDA of Process
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More information, project, material onhand than the customer needs right now:
Files waiting to be worked on
Open projects
Office supplies
E-mails waiting to be read
Unused records in the database
MUDA of Inventory [6/7]
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Rule of 10
Prevention:Correction:Failure
= 1:10:100
100
10
1
Why Repair/Replacement inWarranty period be a MUDA?
MUDA of Correction [7/7]
Prevention is always
cheaper.
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Work that contains errors, rework,mistakes or lacks something necessary:
Data entry error
Pricing errorMissing information
Missed specifications
Lost recordsRework
Rescheduling meetings
7/7 Wastes of Information
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Value Added time:
What the customer is willing to pay for
Tea Breaks, Lunches,TrainingEducation,
Waste Elimination
37%
13%
50%
Non Value added work
Unnecessary motion
Material handling
Waiting time
Rework/ scrape
Unnecessary part
processing
Excess inventory
Over Production`
13%
89%
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For Better Productivity
Understand the different typesof waste and get into the habit
of pointing out examples ofthem every day.'
S & i i
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Average Organization=Great Organization +MUDA
Great Organization= Average Organization - MUDA
Success & Happiness Equations
Humans=God +MUDA
God= Humans - MUDA
Good to Great Journey
Happiness Journey
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QUESTIONS
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