MGMT 330 Final Exam
T/F: JIT can only be used in manufacturing
False, it can also be applied to layout and services
Advantage of increasing yield in capacity management
Fewer waste
Car MPG differs from what was advertised when purchasing
Example of design capacity
GEMBA
Executives go and see how things are operating
Examples of a lumpy demand situation
Manufacturing, orders in batches/lumps
Market implications of quality management
Market share can be increased, increases in profit margin
Two conflicting goals in inventory management
Maximize customer service, minimize inventory investment
Benefit of expansionist strategy
May increase market share due to preemptive marketing
The 5 S's of JIT
Soft/segregate, simplify/straighten, shine/sweep, standardize, sustain/self-discipline
Examples of waste in JIT
Watching equipment run, waiting for parts, counting parts, overproduction, moving part over long distances, storing inventory, machine breakdown, rework
Cause-Effect Process
1. Identify effect: specific problem 2. Identify major cause categories 3. Identify specific minor causes 4. Analysis: determine causes that lead to greatest potential benefits.
Four Elements of Total Quality Management
1. Leadership 2. Involvement 3. Continuous improvement toward product/process excellence 4. Customer focus
Elements of MRP
1. Master Production Schedule 2. Bill of materials: product tree information of each product 3. Inventory status file: computerized record 4. MRP Computer program 5. Output of MRP: Primary and secondary reports
Group technology/cellular layout
A combination of process and product layout that attempts to combine benefits of both product and process layouts
ABC Analysis
A measure of importance where: A = Very important, B = Moderately Important, C = Least important
Capacity
Ability of an organization to provide the customers the good and services they demand
Product layout
Assembly layout, uses standardized processing operations to achieve smooth, rapid, high-volume flow
Material Requirement Planning (MRP)
Based on dependent demand, computer-based system that explodes the MPS into the required amount of raw materials, part, subassemblies, etc. needed in each week of planning horizon, and develops a schedule or orders for each inventory material
Jidoka JIT
Empowering employees
Objectives of facility layout
Better material movement, reduced bottlenecks, avoid machine interference, boost morale, safety, support flexibility, efficient utilization of space
Total productive maintenance (TPM) JIT
Breakdown maintenance, preventive maintenance
How to handle problems with JIT/Lean
Bring problems to the forefront and resolve them immediately
Pros of inventory
Buffer, meet anticipated demand, smooth production requirements, less stock-outs, hedge against price increase, quantity discounts
Perpetual inventory system
Can range from very simple to more complex
Capacity decisions are important because:
Capital investment, company objectives must be met, competitive edge
Factors that may affect capacity
Changed product mix, adding people to production process, increasing operating rate of machines, improving quality of raw materials and work process, increasing yield, preventive maintenance
Capacity decisions are made in light of
Competition, industry trend, consumer trend
Kaizen JIT
Continuous improvement, requires total employment involvement
Examples of material handling systems
Conveyors, cranes, elevators, motorized trucks
Organization's part in achieving quality
Cross-functional integration and teams, top management support, quality culture
Objective of MRP
Customer service, reduce inventory investments, improve plant-operating efficiencies
Basic economic order quantity model
Demand is known and is constant and uniform, shortages not allowed, lead-time is known and constant, order received all at once, no quantity discount, cost of ordering does not depend on order size
Dependent demand system, inventory management
Demand of legs or table top
Independent demand system, inventory management
Depends on external factors
JIT's mandate
Eliminate all waste, enforced problem solving
Cellular Layout JIT
Group dissimilar machines in manufacturing cell to product family of parts, work flows in one direction, cycle time adjusted by changing worker paths
Critical decisions in inventory management
How much to order, when to order, safety stock
Cost implications of quality management
If cost ranges from 10-35% of total sales, it should be no more than 2-5%
Two key changes necessary in reducing lot sizes
Improve material handling and reduce setup time
Employee considerations in achieving quality
Individual development and incentive systems
Advantage of improving the quality of raw materials and work process in capacity management
It will increase capacity because there will be fewer mistakes and less reworking with less bad components
Kanban
Japanese for "card," meaning kanbans pulls through the process
JIT Definition
Just-in-time, producing only what is need, when it is needed
The Expansionist Strategy
Large, infrequent jumps in capacity; buy capacity in large chunks and stay ahead of demand
Small-lot production JIT
Less space and capital investment, processes closer together, quality problems easier to detect, processes more dependent on each other, reduced throughput time
AnDon JIT
Like a traffic light that indicates problems with production in certain stages
MRP is suitable for:
Lumpy demand situations, relatively long lead times, and dependent demand situations
Pull production JIT
Order is triggered by the user, nothing is produced until ordered by the down-stream user, producing extras or shortages are equally undesirable
Taiichi Ohno's Seven Wastes of JIT
Overproduction, queues, transportation, inventory, motion, overprocessing, defective products
Capacity options:
Overtime, adding shifts, subcontract, expand facility, new machines, acquire other companies, locate new facility
Process layout
Similar functions are grouped together, can handle varied processing requirements
The wait-and-see strategy
Smaller, more frequent jumps in capacity; makes use of short-term capacity options such as overtime, etc. more conservative approach that minimizes risks.
Facility Layout
Physical arrangement of resources needed to produce goods and services
Periodic inventory counting system
Physical count of items made at periodic intervals and orders for all items placed at once
Bottleneck
Primary determinant of capacity, most important concept in capacity management
Fixed position layout
Product or project remains stationary, and workers, materials, and equipment are moved as needed ex. ship building, phone construction
Rate of input capacity measure
Production output rate; ex. customer served/time period
Throughput time
Production part, time it takes to create an object
Characteristic of quality management
Products: performance, durability, aesthetics, features, safety, serviceability, reliability, conformance, perception Service: Time/timeliness, courtesy, accuracy, responsiveness, completeness, consistency, accessibility/convenience
Actual output
Rate of output actually achieved--cannot exceed the effective capacity
Types of inventory
Raw materials, partially completed goods called work in progress, finished-good inventories, replacement parts, good-in-transit to warehouses or customers
JIT Layout tactics
Reduce waste due to movement
Problems with traditional push manufacturing
Reorder point (two-bin) system, safety and buffer stocks, lot sizing techniques, inflated lead times, order cancellations...all lead to excess inventory
JIT Scheduling
Schedules must be communicated inside and outside the organization
Cost associated with quality
Scrap, rework, lawsuits, prevention, lost customers, etc
Shingo Single Minute Exchange of Dies Principles
Separate internal setup from external, convert internal setup to external, streamline all aspects of setup, perform setup activities in parallel or eliminate them
Prerequisites for JIT
Stable and level production, smaller and more focused factories, smaller lot sizes
Comprehensive quality management
Strategy that provides good and services that completely satisfy both internal and external customers by meeting their implicit and explicit expectations
Bill of material
Structured list of components of a product
Material handling system
The entire network of transportation in the facility
Effective capacity
The maximum capacity given product mix, scheduling difficulties, and other doses of reality
Design capacity
The maximum obtainable output
Cons of inventory
Ties up capital, obsolescence risk, shrinkage, shelf life, carrying cost
Example of avoiding machine interference
Too much vibration from one machine effects calibration of machine in the next room
T/F: Total quality management and JIT overlap
True
Two-bin inventory system
Two containers of inventory; reorder when the first is empty
Units of input capacity measure
Typically used in services; ex. number of rooms in a motel, ford can product "x" cars/year
Point-of-sale inventory system
UPC
Quality Management
Varied responses, consumer and producer perspective