Materials Mgt 14Jul09

8/8/2019 Materials Mgt 14Jul09

1/50


2/50


3/50


4/50


5/50


6/50


7/50

Application of value Analysis

This attacks two aspects of the productThe use function or the ability of the product to performaccording to specThe aesthetic function, appearance or style of theproduct

Analysis: 1. The purpose of the product2. Basic/ Primary Function3. Secondary Function

7


8/50

C h ecklist Value Analysis

Select an item of high annual rupee volume( annual consumption value)Identify the functionIs the item necessary, does it add value or it can beeliminatedCan spec be made less stringent to save costCan packaging be made cheaper

8


9/50

S teps for Value Analysis

Establish the objective (cost reduction)Appoint team of people from different connectedfunctionsAnalyze the mfg processAnalyze the useDecompose and analyze characteristicsHold a brainstorming sessionSort the ideasSelect the best and develop a plan of implementation

9


10/50

B enefits of Value Analysis

Better purchasing techniquesBetter suppliers

Design modificationLower operating costsStandardization/substitutionBetter packaging

Better material handlingLower cost of maintenance

10


11/50

M aterial Requirement Plan ( M RP)

This is one of the inventory control methods for Inputmaterial requirement

This is a computer based information system designedto handle ordering and scheduling of inventoriesThe input for this control is the

M aster Production S c h eduleThis determines w h en to order and

h ow muc h to order

11


12/50

Process of M RP

Master Production Schedule is analyzed which is basedon customer commitments

The requirement of all input materials is calculatedbased on production scheduleInput materials are ordered on suppliers based on leadtime and quantity of each input material is firmed upDelivery schedule is given to suppliers based on MRP

output

12


13/50

Obj ectives of M RP

To improve customer satisfaction/service by meeting andimproving on delivery schedules promised to the

customers ( Analysis of on-time delivery)To reduce inventory costs by reducing inventory levelsTo improve plant operating efficiencyTo utilize plant capacity fully by highlighting spare

capacities

13


14/50

B enefits of M RP

Accurate planning of input materials requirementAccurate ordering on suppliers based on computation of MRP softwareAccurate Capacity planningHighlights spare capacity and overloading of machinesAlteration of delivery commitments if required

Accurate inventory control

14


15/50

M RP S ystem Output

Order schedule plan for input materialsChanges in planned orders

Exception items to draw attentionSystem performance reportStock out reportsDelivery promises keptInventory forecasts

15


16/50

K ANB AN

What is Kanban?Kan means visual and ban means a card (signboard)

This is one of the techniques to control inventoryThis is generally used for sub-components which arerequired for main assembly of the componentKanban means a signboard or billboardand is aconcept related to JIT systemThis signboard indicates a requirement and is known aspull system of requirement (MRP)A communication tool in JIT production and controlsystemDesignates a pull production means of communicatingneed for product or service

16


17/50

K an b an

It is a system of continuous supply of components, partsand supplies, such that workers have what they need,where they need it, when they need itKanban is directly associated with JIT delivery

However, Kanban is not another name for JIT deliveryIt is a part of larger JIT systemThere is more to managing a JIT system than just

Kanban and there is more to Kanban than just inventory

management

17


18/50

K an b an

Let us take an example of a car assembly line where 100cars are manufactured everydayHence 100 carburetors are required everydayThese 100 carburetors come on a pallet from mfg line

There are two boxes or bins , each can take 100carburetors , bin A and bin BWhen the empty bin A comes back to mfg line meansthe assembly line needs the filled boxWhile the empty bin A is being filled by mfg 100 newcarburetors, the assembly line is using the carburetorsfrom the bin B in the meantimeWhen the bin B gets empty , it is sent to mfg line for arefill, This keeps repeating and assembly line gets the

filled bin as and when they need ( JIT ) 18


19/50

Pull / K an b an S ystems

Pull / K an b an is a method of controlling the flow of production through the factory based on a customersdemand.Pull Systems control the flow of resources in a

production process by replacing only what has beenconsumed.They are customer order-driven production schedulesbased on actual demand and consumption rather thanforecasting.Implementing Pull Systems can help you eliminate wastein handling, storing, and getting your product to thecustomer. Pull Systems are an excellent tool to use inthe areas where cellular or flow manufacturing can not

be achieved. 19


20/50

B enefits of K an b an system

It reduces inventory in the system by mfg the exactquantity that is required and the quantity is not based ondemand forecastIt eliminates product obsolescence as the mfg is done

only to the extent of the quantity that is required toexecute the orders on handIt ensures implementation of JIT systemIt helps to implement Kaizen system

Reduces waste and scrapIt provides flexibility to respond rapidly to changingdemandReduces total cost by preventing overproduction

20


21/50

K AIZEN

It is a system of continuous improvement in

quality

technologyprocessescompany cultureproductivitysafetyleadership

21


22/50

K AIZEN

Kaizen is focused on making small improvementson a continuous basis and finding creative solutionsinstead of capital expenditures

K AIto c h ange or modifyZEN..to improve

=modify to improve

22


23/50

Wh at is K aizen

Kaizen is a system in which every employee isencouraged to come up with small improvementsuggestions in their area of work on a regular basisThis is a continuous exercise

60/70 suggestions per employee per year are writtendown, shared and implemented

23


24/50

Process of K aizen

Ideas are not for major changesIdeas are little changes on a regular basis

always improving productivity, safety and effectivenessand reducing waste

To support the higher standards, Kaizen also involvesproviding the training, materials and supervision neededfor employees to achieve higher standards

24


25/50

Elements of K aizen

Quality CirclesImproved MoraleTeamworkPersonal discipline

Suggestions for Improvement

Happy employee is a Productive Employee

25


26/50

F IVE S Program

Sort (clean up)Systematize (organize)Sweep (regular cleaning)

Standardize (simplify)Self Discipline

26


27/50

K aizen Pro b lem S olving Tools

Pick a project (Pareto Principle)Gather data (Histogram and control chart)Find cause (Process flow diagram and fish bonediagram), BrainstormPick likely causes, seven deadly wastagesTry solution (PDCA), plan do c h eck act Implement solutionMonitor resultsStandardize on new process

27


28/50

K aizen v/s Innovation

Small improvementsFair knowledge

Personal involvement

Many people

Improve the processEven in slow economy

Major improvementsTechnology or equipment

Money investment

A few champions

Improve resultsMainly in good economy

28


29/50

S teps to Implement K aizen

Discard conventional fixed ideasThink how to do it, not why it cant be doneStart by questioning current practicesDo it right way, if you make a mistake, correct it

Do not spend money for Kaizen, use your wisdomFind root cause of the problemSeek wisdom of 10 peopleKaizen ideas are infinite

29


30/50

B enefits of K aizen

Involves every employee in making a changeFocuses on identifying problems at their source andaddresses seven deadly wastagesContinual small changes add up to major immediate

benefitsResults: Improved productivity, quality, safety, faster delivery, lower costs and greater customer satisfaction

30


31/50

JUS T IN TI M E ( J IT)

JIT means just in time hence no wastagesINPUTProcessoutputProcess has wastages like scrap , waiting

Process is a summation of activities suchas operation, inspection, delays, storage,transport and everything else that happens

between the beginning and end of theprocessOperation does not include inspection and

other delays31


32/50

OPERATI ON

There are two types of operations:1. DO2. Make ready

Warming up an iron till it reaches desired temp is MakeReady operationIroning is a Do operation

32


33/50

S EVEN DEADLY W AS TAGE S

Waste arising from -

1. Over producing2. waiting

3. Transporting and unnecessary motion4. Processing; Cpk5. Unnecessary stock on hand6. Producing defective goods7. Time spent in changeover of setup

33


34/50

M anagement Orientation

Process Oriented v/s Result OrientedProcess oriented mgmt: keep doing th ings rig h t firsttime result good automaticallyConcentrate on causes , ensure that the causes operate

as per designConcentrate on perfecting the causes in the processResult oriented: get good profit , I dont care How

34


35/50

Value Added Activities

VA activities add value to the productDo operations are VA items, the rest are non VAactivitiesAmount of time spent on NVA exceeds the time on VA

activitiesResult oriented mgmt attacks VA activities to make themmore efficient in the belief that VA activities matter most.This way they lose more than what was gained, due toNVA

35


36/50

NVA Activities

NVA activities should be eliminated or made efficient in terms of timeMany companies have increased

production and simultaneously increasedinventoriesWastage deals with time, loss of time,

increases throughput time , i.e. timebetween getting an order to realization of money

36


37/50

TQ M

TQM is a combination of JIT, TQC ,TPM, Kaizen, PokayokeToday many Japanese companies work

with zero breakdowns, zero defects, zeroaccidents and zero speed lossFaster information flow brings down the

lead time and lesser need to maintainhigh inventory

37


38/50

Pokayoke

To avoid inadvertent errorsSystematic technique to avoid errors atwork

Briefcase upside downAutoriksha Rod on the right sideSockets 5 amp and 15 amp

Connectors of computersInterlocking limit switch microwave if you open the door the micro will stop

38


39/50

S QC and S P C

Statistical Quality ControlStatistical Process ControlProduct Quality has two aspects

a) Controlling

b) VerifyingOld Method: Inspection only sorts out

OK and REJECTED productsThis can neither improve Quality of the product nor

prevent the Rejection from recurring henceInspection is not Q U ALITY C ONTR OL

39


40/50

C ontrolling

ACT>>>>PLAN>>>>DO>>>>>CHECK>>>>ACTThis is called PDCA CycleEvery function of the co contributes to achieve requiredproduct quality at economic cost

Checking of quality is assigned to the workers who makethe productReturning inspection to its origin

40


41/50

Verifying

Means verifying the variations which need to becontrolledHigher the variability inferior is the qualityStatistical Techniques help to measure the variabilityInputs..controllable/uncontrollable..process..measurement, evaluation, controls.outputThe sources of variation: MEN, MACHINE MATERIAL,METHOD and MEASUREMENT

41


42/50

Types of Variations

C h ance causes (natural causes or uncontrollablecauses)Assigna b le causes ( unnatural causes or controllablecauses)

When variation is due to chance causes the process isunder control or stableWhen the variation is due to assignable causes theprocess is out of control

42


43/50

Principles of S P C

1. No two things are exactly alike2. Variation can be measured3. Things vary according to a definite pattern

4. Large no of measurement cluster aroundmiddle5. It is possible to determine the shape of

distri b ution curve

6. Variation due to assignable causes distort thenormal distribution curve

43


44/50

Normal Distri b ution curve

When we measure each piece from a machine or anoperation and make a Tally of measurements, we shallhave a curve which is called a normal distribution curveIf we do not measure each piece, but collect somepieces and measure, then chances are:= 68% (34+34) + or minus 1sigma=28% (14+14) + or minus 2 sigma= 4% (2+2) + or minus 3 sigma

Most measurements tend to cluster around the middle of this bell shaped curve

44


45/50

Pro b lem S olving Tec h niquesQuality Tools

Flow Diagram.. process flowBrainstorming.. involve many peopleData collection..actual data for statistical analysisGraphs. to get the trend

Stratification segregate the dataCause and effect Diagramto find root causePareto charts to differentiate vital fewScatter Diagrams .to find relationship between variablesHistogram. to study process capabilityControl Charts for online QC

45


46/50

S ix S igma

Six Sigma- (The statistical Representation) is aprocess of Quality measurement, which helpsthe organization in the improvement of their QualitySix Sigma is a systematical process which helpsthe organization to eleminate the defects whichprevent it from reaching perfectionSix Sigma ensures the QC, TQM and ZeroDefect

When a process attains six sigma level it meansthat there is no room for the product to failSix sigma is professionalizing of the QualityManagement functions


47/50

SigmaSigmaLevelLevel

% Good% Good PPM/DPPPM/DPMOMO

Cost of Quality as % ofCost of Quality as % ofSalesSales

22 95.4595.45 4550045500 Over 40%Over 40%

33 99.7399.73 27002700 2525 - - 40%40%

44 99.993799.9937 63 63 1515 - - 25%25%

55 99.99994399.999943 0.570.57 5 5 -- 15%15%

66 99.99999999.99999988

0.0020.002 Less than 1%Less than 1%


48/50


49/50

Total Quality M anagement

Total : Involve all functions to have customer focus andgive reliable delivery of product+service in line withcustomers expectations at lowest cost

Quality : Design and manufacture the product+service toachieve zero defect and 100% customer satisfaction

M anagement : Lead to achieve quality for customers bycommunicating the vision, mission and values to allemployees and creating continuous improvement culture


50/50

50

Materials Mgt 14Jul09

Documents