Page 1
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Production/Operations Management
Dr. Eliot Elfner
St. Norbert College
Spring 2009
Lean Manufacturing and Quality Processes
Page 2
2
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
TOPICS
• Discussion of topics– Lean Manufacturing– Quality Processes
Page 3
3
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Lean Production
• Lean Production can be defined as an integrated set of activities designed to achieve high-volume production using minimal inventories (raw materials, work in process, and finished goods)
• Lean Production also involves the elimination of waste in production effort
• Lean Production also involves the timing of production resources (i.e., parts arrive at the next workstation “just in time”)
Page 4
4
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
The Toyota Production System
• Based on two philosophies:– 1. Elimination of waste
– 2. Respect for people
Page 5
5
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Elimination of Waste
1. Focused factory networks
2. Group technology
3. Quality at the source
4. JIT production
5. Uniform plant loading
6. Kanban production control system
7. Minimized setup times
Page 6
6
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
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)
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 as 1000 employees
Some plants in Japan have as few as 30 and as many as 1000 employees
Page 7
7
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Minimizing Waste:Group Technology (Part 1)
• Using Departmental Specialization for plant layout
can cause a lot of unnecessary material movement • Using Departmental Specialization for plant layout
can cause a lot of unnecessary material movement
Note how the flow lines are going back and forth
Note how the flow lines are going back and forth
Saw Saw
Lathe PressPress
Grinder
LatheLathe
Saw
Press
Heat Treat
Grinder
Page 8
8
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Minimizing Waste: Group Technology (Part 2)
• Revising by using Group Technology Cells can reduce movement and improve product flow
• Revising by using Group Technology Cells can reduce movement and improve product flow
Press
Lathe
Grinder
Grinder
A
2
BSaw
Heat Treat
LatheSaw Lathe
PressLathe
1
Page 9
9
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
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.
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?How does the uniform loading help save labor costs?
Page 10
10
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Minimizing Waste: Inventory Hides Problems
Work inprocess queues(banks)
Changeorders
Engineering designredundancies
Vendordelinquencies
Scrap
Designbacklogs
Machine downtime
Decisionbacklogs
Inspectionbacklogs
Paperworkbacklog
Example: By identifying defective items from a vendor early in the production process the downstream work is saved
Example: By identifying defective work by employees upstream, the downstream work is saved
Page 11
11
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Minimizing Waste: Kanban Production Control Systems
Storage
Part AMachine Center Assembly
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 from Storage
Production kanban
Storage
Part A
Page 12
12
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Determining the Number of Kanbans Needed
• Setting up a kanban system requires determining the number of kanbans cards (or containers) needed
• Each container represents the minimum production lot size
• An accurate estimate of the lead time required to produce a container is key to determining how many kanbans are required
Page 13
13
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
The Number of Kanban Card Sets
• k = Number of kanban card sets (a set is a card)• D = Average number of units demanded over some
time period• L = lead time to replenish an order (same units of
time as demand)• S = Safety stock expressed as a percentage of
demand during leadtime• C = Container size
k = Expected Demand During Lead Time + Safety Stock
Size of the Container
k =DL(1+S)
C
Page 14
14
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Example of Kanban Card Determination: Problem Data
• A switch assembly is assembled in batches of 4 units from an “upstream” assembly area and delivered in a special container to a “downstream” control-panel assembly operation
• The control-panel assembly area requires 5 switch assemblies per hour
• The switch assembly area can produce a container of switch assemblies in 2 hours
• Safety stock has been set at 10% of needed inventory
Page 15
15
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
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
Page 16
16
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Respect for People
• Level payrolls
• Cooperative employee unions
• Subcontractor networks
• Bottom-round management style
• Quality circles (Small Group Involvement Activities or SGIA’s)
Page 17
17
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Toyota Production System’sFour Rules
1. All work shall be highly specified as to content, sequence, timing, and outcome
2. Every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses
3. The pathway for every product and service must be simple and direct
4. Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization
Page 18
18
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
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
Page 19
19
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Lean Implementation Requirements: Total Quality Control
• Worker responsibility
• Measure SQC
• Enforce compliance
• Fail-safe methods
• Automatic inspection
Page 20
20
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Lean Implementation Requirements: Stabilize Schedule
• Level schedule
• Underutilize capacity
• Establish freeze windows
Page 21
21
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Lean Implementation Requirements: Kanban-Pull
• Demand pull
• Backflush
• Reduce lot sizes
Page 22
22
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Lean Implementation Requirements: Work with Vendors
• Reduce lead times
• Frequent deliveries
• Project usage requirements
• Quality expectations
Page 23
23
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Lean Implementation Requirements: Reduce Inventory More
• Look for other areas
• Stores
• Transit
• Carousels
• Conveyors
Page 24
24
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Lean Implementation Requirements: Improve Product Design
• Standard product configuration
• Standardize and reduce number of parts
• Process design with product design
• Quality expectations
Page 25
25
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Lean Implementation Requirements: Concurrently Solve Problems
• Root cause
• Solve permanently
• Team approach
• Line and specialist responsibility
• Continual education
Page 26
26
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Lean Implementation Requirements: Measure Performance
• Emphasize improvement
• Track trends
Page 27
27
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Lean in Services (Examples)
• Organize Problem-Solving Groups
• Upgrade Housekeeping
• Upgrade Quality
• Clarify Process Flows
• Revise Equipment and Process Technologies
Page 28
28
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Lean in Services (Examples)
• Level the Facility Load
• Eliminate Unnecessary Activities
• Reorganize Physical Configuration
• Introduce Demand-Pull Scheduling
• Develop Supplier Networks
Page 29
29
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Quality ProcessesA little history
• Post WWII Japan – almost a clean slate
– Limited resources, low volumes new approach
• Influences
– TWI – employees involved in process improvement
– Deming & Juran
• Poor quality is responsibility of management
• Tools for process improvement
Formative years of TQM & JIT
Page 30
30
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
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 point—quality is tied to view of
customer (e.g., not specifications)
In brief…
Page 31
31
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Putting TQM principlesinto practice
Customer focus
Employee empowerment
Data-based decision making – “management by fact”
Continuous improvement in quality – how?
Page 32
32
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Definitions of Quality
• Quality as “Excellence”• Quality as “Conformance to
Specifications”• Quality as “Fitness for Use”• Quality as “Value for the Price”
Page 33
33
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Total Quality Management
• Philosophy of management
• Part of mission/vision/purpose
• Implemented through long range strategic planning
Page 34
34
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Quality Related Product Characteristics
• Reliability
• Durability
• Serviceability
Page 35
35
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Quality-Related Service Characteristics
• Reliability
• Tangibles
• Responsiveness
• Assurance
• Empathy
Page 36
36
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Quality Specifications
• Design quality: Inherent value of the product in the marketplace
– Dimensions include: • Performance
• Features
• Reliability/Durability
• Serviceability
• Aesthetics
• Perceived Quality.
• Conformance quality: Degree to which the product or service design specifications are met
Page 37
37
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Costs of Quality
External Failure Costs
Appraisal Costs
Prevention Costs
Internal FailureCosts
Costs ofQuality
Page 38
38
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
• Series of standards agreed upon by the International Organization for Standardization (ISO)
• Adopted in 1987
• More than 100 countries
• A prerequisite for global competition?
• ISO 9000 directs you to "document what you do and then do as you documented"
ISO 9000
Page 39
39
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Six Sigma Quality
A philosophy and set of methods companies use to eliminate defects in their products and processes
Seeks to reduce variation in the processes that lead to product defects
The name, “six sigma” refers to the variation that exists within plus or minus three standard deviations of the process outputs
Page 40
40
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Six Sigma Quality (con’t)
• Six Sigma allows managers to readily describe process performance using a common metric: Defects Per Million Opportunities (DPMO)
1,000,000 x
No. of units x
Number of defects
DPMO
Number of opportunities for error per unit
Page 41
41
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Example of Defects Per Million Opportunities (DPMO) calculation. Suppose we observe 200 letters delivered incorrectly to the wrong addresses in a small city during a single day when a total of 200,000 letters were delivered. What is the DPMO in this situation?
Example of Defects Per Million Opportunities (DPMO) calculation. Suppose we observe 200 letters delivered incorrectly to the wrong addresses in a small city during a single day when a total of 200,000 letters were delivered. What is the DPMO in this situation?
000,1 1,000,000 x
200,000 x 1
200DPMO
000,1 1,000,000 x
200,000 x 1
200DPMO
So, for every one million letters delivered this city’s postal managers can expect to have 1,000 letters incorrectly sent to the wrong address.
So, for every one million letters delivered this city’s postal managers can expect to have 1,000 letters incorrectly sent to the wrong address.
Cost of Quality: What might that DPMO mean in terms of over-time employment to correct the errors?
Cost of Quality: What might that DPMO mean in terms of over-time employment to correct the errors?
Six Sigma Quality (con’t)
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42
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Six Sigma Quality:DMAIC Cycle
• Define, Measure, Analyze, Improve, and Control (DMAIC)
• Developed by General Electric as a means of focusing effort on quality using a methodological approach
• Overall focus of the methodology is to understand and achieve what the customer wants
• A 6-sigma program seeks to reduce the variation in the processes that lead to these defects
• DMAIC consists of five steps….
Page 43
43
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Six Sigma Quality:DMAIC Cycle (con’t)
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
Page 44
44
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Total Quality Requirements
• Strategic Quality Planning• Clear Focus on Customer Satisfaction• Continuous Improvement of Key
Processes• Effective Collection & Analysis of
Information• Effective Use of Teamwork and
Training• Effective Design of Products and
Services• Effective Leadership
Page 45
45
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Components of anOPI Culture
OPI as CentralFocus of
Mission Statement
StakeholderLinkages
Passionate Commitment
to Continuous Improvement
Commitment toEducation/TrainingTeam Development
Bias TowardEvidence Based
DecisionMaking
CULTURE OFONGOINGPROCESS
IMPROVEMENT
Page 46
46
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Characteristics ofOPI Systems
• Vision/mission/purpose for quality
• Focus on supplier/customer linkages
• PASSIONATE commitment to continuous improvement
• Commitment to teaming/training
• Bias for data based decision making
Page 47
47
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Strategic Quality Management
Using the quality of products and services to increase a
company’s share of the market
Page 48
48
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Implementing TQMIdentify 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
Req’mts met?
Continue to improve processes
no
yes
Page 49
Introduction to P/OM
•Management
•P/OM and SCM
•DSS
•QMS/OPI
•Theory of Constraints
•The Goal
Introduction to Supply Chain Management•SCM – Acquisition•SCM – Maintain•SCM – Transform•SCM – DistributeWebster Chapters•Information Technology•Foundations•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
Production/Operations Management
Dr. Eliot Elfner
St. Norbert College
Spring 2009
Lean Manufacturing and Quality Processes
The End