MGMT 4000 Test Three
A defective part or component can cause a ________ system to shut down
JIT
Which of the following is a negative aspect of JIT compared to synchronous manufacturing?
JIT does not allow for a lot of flexibility in the products produced
Kaizen
Japanese philosophy for continuous improvement
Quality at the Source
Means do it right the first time and when something goes wrong, stop the process or assembly line immediately. Factory workers become their own inspectors, personally responsible
defects
arise because people make errors.
Demand is characterized as independent if it comes from sources
outside of the firm and is not related to another product
Operations Consulting
deals with assisting clients in developing operations strategies and improving processes; must be able to define the most effective combination of technology and systems to execute a business strategy.
Cost impact and payoff analysis tools
decision trees, balanced scorecard, stakeholder analysis
Central to Shingo's approach is the difference between errors and
defects
Shingo argued that SQC methods do not prevent
defects
The underlying distribution for the c-chart is the Poisson, which is based on the assumption that
defects occur randomly on each unit
Six Sigma is measured with
defects per million opportunities
one of the benefits of six sigma is that is allows managers to describe the performance of a process in terms of its variability and to compare different processes using a common metric. This metric is
defects per million opportunities
During the initial analysis phases, an operations consultant identifies that her client takes twice as long to process orders as industry competitors. This information is likely conveyed in which problem definition tool?
gap analysis
A philosophy in which similar parts are combined into families, and the processes required to make the parts are arranged in a specialized workcell.
group technology
What term describes a philosophy in which similar parts are arranged into families and processes to make parts by manufacturing cells?
group technology
Lean Concepts
group technology, quality at the source, JIT production
holding costs
handling, insurance, pilferage, storage facilities
in distribution, inventory is classified as 'in transit' meaning that
it is being moved in the system, and warehouse, which is inventory in a warehouse or distribution center
What type of schedule requires material to be pulled into final assembly in a uniform pattern?
level
consulting firms generally work in
project teams
juran
quality is not free, there is an optimum
Inventory Accuracy
refers to how well the inventory records agree with physical count
manufacturing inventory
refers to items that contribute to or become part of a firm's product output. typically classified into: -raw materials -finished products -component parts -supplies -work in process
Freeze window
refers to that period of time during which the schedule is fixed and no further changes are possible
value chain
refers to the concept that each step in the supply chain process that deliver products and services to the customer should create value. If a step does not create value it is removed from the process.
synchronous manufacturing
refers to the entire production process working in harmony to achieve the profit goal of the firm
the fixed time period model has a larger average inventory because it must also protect against stockout during the
review period
Which of the following is the first stage in the operations consulting process?
sales and proposal development
six sigma refers to the variation that exists within plus or minus three
standard deviations
Inventory Management is what makes Amazon
successful
inventory
the stock of any item or resource used in an organization
Prevention Costs
the sum of all of the costs to prevent defects
Price Break Model
this model is useful for finding the order quantity of an item when the price of the item varies with the order size
fixed time period models are
time triggered
a manufacturing work cell eliminates inventory buildup by bringing steps in a process
together
According to the theory of constraints, the term "productivity" is defined as all those actions that bring a company closer to its goals.
true
Lean production uses a pull system for production.
true
Manufacturing performance measurements tend to be more quantitative than marketing performance measurements.
true
The nature of service products is that the execution of each service delivery has some
uniqueness
process control chart
used to assure that processes are in statistical control
six sigma seeks to reduce
variation in the processes that lead to product defects
Common Variation
variation that is inherent in the process itself
One unique aspect of synchronous manufacturing systems relative to MRP systems is that synchronous systems can:
vary the size of process and transfer batches
A non bottleneck should not be
working constantly
During idle periods, personnel can be put to work on other activities such as special projects, work group activities, and
workstation housekeeping
certifications for six sigma
yellow belt, green belt, black belt, master black belt
Engineers know that it is impossible to have ____ variability.
zero
Crosby
zero defects
Which of the following are typically differences between marketing and production organizations?
-measurement systems -personalities of personnel -organizational culture
drawbacks of just in time
-most often used in repetitive manufacturing environments -requires a stable production level -does not allow for a lot of flexibility in the products produced -still requires work in process inventory when used with Kanbans so that there is something to pull -vendors need to be located nearby because the system depends on smaller, more frequent deliveries
In an assembly line, what is the batch size?
1 or infinity
Optimized Production Technology (OPT)
Is a production improvement method based on bottleneck improvements. It concentrates on constraints and seeks to identify and then remove bottlenecks that hinder the flow of a system.
Processes
Technology evaluation, process improvement, reengineering.
expert consultant
a professional who provides information, expertise, or advice to one or both interested parties to help them resolve a conflict.
colored golf balls
at kawasaki engine plant, when a part in a subassembly is down to its queue limit, the assembler rolls a colored golf ball down a pipe to the replenishment machine center. This tells the operator which part to make nect
capacity is defined as the
available time for production
The two critical components of ALL reorder point calculation scenarios are:
average daily demand and lead time in days.
when statistical fluctuations occur in a dependent sequence without any inventory between workstations, there is no opportunity to achieve the
average output
conformance quality
degree to which the product or service design specifications are met. the activities involved in achieving conformance are of a tactical day to day nature.
conformance quality
degree to which the product or service design specifications are met. the activities involved in achieving conformance are tactical, day-to-day.
Due to the nature of service production and consumption, _______________________ _______________ scheduling is necessary for operating a service business.
demand pull
run chart
depict trends in data over time
run charts
depict trends in data over time
In monitoring process quality, we might use which of the following statistics?
difference between the highest and lowest value in a sample
cost of providing good quality
design quality: inherent value of the product in the marketplace conformance quality: degree to which the product or service design specifications are met
process limits are slightly greater than the specification limits given by the
designer
the amount of safety stock depends on the service level
desired
acceptance sampling: what you need to do
determine how many units, n, to sample from a lot, and (2) the maximum number of defective items, c, that can be found in the sample before the lot is rejected
"Control" six sigma
determine how to maintain improvements
"Measure" Six Sigma
determine how to measure the process and how it is performing
With a double batch size, the net result is that the work-in-process is approximately ___________ as the investment in ______________.
doubled; inventory
Where does the authority to produce come from in a kanban pull system?
downstream operations
What is the purpose of single-minute exchange of die (SMED) procedures in the Shingo System?
drastic cuts in equipment setup time
A control point at a bottleneck is called the __________ because it strikes the beat that the rest of the system (or those parts that it influences) uses to function.
drum
productivity is defined as all the actions that bring a company closer to its
goals
customer value
something for which the customer is willing to pay
when flow is balanced, capacity is
unbalanced
Quality at the source
The philosophy of making each worker responsible for the quality of his or her work.
quality at the source
The philosophy of making each worker responsible for the quality of his or her work.
Which of the following indicates the process is out-of-control?
A point is above the upper control limit A point is below the lower control limit
costs of inventory
-facility costs -human capital -finance costs -management costs -procurement costs -inventory turnover -stock accuracy -pillage and ullage -service levels
Solving the Newspaper Problem
-consider how much risk we are willing to take of running out of inventory -assume a mean of 90 papers and a standard deviation of 10 papers -assume we want an 80 percent chance of not running out -assume that the probability distribution associated with sales is normal, stocking 90 papers yields a 50 percent chance of stocking out
Disadvantages of Inventory
-cost of storage -cost of insurance -reduction in flexibility -cost of lost opportunity
What is the minimum number of samples suggested for control charts with variable measurement?
25
In an effort to address inventory control issues, a consultant might use which tool in the problem analysis phase of the project?
ABC analysis
The Pareto principle is best applied to which of the following inventory systems?
ABC classification
cause and effect diagrams
Also called fishbone diagrams, they show hypothesized relationships between potential causes and the problem under study. Once the C&E diagram is constructed, the analysis would proceed to find out which of the potential causes were in fact contributing to the problem.
DC
Annual Purchase Price
H
Annual holding and storage cost per unit of average inventory
Q/2* (h)
Annual holding costs
Which of the following is/are components of total costs in a fixed-quantity inventory system?
Annual holding costs Annual ordering costs Annual purchase costs
(D/Q) *S
Annual ordering Costs
Pair of hands consulting model
Approach to consulting whereby the consultant is given the diagnoses and solution to a problem and is hired to implement the solution.
How large should the time buffer be?
As long as it needs to be to ensure that the bottleneck continues to work
If the drum is not a bottleneck but a CCR, we might want to create two buffer inventories. Where? Check both.
At the end In front of the CCR
Inventory Turn=
COGS/ Average Inventory Value
The OC Curve
Chart showing the percent def. and chance of accepting that % def.
Lean Six Sigma
Combines the implementation and quality control tools of Six Sigma and the inventory management concept of lean manufacturing. Lean manufacturing achieves high volume production and minimal waste through the use of just in time inventory methods.
Which of the following is/are data analysis and solution development tools used by operations consultants?
Computer Simulation Bottleneck Analysis Statistical Tools
cost of quality analysis
Cost to improve or ensure quality measures, as well as the cost associated with a lack of quality. In other words, all of the costs associated with a quality level that is not 100%. Common in industry and constitute one of the primary functions of quality control departments.
Quality Gurus
Crosby, w. Edwards Deming, Joseph Juran
Match the quality gurus with their respective approach to vendor rating.
Crosby--> Quality audits useless. Deming--> No, critical of most systems Juran--> Yes, but help the supplier improve
Design of Experiments (DOE)
DOE, sometimes referred to as fmultiiterative testing, is a statistical methodology used for determining the cause and effect relationship between process variables (Xs) and output variables (Ys)
A standard approach to Six Sigma projects is following the DMAIC methodology
Define Measure Analyze Improve Control
Which of the following are typical objectives of process control plans?
Detect shifts in the process Provide information about whether items are meeting design specifications
Measure
Determine how to gauge the process and how it is performing.
Control
Determine how to maintain the improvements.
decision trees
Diagrams used by consultants where answers to yes or no questions lead decision makers to address additional questions until they reach the end of the tree.
With variable control charts (x and R), what happens once the chart has been set up?
Each new sample is compared against the chart.
Lean Warehousing
Eliminate non-value-added steps and waste in storage process
The Toyota Production System was developed to improve quality and productivity and is predicated upon two philosophies central to the Japanese culture. What are these two philosophies?
Elimination of waste Respect for workers
Operations consultant, Danielle Jones, is about to start a service improvement project with Company A. Which of the following problem definition tools are likely available to help her frame the problem(s)?
Employee surveys Customer surveys
External benchmarking is analysis of which of the following
Excellent performers outside the industry Industry competitors
The goal of JIT production is to drive all inventory queues lower.
False
True or False: Waste reduction refers only to the elimination of nonvalue-adding activities that are part of the value stream.
False
True or False: When backflushing parts, the actual number of parts used in production must be tracked.
False. Not having to track the actual parts is a key advantage of backflushing.
Areas of Consulting Need in Services
Financial Services, Health Care, Transportation, Hospitality
Lean supply chains design principles can be divided into three major categories. Which of the following components are part of lean concepts?
Group technology Quality at the source JIT production
Which of the following is a "focusing step" of Dr. Eli Goldratt's theory of constraints?
Identify System Constraints
Which of the following is used to identify the task responsibilities for a project?
Implementation Responsibility Chart
If a bottleneck does not require setup time to change products, how should one schedule the sequence of products?
In the order of required customer deliveries
Successive checks
Inspection process where an operator inspects the work of a previous operator prior to performing more value-add work.
What term is used to describe a philosophy that focuses on continuous improvement?
Kaizen
Lean Procurement
Key is automation (e-procurement) Suppliers must see into the customers' operations and customers must see into their suppliers' operation
With regards to Goldratt's rules of production scheduling: Priorities can be set only by examining the system's constraints. ________________ is a derivative of the schedule
Lead Time
Which of the following are examples of a situation where statistical quality control can be applied?
Leaves on the ground below a tree
Where can statistical quality control be applied?
Logistics, manufacturing, and service processes
When nonbottleneck resources are scheduled with larger batch sizes, it is possible that they will become a bottleneck. How is this possible?
Longer time producing one item increases the wait time for other items
A process uses five machines. A study of those machines found the following capacity utilization. Which one is the bottleneck?
M4: 123 percent of capacity (the highest of all of the options)
Parts
Make or buy decisions, vendor selection decisions.
When bottleneck operation X feeds nonbottleneck operation Y (X→Y), what happens?
No work in process inventory develops
The graphical display of sampling plans is termed?
OC curve
Who typically performs preventative maintenance?
Operators
single period inventory model
P is less than or equal to Cu/ (Co + Cu) Co= cost of overestimating demand/COGS Cu= Cost of underestimating demand you're solving for a probability once you get your probability, go the back of the textbook (or the exam guide) and look at the Z score chart to get your Z score Use this Z score in Inventory= Average Sales + Z (Standard Deviation)
PDSA Definition
Plan Do Study Act is a framework for problem solving and improvement activities Process Improvement Definition: A systematic approach to improving a process
Five Main Manufacturing Consulting Areas (Five Ps)
Plants, People, Parts, Processes, Planning/Control Systems
The underlying distribution for the c-chart is which of the following?
Poisson
Cycle Counting
a physical inventory-taking technique in which inventory is counted on a frequent basis rather than once or twice a year
attributes
Quality characteristics that are classified as either conforming or not conforming to specification. Goods or services may be observed to be either good or bad, functioning or non-functioning.
People
Quality improvement, setting/revising work standards, learning curve analysis.
_____________ time is the time that a part waits for a resource while the resource is busy with something else.
Queue
Process Capability Index
Ratio of the range of values produced divided by the range of values allowed Shows how well the parts being produced fit into the range specified by the design specifications Cpk larger than one indicates process is capable of producing all output within specifications If the two numbers are not equal, then the mean has shifted from the center of the specification limits
Categories of Inventory
Raw Material- unprocessed purchase inputs Work in Process Materials (WIP)- partially processed materials not yet ready for sales Finished Goods- products ready for shipment Maintenance Repair and Operating
Which of the following is/are problem analysis (SPC) tools?
Scatter diagrams Fishbone diagrams
ISO 9000
Set of international standards on quality management and quality assurance, critical to international business. Idea is that defects can be prevented through the planning and application of best practices at every stage of business
Fail-safe procedures and poka-yokes
Simple practices that prevent errors or provide feedback in time for the worker to correct errors.
Kanban squares
Some companies use marked spaces on the floor or on a table to identify where material should be stored. When the square is empty, the supplying operations are authorized to produce; when the square is full, no parts are needed.
Lean supply chains design principles can be divided into three major categories. Which of the following components are part of lean supply chains?
Specialized plants. Collaboration with suppliers. Building a lean supply chain.
The following kinds of time make up production cycle time
Step Time Processing Time Queue Time Wait Time Idle Time
Planning and Control Systems
Supply chain management, ERP, MRP, shop-floor control, warehousing, distribution.
Flowcharts
System or process flowcharts show the relationship between components and how the overall process works. These are useful for identifying risks between system components.
Total Quality Management (TQM)
TQM is managing the entire organization so that it excels on all dimensions of products and services that are important to the customer. Two fundamental operational goals: 1) careful design of the product or service 2) ensuring that the organization's systems can consistently produce the design Additional: Continuous Improvement, Involvement of Everybody, and Customer Satisfaction
Which of the following highlights a dependent demand scenario?
The four tires needed to complete a car
The Effects of Lot Size
The size of the lot that the sample is taken from has relatively little effect on the quality of protection.
process control charts
These are time-sequenced charts showing plotted values of a statistic including a centerline average and one or more control limits. It is used to assure that processes are in statistical control.
When nonbottleneck resources are scheduled with larger batch sizes, what happens?
They risk becoming bottlenecks
opportunity flow diagram
This is used to separate value-added from non-value-added steps in a process.
The single period model
This is used when we are making a one-time purchase of an item. An example might be purchasing T-shirts to sell at a one-time sporting event.
fixed-order quantity model
This is used when we want to maintain an item "in-stock," and when we resupply the item, a certain number of units must be ordered each time. Inventory for the item is monitored until it gets down to a level where the risk of stocking out is great enough that we are compelled to order.
An inventory control system is responsible for which of the following?
Timing the order placement Keeping track of what has been ordered Receiving goods Ordering goods
According to Goldratt's Theory of Constraints, no improvement is possible unless the constraint or weakest link is found.
True
Buffer inventory in front of a bottleneck is called a time buffer.
True
In sampling variables, the actual measurements of the variable observed are used regardless of whether the unit is good or bad.
True
The probability associated with rejecting a high-quality lot is denoted in acceptance sampling with the Greek letter alpha.
True
Analyze
Understand why defects are generated by identifying the key variables most likely to create process variation.
Who is eligible for the Malcolm Bridge Award
Universities, Health Care Organizations, small businesses, educational institutions
Types of Data
Variables Data--> Things we Measured (think of it as can be measured out to multiple decimal points) -length -weight -time -height -volume -temperature -diameter -strength Attribute/Continuous Data--> Things we can count (can be categorical as well) -number of percent of defective items in a lot -number of defects per item -types of defects -value assigned to defects (minor=1, major=5, critical=10)
Assignable Variation
Variation that is caused by factors that can be identified and possibly even managed
Goldratt's TOC Performance Measures
We have three measures of the firm's ability to make money: 1) Net Profit-an absolute measurement in dollars 2) Return on Investment- a relative measure based on investment 3) Cash flow- a survival measurement All three measurements must be used together
When nonbottleneck operation X feeds bottleneck operation Y (X→Y), what happens?
Work in process builds up between X and Y
What happens when schedulers try to reduce setup time by running larger batches? Check all that apply.
Work in process increases Investment in inventory increases
cycle counting
a physical inventory-taking technique in which inventory is counted on a frequent basis rather than once or twice a year. key is to decide which items will be counted and by whom.
Drum-Buffer-Rope
a planning and control system that regulates the flow of work-in-process materials at the bottleneck or the capacity constrained resource in a productive system. buffers created in response to the bottleneck. bottleneck is the drum of the entire system.
Schedulers are tempted to save setup times; although, doing so is
a bad idea under TOC.
Balanced Scorecard
a consulting tool which shows a combination of performance measures directed toward the company's long and short term goals and used as the basis for awarding incentive pay. Attempts to reflect the particular needs of each stakeholder and is tailored to what senior level and branch level management can control.
Kaisen event
a cross functional team comes together and the 5Ss are often what the team uses up front.
Q
amount to be ordered
Failure mode and effect analysis is used in Six Sigma projects. It involves which of the following?
calculating a risk priority number for each possible failure
When the mean and standard deviation of the process are operating such that the upper and lower control limits are acceptable relative to the upper and lower specification limits, we say the process is
capable
If there is no bottleneck the best place to place the drum is the
capacity constrained resource
Capacity-constrained resource (CCR)
capacity is close to demand placed on resource
An analytical tool used in Six Sigma quality improvement programs is which of the following?
check sheets
Poka-yokes include
checklists or special tooling that 1) prevents workers from making errors that lead to defects 2) provides immediate feedback in response to defects
In strategy development, the focus is on analyzing the capabilities of operations in light of the firm's
competitive strategy
The Malcolm Baldrige National Quality Award is given annually in all of these categories
education small business service health care
To enable this pull process to work smoothly, lean production demands high levels of quality at each stage in the process, strong vendor relations and a fairly predictable demand for the
end product
work sampling
evaluates job candidates as they perform actual work tasks
fixed order quantity models are
event triggered
Where in a process is there an opportunity for defects?
every step or activity
A project champion is usually drawn from what levels of an organization?
executive
roles consultants choose
expert role (traditional view of mgmt consultant) pair of hands role (for orgs that are resource tight, they could do it themselves but everyone is too busy so they hire an outside consultant) collaborative role (strategic partner)
Applying lean concepts in manufacturing balances increases in cost with quality improvement.
false
Dependent demand inventory levels are usually managed by calculations using calculus-driven, cost-minimizing models.
false
Design of experiments (DOE) refers to work done before production of early model prototypes of a new product.
false
In inventory models, high holding costs tend to favor high inventory levels.
false
Lean suppliers tend to charge more; although, the extra charge is generally a good investment.
false
What is the portion of the EOQ equation represents annual holding cost?
(Q/2)*H
basic purpose of inventory analysis
1) when items should be ordered 2) how large the order should be
Project Management Techniques
1. Gantt chart 2. Critical Path Method (CPM) 3. Program Evaluation and Review Technique (PERT) These plan and monitor the entire portfolio of consulting engagements for the firm at a single point in time as well as individual consulting projects.
"A" items account for approximately ____% of the items in inventory.
15
The cost of quality has been estimated at what percentage of every sales dollar?
15-20%
kanban
A Japanese word meaning "card" or "visible record" that refers to cards used to control the flow of production through a factory. Authorizes production from downstream operations 'Pulls' Material through the plant May be a card, flag, verbal signal, etc. Used often with fixed-size containers... you can add or remove containers to change production rate. eg using a colored system for containers
Taguchi's View of Variability Costs
Concave up parabola.
The ISO 9000 standards are based on a number of quality management principles. These principles focus on what related to the following areas in the firm? Check all that apply
Continual improvement Involvement of people Leadership Process approach Customer focus
Analytical Tools
Flowchart, Run Chart, Pareto Chart, Check sheet, Cause-and-effect diagram, Opportunity flow diagram, process control chart
Which of the following is/are typical consulting implementation tools?
Gantt Charts PERT Responsibility Charts
Improve
Identify means to remove the causes of defects.
Improvement Basis: Crosby
a process, not a program; improvement goals
Interpreting upper and lower specification limits (Traditional View)
a traditional way of interpreting such a specification is that anything that falls within that range is good/acceptable and anything that falls outside is totally bad.
Fishbone diagram
a visual aid that helps organize cause and effect relationships for "things gone wrong" goal is to list the things going wrong
quality=
ability for a factor or service process to produce the products
D
annual demand
For industrial applications in process control involving the measurement of variables, it is preferable to keep the sample size small. Why is this? Check all that apply.
cost and time
In a fixed time period
inventory model, the interval of time between orders is fixed and order quantity varies.
L
lead time
A key use of customer surveys is customer
loyalty analysis
Goldratt holds that the goal of any firm is to
make money
Which of the following is an operations consulting opportunity characterized as focusing on "parts"?
make or buy decisions
acceptance quality level
maximum acceptable percentage of defectives defined by the producer
productivity
measured in terms of output per labor hour
If the mean is exactly in the center and Cpk = 2.00, then two defects per
million are expected
Lean requires a _____________ of work-in-process inventory.
minimum
collaborative or process consultant
most effective in operations management consulting projects
reduction of inventory through the
pull system
If a process can be improved by reducing the standard deviation associated with the bearing diameter, the probability of producing defective parts can be
reduced
statistical fluctuation
refers to the normal variation about a mean or average
practices that deal more with procedural, low-risk work will be inefficient if they do not have a lower ratio of partners to juniors because high-priced staff should not be doing low-value
tasks
When developing inventory cost models, which of the following is not included as a costs to place an order?
taxes
Pareto analysis
technique for classifying problem areas according to degree of importance, and focusing on the most important (applied to inventory management under the heading of ABC analysis)
safety stock
the amount of inventory carried in addition to the expected demand. in a normal distribution, this would be the mean.
inventory system
the set of policies and controls that monitor levels of inventory and determines what levels should be maintained, when stock should be replenished, and how large orders should be
Fixed-time period model
this is similar to the fixed-order quantity model, and is to be used when the item should be in stock and ready to use. rather than monitoring the inventory level and ordering when the level gets down to a critical quantity , the item is ordered at certain intervals of time, eg every Friday morning. This is often convenient when a group of items is ordered all together
The buffer before a bottleneck is a
time buffer
Lean production is an integrated set of activities designed to achieve high-volume production using minimal inventories of raw materials, work-in-process, and finished goods.
true
On an assembly line, a transfer batch can be one unit.
true
One of the many lean techniques that have been successfully applied in service firms is the upgrading of housekeeping.
true
The computation of a firm's inventory position is found by taking the inventory on hand and adding it to the on-order inventory, and then subtracting backordered inventory.
true
Six Sigma calculations require
unit defect opportunity
with service organizations there is often a price to pay for being lean, and that price often is at the expense of customer service when
unlikely events occur
Improvement Basis: Deming
- Continuous to reduce variation - Eliminate goals that have no method
Two things we need to do to address a bottleneck
1) Keep a buffer inventory in front of it to make sure it always has something to work on. 2) Communicate back upstream to A what D has produced so that A provides only that amount.
The management consulting industry can be categorized three ways
1) by size 2) by speculation 3) by in-house and external consultants
three basic assumptions justify an analysis of the costs of quality
1) failures occur 2) prevention is cheaper 3) performance can be cheaper
Lean Supply Chains
1. Specialized plants 2. Work with suppliers 3. Building a lean supply chain
Lean Production Schedules
1. uniform plant loading 2. kanban production control system 3. determination of number of Kansans needed 4. minimized setup times
Because most consulting firms are involved in multiple projects at one time, the percentage of billable employee hours assigned to all projects (target utilization) will be less than
100%
Which model is more likely to have a stock out?
Fixed-time period
JIT is typically applied to repetitive manufacturing.
JIT does not require large volumes and can be applied to any repetitive segments
Goldratt Theory of Constraints
States that we must identify the most important limiting factor and systematically improve constraint until it is no longer limiting.
a single sampling plan is defined by n and c, where n is the number of units in the sample and c is the
acceptance number
Plant tours/audits
an extensive manufacturing/service audit requires a team which can devote a long period of time (weeks to months) to perform an audit and use standardized performance measures
all manufacturing processes can be simplified into four basic configurations. production processes can be greatly simplified for
analysis and control
C
cost per unit
design quality
inherent value of the product in the marketplace
L
lead time in days
Deming
no optimum; continuous improvement
Often, increases in productivity occur as a by product of efforts to reduce the cost of
quality
A time buffer typically occurs where in the process?
in front of the bottleneck
From an operations standpoint, the goal of the firm is to
increase throughput while simultaneously reducing inventory and reducing operating expense
inventory position
is defined as the on-hand plus on-order minus backordered quantities.
Which of the following is not one of the categories of manufacturing inventory?
just in time
A signaling device used to control production is
kanban
Which of the following denotes the total number of samples?
m
Where a product is involved, who is responsible for ensuring that quality specifications are met?
manufacturing management
With an assembly line, setup costs relate to the
process batch
Around 1980, Dr. Eli Goldratt (an Israeli business consultant) contended that manufacturers were not doing a great job in scheduling and controlling their resources and inventories. To solve this problem, Goldratt and his associates, at a company named Creative Output, developed software that scheduled jobs through manufacturing
processes-taking into account limited facilities, machines, personnel, tools, materials, and any other constraints that would affect a firms ability to adhere to a schedule
All of the following are types of waste in a lean process:
product defects wasting time motion
process control is concerned with monitoring quality while the
product or service is being produced
Lean production and six sigma work best in repeatable, standardized
production processes
an hour saved at the bottleneck adds an extra hour to the entire
production system
both quality of design and conformance should provide products that meet the customers objectives for these
products. This is often termed the product's fitness for use, and it identifying the dimensions of the product (or service) that the customer wants (that is, the voice of the customer) and developing a quality program to ensure that the dimensions are met.
A capacity resource ___________ is is obtained by looking at the loads placed on each resource by the products that are scheduled
profile
Process Dashboards
provide summary performance updates for certain processes
Deming
quality has many scales; use statistics to measure performance in all areas; critical of zero defects
Design Quality
refers to the inherent value of the product in the marketplace and is thus a strategic decision for the firm. The dimensions of design quality relate directly to design issues.
environmental footprint
relates to the impact that running the supply chain has on the environment
fixed time period models generally require a higher degree of
safety stock (than fixed order quantity models)
Kanban means
sign or instruction card in Japanese
TC
total annual cost
hierarchy of a consulting firm
(finders)top: partners/seniors... primary job is client relations (minders)middle: managers who deal with projects/engagements (grinders) juniors: carry out consulting work as a part of a consulting team
Lean suppliers
- able to respond to changes - prices are lower due to efficiency - higher quality -to develop lean suppliers, organizations should include them in their value stream planning
Problem Definition tools
- issue trees - customer surveys - gap analysis - employee surveys - five forces model
Improvement Basis: Juran
- project-by-project team approach - set goals to have a process map
To achieve outstanding quality requires
- quality leadership from senior management - CUSTOMER FOCUS - total involvement of workforce - continuous improvement based upon rigorous analysis of processes
specialized plants
-Small specialized plants rather than large vertically integrated manufacturing facilities -Can be constructed and operated cheaper
Building a Lean Supply Chain
-Value must be defined jointly for each product family based on the customer's perception -All firms along the value stream must make an adequate return on their investments -Firms must work together to eliminate waste (muda) -When cost targets are met, the firms will conduct new analyses to identify remaining waste and set new targets. -Every participating firm has the right to examine every activity relevant to the value stream as part of the joint search for waste
Which of the following are reasons to use inventory as a safeguard against raw material delivery time variation?
-an unexpected strike at a vendors plant -shortage of material at the vendors plant -normal variation in shipping time
advantages of pull system
-by pulling material in small lots, inventory cushions are removed, exposing problems and emphasizing continuous improvement -manufacturing cycle time is reduced -push systems dump orders on the downstream station regardless of the need
Fixed Time Period Model of Inventory Management
-inventory is ordered in different quantities but at the same time intervals eg every week -system must be monitored slowly -on hand inventory must be tracked daily
ABC Analysis Pareto Principle
-look at the items that make up your total revenues -20% of items make up 80% of your total sales -tells you which items you need to hold the most inventory in -A items are those items which contribute the most to revenue, B items are those which they want slightly less, C items are those products that have the least demand.
Be on the look our for the following within the "common cause" area on a control chart
-multiple points very near the control limit -five or more consecutive points above or below the mean -positive or negative trends (points are more above or more below the mean)
Inventory
-one of the largest line items on the balance sheet -represents a whole bunch of cash in the form of physical goods -inventory can be one of the most expensive assets of an organization -inventory may account for more than 10% of total revenue or 20% of total assets -management must reduce inventory levels to increase cash flow
Lean production is an integrated set of activities which seeks to minimize the use of
-raw materials -work in process -finished goods
areas where six sigma makes sense
-surgery -prescribing medicine -air traffic control
Among the hot areas of manufacturing strategy consulting are
-sustainability -outsourcing -supply chain management -global manufacturing networks
services operate with uncertainty and variability with respect to waste:
-uncertainty in task times -uncertainty in demand -customers' production roles
Single Period Model of Inventory Management
-used when we are making a one-time purchase of an item -inventory is determined by examining the costs of having too much inventory and the costs of having too little inventory
Fixed Order Quantity Model of Inventory Management
-you order the same amount each time -used when we want to maintain an item in stock and when we restock, a certain number of units must be ordered -reorder point must be changed at times so you don't run out of inventory -must constantly monitor this system
The costs of quality are generally classified into four types:
1) Appraisal Costs 2) Prevention Costs 3) Internal Failure Costs 4) External Failure Costs
Genichi Taguchi's (quality expert from Japan) view of the Traditional View
1) From the customer's view there is practically no difference between a product just inside the specifications and a product just outside. Conversely, there is a far greater difference in the quality of a product that is at the target and the quality of one that is near the limit. 2) As customers get more demanding, there is pressure to reduce variability but the traditional view does not represent this logic.
To test whether productivity has increased we must ask three questions:
1) Has the action taken increased throughput 2) Has it decreased inventory 3) Has it decreased operational expense
Major Inventory Cost Buckets
1) Holding (or carrying) costs: costs for storage, handling, insurance, and so on 2) Setup (production change costs): costs for arranging specific equipment setups, and so on 3) Ordering Costs (costs of placing an order) 4) Shortage Costs (costs of running out)
SQC can be applied to logistics, manufacturing and service processes. Here are some examples of how SQC can be applied:
1) How many paint defects are there in the finish of a car? Have we improved our painting process by installing a new sprayer 2) How long does it take to execute market orders in our web-based trading system? Has the installation of a new server improved the service? Does the performance of the system vary over the trading day? 3) How well are we able to maintain the dimensional tolerance on our three inch ball bearing assembly?
Place the steps to Goldratt's Theory of Constraints in the correct order.
1) Identify System Constraints 2) Decide how to exploit the system constraints. 3) Subordinate everything else to that decision. correct toggle button unavailable 4) Elevate the system constraints. 5) If, in the previous steps, the constraints have been broken, go back to step one but do not let inertia become the system constraint
10 of the most successful techniques applied to service companies
1) Organize Problem Solving 2) Upgrade Housekeeping 3) Upgrade Quality 4) Clarify Process Flows 5) Revise Equipment and Process Technologies 6) Level the Facility Load 7) Eliminate Unecessary Activities 8) Reogranize Physical Configuration 9) Introduce Demand- Pull Scheduling 10) Develop Supplier Networks
single period inventory models are useful for things such as
1) Overbooking airline flights 2) Ordering of fashion items 3) Any type of one time order
There are two ways to find a bottleneck in a system:
1) Run a capacity resource profile 2) Use our knowledge of the particular plant , look at the system in operation and interview its supervisors and workers
Five Primary Functions of Inventory
1) To maintain independence of operations 2) To meet variation in product demand 3) To allow flexibility in production scheduling 4) To provide a safeguard for variation in raw material delivery time 5) To take advantage of economic purchase order size
basic forms of statistical sampling for quality control
1) acceptance sampling: when unloading a truck we open 1 box of the 100 boxes in the truck. Pull randomly the stuff in the box and ensure within specification. If it conforms you accept the entire truckload of stuff 2) sampling to determine if the process is within acceptable limits (statistical process control). things are being created on an assembly line and a few parts from the assembly line are pulled each day to ensure compliance.
The ISO 9000 standards are based on seven quality management principles
1) customer focus 2) leadership 3) involvement of people 4) process approach 5) continual improvement 6) factual approach to decision making 7) mutually beneficial supplier relationships
Three Basic Assumptions justify an analysis of the costs of quality
1) failures occur 2) prevention is cheaper 3) performance can be measured
It has been suggested that market leadership can be attained in one of three ways
1) product leadership 2) operational exellency 3) customer intimacy
value stream map
1) visually shows where waste can be eliminated 2) shows how improvements make the process better
virtually all inventory these days are computerized. the computer can be programmed to produce a cycle count notice in the following cases:
1) when the record shows a low or zero balance on hand 2) when the records show a positive balance but a backorder is written 3) after some specified level of activity 4) to signal a review based on the importance of the item
stages in the operations consulting process
1. Develop sales and proposal development 2. Analyze problem 3. Design, develop, and test alternative solutions 4. Develop systematic performance measures 5. Present final report 6. Implement changes 7. Assure client satisfaction 8. Assemble learnings from the study
Goldratt's Rules of Production Scheduling
1. Do not balance capacity, balance production flow 2. The level utilization of a non-bottleneck resource is not determined by its own potential but by some other constraint in the system 3. An hour lost at a bottleneck is an hour lost for the entire system 4. An hour saved at a non-bottleneck doesn't improve the system 5. Bottlenecks govern both throughput and inventory in the system 6. Transfer Batch is not necessarily equal to the Process Batch 7. Process Batches should be variable both along their route and in time 8. Priorities can be set only by examining the system's constraints
Logic of Optimized Production Technology
1. Do not balance capacity--> balance the flow 2. The level of utilization of a non bottleneck resource is determined not by its own potential but by some other constraint in the system 3. Utilization and activation of a resource are not the same 4. An hour lost in a bottleneck is an hour lost in the entire system 5. An hour saved at the bottleneck is a mirage 6. Bottlenecks govern both inventory and throughput in a system 7. The transfer batch may not, and many times should not, be equal to the process batch 8. A process batch should be variable along its route and in time 9. Priorities can be set only by examining the systems constraints. Lead time is a derivative of the schedule.
Three Forms of ISO Certification
1. First party: a firm audits itself against ISO 9000 standards 2. Second party: a customer audits its supplier 3. Third party: a "qualified" national or international standards or certifying agency serves as auditor -best certification of a firm is through a third party
Steps to Goldratt's Theory of Constraints
1. Identify System Constraints 2. Decide how to exploit the system constraints 3. Subordinate everything else to that decision 4. Elevate the systems constraints 5. If, in the previous steps, the constraints have been broken, go back to step one but do not let inertia become the system constraint
Respect for People
1. Lifetime employment for permanent positions 2. Maintain level payrolls even when business conditions deteriorate 3. Company unions 4. Bonuses 5. View workers as assets
Advantages of Inventory
1. Maintaining independent of operations 2. Meeting variation in production demand 3. Taking advantage of economic purchase order size 4. Accommodating variability in raw material delivery time
Dimensions of Design Quality
1. Performance 2. Features 3. Reliability/Durability 4. Serviceability 5. Aesthetics 6. Perceived Quality
Purposes of Inventory
1. To maintain independence of operations 2. To meet variation in product demand 3. To allow flexibility in production scheduling 4. To provide a safeguard for variation in raw material delivery time 5. To take advantage of economic purchase-order size 6. Many other domain specific reasons
Seven prominent types of waste to be eliminated from the supply chain
1. Waste from overproduction 2. Waste of waiting time 3. Transportation waste 4. Inventory waste 5. Processing waste 6. Waste of motion 7. Waste from product defects
costs of quality are generally classified into four types
1. appraisal costs 2. prevention costs 3. internal failure costs 4. external failure costs
Eight Types of Waste
1. overproduction 2. inappropriate processing 3. waiting 4. transportation 5. motion 6. inventory 7. defects 8. underutilization of employees
In cycle counting, the accuracy level recommended by experts for "A" items is +/- ______.
2%
It is generally believed that the correct cost for a well-run quality management program should be under what amount?
2.5%
pareto principle
20% of people control 80% of the wealth
To generate a Cpk value of 1.00, the design limits must be ________ standard deviations away from the process mean
3
ISO 14000
A collection of the best practices for managing an organization's impact on the environment.
flowchart
A diagram that shows step-by-step progression through a procedure or system especially using connecting lines and a set of conventional symbols.
Five Forces Model
A framework that identifies five forces that determine the profit potential of an industry and shape a firm's competitive strategy.
5Ss
A lean production checklist: Sort, Set in Order, Sweep, Standardize, Self-discipline, Sustain. Tries to help maintain order of lean manufacturing. Can be used in office space and service industries as well. Essentially tries to eliminate waste. Most difficult part is sustaining this over time.
Plant
Adding and locating new plants; expanding, contracting, or refocusing existing facilities.
Malcolm Baldrige National Quality Award
An award started in 1987 to recognize companies that have achieved a level of world-class competition through quality management (used to incentivize better quality in the US)
Products Fitness for Use
Both quality of design and quality of conformance should provide products that meet the customer's objectives for those products. Entails identifying the dimensions of a product that the customer wants and then creating quality control programs to ensure those dimensions are met.
Which of the following categories are ways to characterize the operations consulting industry?
By specialization By size In-house vs. external
Personnel practices associated with Six Sigma implementation
Executive leaders, who are truly committed to Lean Six Sigma and who promote it throughout the organization, and champions, who take ownership of the processes to be improved Corporate wide training in Six Sigma concepts and tools Setting of stretch objectives for improvement continuous reinforcement and rewards
The "dollar days" inventory measurement can be used in purchasing to discourage large work-in-process and producing earlier than is needed.
False. Dollar day measurements also could be used in other areas -marketing to discourage holding large amounts of finished goods inventory -purchasing to discourage placing large purchase orders that on the surface appear to take advantage of quantity discounts -manufacturing to discourage large work in process and producing earlier than needed -project management- to quantify a project's limited resource investments as a function of time
Multi-Period Model
Fixed-order quantity models -Also called the economic order quantity, EOQ, and Q-model -Event triggered Fixed-time period models -Also called the periodic system, periodic review system, fixed-order interval system, and P-model -Time triggered
Failure Modes and Effects Analysis (FMEA)
Forces us to think through all the process steps and to go through possible errors within each process step (eg Walmart delivery to your fridge)
Other things remaining the same, and assuming that X⎯⎯⎯X¯ is smaller than USL and larger than LSL, if the standard deviation (σ) of the process decreases, process capability index (Cpk) of the process will I. Stay the same II. Will always increase III. Will always decrease IV. Will sometimes increase
II
Independent Versus Dependent Demand
Independent demand -the demand for item is independent of the demand for any other item in inventory -in independent demand the demand for various items are unrelated to each other Dependent demand -the demand for item is dependent upon the demand for some other item in the inventory -in dependent demand the need for any one item is a direct result of the need for some other item
Lean Production
Integrated activities designed to achieve high-volume, high-quality production using minimal inventories of raw materials, work-in-process, and finished goods. -involves the elimination of waste -involves the timing of production resources i.e. parts arrive at the next work station "just in time"
the basis of lean manufacturing cam from just in time manufacturing (JIT) at Toyota in
Japan
Example: Single Period Inventory Management
Newspaper Problem: -consider the problem that the newsperson has in deciding how many newspapers to put in the sales stand outside a hotel lobby each morning -too few papers and some customers will not be able to purchase a paper, and profits associated with these potential sales are lost -too many papers and the price paid for the papers that were not sold during the day will be wasted, lowering profit -this is a very common type of problem -optimizes a balance between holding inventory and not holding inventory
If a bottleneck operation has a relatively large setup time between products, which of the following techniques will best optimize the bottleneck?
Run larger batches to reduce the number of setups required.
The normal variation about a process mean or average is called?
Statistical fluctuation
Lean production uses a pull system. To enable this pull process to work smoothly, lean production demands what? Check all that apply.
Strong vendor relations High levels of quality at each stage of the process Fairly predictable demand for the end product
inventory position
The amount on-hand plus on-order minus backordered quantities. In the case where inventory has been allocated for special purposes, the inventory position is reduced by these allocated amounts.
A practice that specializes in cutting edge high risk client work must have
a high partner to junior ratio because lower level workers won't be able to deliver the necessary quality all on their own
gap analysis
a marketing research method that measures the difference between a customer's expectation of a service quality and what actually occurred (performance relative to the expectations of customers and competitors)
An hour saved at a non-bottleneck is...
a mirage and only adds an hour to its idle time
Statistical Quality Control (SQC)
a number of different techniques designed to evaluate quality from a conformance view
Six Sigma Approach
a philosophy and set of methods companies use to eliminate defects in their products and process Define--> Measure--> Analyze--> Improve--> Control--> Define
group technology
a philosophy in which similar parts are grouped into families, and the processes required to make the parts are arranged in a specialized workcell
value stream mapping
a special type of flowcharting tool used to analyze where value is or is not being added as material flows through a process. very valuable for the development of lean processes. used to visualize product flows through various processing steps. identifies all value added and non-value added processing steps. identification of wasteful processes or flows can be identified so that they can be eliminated.
Failure Mode and Effects Analysis (FMEA)
a structured approach to identify, estimate, prioritize, and evaluate risk of possible failures at each stage in the process
statistical process control
a system in which management collects and analyzes information about the production process to pinpoint quality problems in the production system. Some notable LSS SPC techniques include: -process capability -sampling -control charts
Most large consulting companies are built on information technologies and
accounting work
Fundamental to any quality program is the determination of quality specifications and the costs of
achieving (or not achieving) those specifications.
Inventory
all the money that the system has invested in purchasing things it intends to sell
Operating Expenses
all the money that the system spends to turn inventory into throughput
source inspection
also performed by the individual worker, except instead of checking for defects, the worker checks for errors that will cause defects
Malcom Baldrige National Quality Award
an award given by the President of the United States to organizations judged to be outstanding in specific managerial tasks that lead to improved quality for both products and services
population
an existing collection of entities from which samples can be drawn -the entire thing -small greek letters to indicate population statistic -N=number of values in a population
In which step of the DMAIC cycle do you determine the most likely causes of defects and understand why defects are generated?
analyze
Which of the following is not included as an inventory holding cost?
annualized cost of materials
non-bottleneck
any resource whose capacity is greater than the demand placed on it
waste
anything that does not add value from the customer's perspective eg defective products, inventories, overproduction, excess motion, processing steps.
Which of the following is the cost of quality classification for costs such as inspection, testing, and other tasks to ensure that the product or process is acceptable?
appraisal costs
Expenditures related to achieving product or service quality include all of the following
appraisal costs failure costs prevention costs
costs (costs of poor quality)
appraisal costs: costs of the inspection and testing to ensure that the product or process is acceptable prevention costs: sum of all the costs to prevent defects internal failure costs: costs for defects incurred within the system external failure costs: costs for defects that pass through the system
Anything above an upper or lower control limit (3 standard deviations of the mean) on a control chart is an area of concern or an
area of special-cause variation
Juran
avoid campaigns to do perfect work
When you remove the number of parts used in production to adjust on-hand inventory balances, you are conducting a
backflush
checksheet
basic form to standardize data collection
How often to take a sample is a trade-off between the cost of sampling and the ___________ of adjusting the system.
benefit
historically (and still typically in most firms), manufacturers have tried to balance capacity across a sequence of processes in an attempt to match capacity with market demand. However, this is the wrong thing to do--unbalanced capacity is
better
A _____________ is any resource whose capacity is less than the demand placed upon it.
bottleneck
Synchronous manufacturing has excess capacity throughout the system, except for the
bottleneck
To ensure the bottleneck never becomes idle, manufacturers often deliberately create ___________ inventory right in front of the bottleneck.
buffer
Usually, it is best to start off with frequent sampling of a process and taper off as confidence in the process
builds
control charts are an important tool for understanding the variation that we have in
business processes. Control charts allow us to differentiate whether the variation we have is normal and acceptable or if it has something special happening that should be addressed.
sample
collection of observations acquired from a population -only a portion -often denoted with a bar or lowercase letter -n=number of values in the sample
There are Two Forms of Variation
common cause variation (random) -variation due to random shift inherent in the process -only way to reduce is to make fundamental change to the system -eg the average call time varies between 1-3 min at a call center special cause variation (assignable) -variation caused by identifiable factors that may not always be present in the process -we can potentially manage this type of variation -eg a new call center, with new employees, caused the average call time to be above 5 minutes last month
Quality at the source is often discussed in the context of ______________ quality.
conformance
value stream
consists of the value-adding and non-value-adding activities required to design, order, and provide a product or service from concept to launch, order to delivery, and raw materials to customers
The most common method to improving inefficiency is to implement a uniform approach to each aspect of the
consulting job
fishbone diagrams are a great way to lay out one's first cut at a
consulting problem
Which of the following is the probability associated with accepting a low-quality lot is termed?
consumers risk
Taguchi argues that being within specification is not a yes/no decision but rather a
continuous function
The purpose of classifying items into groups is to establish the appropriate degree of
control over each item
In what operations consulting tool kit category would one find a balanced scorecard?
cost impact and payoff analysis
Crosby
cost of non conformance, quality is free
S
cost of placing an order or setup cost
internal failure costs
costs for defects incurred within the system: scrap, rework, repair
external failure costs
costs for defects that pass through the system: customer warranty replacements, loss of customers or goodwill, handling complaints, and product repair
appraisal costs
costs of the inspection and testing to ensure that the product or process is acceptable
The synchronous approach uses forward scheduling because it focuses on other
critical resources
"Analyze" Six Sigma
determine the most likely cause of defects
The Shingo System
developed in parallel to and in conflict with the statistically based approach to quality control. This system--or, to be more precise, philosophy of production management has two major aspects. 1) How to accomplish drastic cuts in equipment setup times by single minute exchange of die (SMED) procedures 2) The use of source inspection and the poke yoke system to achieve zero defects
ABC Inventory Classification
divides inventory into three groupings: high dollar volume (a), moderate dollar volume (b) and low dollar volume (c) -establishes an appropriate degree of control over each item
Inventory classifications of A, B, and C are based on:
dollar volume or frequency of use.
One hundred percent inspection is justified when the cost of inspection is low.
false
The probability associated with accepting a low-quality lot is denoted in acceptance sampling with the Greek letter alpha.
false
The producer's risk associated with rejecting a high-quality lot is denoted in acceptance sampling with the Greek letter beta.
false
True or false: Customer surveys are usually performed by operations consultants.
false
An MRP system uses backward scheduling derived from the master production schedule; whereas, synchronous manufacturing uses a ____________ scheduling system focused on critical resources.
forward
What term refers to the period of time during which the schedule is fixed and no further changes are possible?
freeze window
high levels of inventory can
hide issues present within the organization! eg if a truck breaks down or the manufacturing process breaks down but you hold a ton of inventory you have a ton of built up inventory so it doesn't really hurt you but if you parents holding a lot of inventory then this would really hurt you.
"Define" Six Sigma
identify customers and their priorities
"Improve" Six Sigma
identify means to remove the causes of defects
The ISO standards ask a company first to document and then __________ its systems for quality management.
implement
Lean production may be one of the best ways to
implement green strategies in manufacturing and service processes
A consultant is a person in a position to have some influence over an individual, a group, or an organization but has no direct power to make changes or
implement programs
If you're implementing lean manufacturing you need to do it
incrementally.
the most complex projects require
innovation and creativity
Lean production requires that activities be __________________ to achieve production using minimal inventories.
integrated
When designing a lean layout, the system designer must consider what type of logistics systems tie to the layout?
internal and external
Which of the following is the cost of quality classification for costs such as scrap, rework, or repair?
internal failure costs
When statistical fluctuations occur in a dependent sequence without any _________________ between workstations, there is no opportunity to achieve the average output.
inventory
Decision trees are widely used in examining plant and equipment _________ and R/D projects
investments
statistical process control
involves testing a random sample of output from a process to determine whether the process is producing items within a preselected range
Preventative Maintenance
is emphasized to ensure that flows are not interrupted by downtime or malfunctioning equipment. Preventative maintenance involves periodic inspection and repair designed to keep a machine reliable
the fixed order quantity model favors more expensive items because average inventory
is lower
Required quantities of a dependent demand item are simply computed, based on the number needed in each higher-level item in which
it is used.
When space is marked on the floor to identify where products should be stored is an example of which type of kanban signal?
kanban squares
TQM came about because of American concern for
lagging behind the Japanese in quality management for producing items such as automobiles
a focus on reducing cost by lowering raw material, work-in-process, and finished goods inventory to an absolute minimum.
lean
Lean logistics
lean concepts can be applied to the functions associated with the movement of material through the system. some of the key areas include optimized mode selection and pooling orders, combined multistep truckloads, optimized routing, cross docking, import/export transportation process and backhaul minimization
employees at Toyota know that if the company performs well, they will receive a bonus. Treating employees well/fairly is a hallmark of
lean manufacturing
The TOC five step application is more focused in its approach than
lean manufacturing and six sigma
six sigma refers to the philosophy and methods companies such as General Electric use to eliminate defects in their products and processes. A defect is simply any component that does not fall within the customer's specification ___________
limit
Designers establish specifications that define not only the target value of something but also acceptable
limits about the target
The size of the lot that the sample is taken from has relatively what kind of effect on the quality of protection?
little
the fixed order quantity model requires more time to maintain because every addition or withdrawl is
logged
If the design specifications are 10.00 inches ± 0.2 inch, then 9.80 is the
lower specification limit
A supply of materials at a work center allows one to:
maintain independence of operations
The broad steps in the operations consulting process are roughly the same as for any type of
management consulting
Total Quality Management (TQM)
managing the entire organization so that it excels on all dimensions of products and services that are important to the customer It has two fundamental organizational goals: 1) careful design of a product or service 2) ensuring that the organization's systems can consistently produce the design
For what is a fishbone diagram used?
map key problems, provide an initial hypothesis
Maintenance, Repair and Operating (MRO)-
materials used in production (eg cleaners & brooms) a catch all for things that don't fit in the other categories of inventory
Total Quality Management (TQM)
may be defined as managing the entire organization so it excels in all dimensions or products and services important to the customer. It has two fundamental goals: 1) Careful design of the product or service 2) Ensuring that the organizations systems can consistently produce the design
Which of the following is a plot of the averages of the samples that were taken from a process?
mean chart
The capability index is used to
measure how well our process is able to produce relative to the design specifications.
A process that is running at six sigma levels has 3.4 defects per
million
An hour saved at non bottleneck is a
mirage and only adds an hour to its idle time.
According to Goldratt, the goal of the firm is to make
money
Lean manufacturing is based on the principle that nothing will be produced until
needed
According to the theory of constraints, which of the following is an operational measurement that can be used to measure the firm's ability to make money?
net profit
the single period problem is known as the
newspaper problem
k=
number of Kanbans needed
level schedule
one that requires material pulled in a pattern uniform enough to allow production to respond to pull signals
in an assembly line we have a process batch of infinity and a transfer batch of
one unit
difference between general management and operations consulting
operations consulting leads to changes in physical or information processes whose results are measurable immediately. general management consulting deals with changes in attitudes and culture, which take longer to yield measurable results.
One Bin system (Periodic Check)
order enough to refill the bin
The managerial and clerical costs to prepare purchase or production orders are called:
ordering costs
in the upper echelons of the supply chain, which are supply points closer to the customer, stock usually is kept so that an item can be delivered quickly when a customer needs
orders
Building a lean supply chain involves taking a systematic approach to integrating the
partners
Dimensions of Quality
performance, features, reliability, conformance, durability, serviceability, aesthetics, perceived quality
dimensions of quality
performance, features, reliability, conformance, durability, serviceability, aesthetics, perceived quality
.A fixed-time period model is also called the _____.
periodic review system periodic system P-model fixed-order period model
When conducting preventive maintenance, how often should inspection and repair be planned?
periodically
internal consulting arms are common in large companies and make up part of the
planning departments
the term dependent event refers to a process sequence. If a process flows from A to B and the B to C, each process must be completed before moving on to the next step. The ability to perform the next step is dependent on the
preceding one
Periodic inspection and repair designed to keep equipment reliable is called
preventative maintenance
Because of favorable pricing in the short-term, a company is looking at ordering a larger-than-needed optimal quantity of an item, and keeping the excess in inventory. Which model is the company likely performing to arrive at this decision?
price break
Operations consulting tools can be categorized as tools for
problem definition, data gathering, data analysis, solution development, cost impact and payoff analysis, and implementation
The underlying distribution for the c-chart is based on the assumption that defects occur
randomly on each unit
finished goods inventory is more expensive than
raw material inventory
sometimes continuous improvement methods get a bad rep because they focus on
reducing labor (laying people off). reality is that they are reducing work for laborers in non value added areas and putting them in more value added areas.
R
reorder point
A fixed order quantity order uses a
reorder point, R, to trigger an order of an optimum amount of product, labeled Q.
gray hair projects
require a great deal of experience but little in the way of innovation
capacity constrained resource
resource whose utilization is close to capacity and that could be a bottleneck if not scheduled carefully
implementation tools
responsibility charts, project management techniques
most consulting firms are small, generating less that $1 Million in annual
revenue
Company X uses a visual board to communicate what the bottleneck operation is producing at any point in time. Upstream operations from the bottleneck use this information to match production rates. Goldratt would call this communication board a _____?
rope
Acceptance sampling is executed through a
sampling plan
acceptance sampling is executed through a
sampling plan
When a customer audits its supplier in regards to ISO certification, this is referred to as a ____________ certification.
second party
in services, inventory generally refers to the tangible goods to be sold and the supplies necessary to administer the
service
in manufacturing organizations waste is far more controllable than in
service organizations
The dimension of design quality that concerns the ease of repair is which of the following?
serviceability
____________ time is the time that a part spends waiting for a resource to be set up to work on this same part.
setup
cause and effect diagram
show relationships between causes and problems
capability index
shows how well the parts being produced fit into the range specified by the design specification limits.
If a company is trying to find the optimal amount of inventory to produce for a single event, it is likely to deploy which type of inventory model?
single period
for industrial applications in quality control involving the measurement of variables, it is preferable to keep the sample size
small
Because the process mean can shift in either direction, the direction of shift and its distance from the design specification set the limit on the process capability. The direction of shift is toward the
smaller number
container system
sometimes the container itself can be used as a signal device. in this case, an empty container on the factory floor visually signals the need to fill it. The amount of inventory is adjusted by simply adding or removing containers
Successful implementation of Six Sigma is based on using what?
sound personnel practices as well as technical methodologies
An inventory control system provides the organizational structure and the operating policies for maintaining and controlling goods to be
stocked
the fixed order quantity model is more appropriate for items such as critical repair parts because there is closer monitoring and therefore quicker response to a potential
stockout
An effective job of operations consulting results in an alignment between
strategy and process dimensions
Kanban pull system
the authority to produce or supply additional parts comes from downstream operations
E-procuremet
the automatic transaction, sourcing, bidding and auctions using web-based applications and the use of software that removes human interaction and integrates with the financial reporting of the firm.
procedures project
the general nature of the project is well known and the activities needed to complete it are similar to those performed on other projects
for a part waiting to go through a bottleneck, the queue is usually
the greatest
when applied to supply chains, waste reduction refers to
the optimization of the value adding activities and the elimination of non value adding activities that are part of the value stream
B
the probability associated with accepting a low quality lot
a
the probability associated with rejecting a high quality lot
Upper and lower specification limits
the range of values in a measure associated with a process that is allowable given the intended use of the product or service e.g. if the target value of dimension is 10 inches the upper and lower specification limits could be 9.8 and 10.2
throughput
the rate at which money is generated by the system through sales; goods sold
The standard practice in statistical process control for variables is to set control limits how many standard deviations from the mean?
three
multiperiod inventory systems are designed so that an item will be available for an ongoing basis
throughout the year
With regards to Goldratt's rules of production scheduling: Bottlenecks govern both
throughput and inventory in a system
With an assembly line, carrying costs relate to the
transfer batch
heijunka
translates to "smoothing" or "leveling" in Japanese
Which of the following is not a cost associated with inventory management?
transportation costs
Examples of Process Waste
transportation, inventory, defective products
According to the theory of constraints, a capacity-constrained resource (CCR) is one whose utilization is close to capacity and could be a bottleneck if it is not scheduled carefully.
true
Attributes are those quality characteristics that are classified as either conforming or not conforming to specification.
true
If the cost to change from producing one product to producing another were zero, the lot size would be very small.
true
In a process sequence where a product flows from process A to process B, process B is called the dependent process.
true
Lean production is a management philosophy and a pull system throughout the plant.
true
True or false: Lean Six Sigma combines the tools of Six Sigma with the concepts of lean manufacturing?
true
True or false: The effect of setting specification limits on product design allows businesses to monitor processes against these limits.
true
A rule of thumb when setting up a p-chart is to make the sample large enough to expect to count the attribute
twice
two-bin system
two containers of inventory; reorder when the first is empty
Miscellaneous Systems: Bin Systems
two-bin system and one-bin system
The uniqueness of service delivery leads to which source of variation?
uncertainty in task times
smoothing the production flow to dampen the reaction waves that normally occur in response to schedule variations is called
uniform plant loading
sample sizes of four or five
units seem to be the preferred numbers for sample sizes of x-bar charts.
We say that a process is capable when the mean and standard deviation of the process are operating such that the upper and lower control limits are acceptable relative to the
upper and lower control limits
In a fixed time period model, inventory is counted only at fixed time periods such as every week or every month. fixed time period models generate revenues that vary from period to period depending on
usage rates
responsibility charts
used in planning the task responsibilities for a project. Tasks are listed at the top and team/project managers are listed on the side
capability index
used to measure how well our process is capable of producing relative to the design specifications; or, how well the parts being produced fit into the range specified by the design specification limits
opportunity flow diagram
used to separate value-added from non-value-added steps in a process
Backflush
used where the parts that go into each unit of the product are periodically removed from inventory and accounted for based on the number of units produced
Quality characteristics that are measurable are called
variables
when inventory levels are low quality problems become
visible
_________________ time is the time that a part waits not for a resource but for another part so that they can be assembled together.
wait time
Variables Sampling
we measure the actual weight, volume, number of inches, or other variable measurements, and we develop control charts to determine the acceptability or rejection of the process based on those measurements.
Customer order decoupling point
where inventory is positioned to allow entities in the supply chain to operate independently eg if a product is stocked in a grocery store a customer order is never received.... this is the purpose of holding excess inventory. Inventory serves as a buffer to separate the customer from the manufacturing process.
Which of the following is one of the categories of manufacturing inventory?
work in process
The amount of safety stock is:
zσL
The Shingo System: Fail Safe Design
• Shingo's argument: --• SQC methods do not prevent defects --• Defects arise when people make errors --• Defects can be prevented by providing workers with feedback on errors -----1. Successive check -----2. Self-check -----3. Source inspection Poka-yoke includes: --• Checklists --• Special tooling that prevents workers from making errors
organization charts
•Organization Chart - key management document! •Graphic illustration of firm's organization structure •Pyramid form ... the 'skeleton' of a company •Boxes are organizational entities represented by leadership & management positions •Lines designate formal communication lines -often subject to change so care must be taken to see who actually reports to who
Shingo product inspection methods
-----1. Successive check -----2. Self-check -----3. Source inspection
concepts related to lean network design
-building a lean supply chain -specialized plants -collaboration with suppliers
Calculations of Defects per million opportunities requires three pieces of data
1) unit 2) defect 3) opportunity
inventory costs
1. Holding (or carrying) costs 2. Setup (or production change) costs 3. Ordering costs 4. Shortage costs
To generate a Cpk value of 2.00, the design limits must be __________ standard deviations away from the process mean.
6
Theory of Constraints
A specific approach used to identify and manage constraints in order to achieve the company's goals. (Movie w Alex Rogo) Identify Exploit Subordinate Elevate Step One
DMAIC
A standard approach to six-sigma projects. Define Measure Analyze Improve Control
Stakeholder Analysis
A technique used by consultants for analyzing information to determine which stakeholders' interests to focus on and how to increase stakeholder support throughout the project
Fishbone diagram
A visual identification of many potential causes of a problem (provide a working initial hypothesis as a solution to various problems)
Inventory=
Average+ Z score(standard deviation) Z value found in the chart provided based on a %
Where is acceptance sampling used?
Finished goods in a warehouse Components that have passed through a processing step Items received from another company
Which of the following is also called a periodic review system or fixed-order interval system or P-model?
Fixed-time period
Which of the following tools can be used in the Define step of the DMAIC cycle?
Flow Charts
flowcharts
Flowcharts are diagrams that show the steps in a process, often containing captions. They can be used in both manufacturing and services to track the flow of materials, information and people.
Which of the following is/are viable ways to identify the bottleneck in a process?
Run a capacity resource profile. Talk to the supervisors and workers involved with the system in operation.
International Organization for Standardization (ISO)
a specialized international agency recognized by affiliates in over 160 countries. They publish ISO standards.
Which term describes sampling performed on goods that already exist to determine what percentage of products conform to specifications?
acceptance sampling
An hour saved at the bottleneck
adds an extra hour to the entire production system
The dimension of design quality that concerns the sensory characteristics of the product is which of the following?
aesthetics
MRP uses backward scheduling.
after having been fed the master production schedule
checksheets
basic forms which help standardize data collection
A decision tree is used where in the operations consulting tool kit flow?
cost impact and payoff analysis
In what operations consulting tool kit category would one use work sampling?
data gathering
bottleneck
defined as any resource whose capacity is less than the demand placed on it. this constraint within the system limits throughput.
Cost of Quality analysis are common in industry and constitute one of the primary functions of QC
departments
self-check
done by the individual worker and is appropriate by itself on all but items that require sensory judgement
every production system needs a control point and the best place to put the control point is at the bottleneck. This point is called the
drum
At the tactical level, there is a huge market for
e-operations, product development, ISO 9000 certification, and decentralized production control systems
Using the formula in the textbook, the only parameters we need to determine the number of kanban card sets is the average number of units demanded over some time period, the container size, and the safety stock.
false
An assumption in p chart calculation is that the sample size is which of the following?
fixed
Rather than capacities being balanced, the _________ of product through the system should be balanced.
flow
value stream mapping is a two part process--first depicting the current state of the process and then a
future state of the process
ISO documents provide detailed requirements for meeting the standards and describing the tools used for improving quality in the firm. These documents are:
generic and applicable to any organization.
for a non bottleneck, wait time is usually the
greatest
lean customers
have a great understanding of their business needs and specify meaningful requirements. They value speed and flexibility and expect high levels of delivery performance.
Pareto chart
help to break down a problem into components
