FINAL: Supply Chain Ch 8

DPMO Formula (Defects per million opportunities)

(number of defects)/[(opportunity for defect)x(number of units)] THEN MULTIPLY by 1,000,000

Acceptance Sampling

Acceptance sampling is also a statistical quality control method. Acceptance sampling determines the quality of a finished batch of product based upon statistical methods using a sample of finished batch.

Juran's views

Advocated the determination of costs of quality, and the use of statistical methods. He felt costs caught the attention of managers, and statistics caught the attention of workers. Juran created the quality trilogy: quality planning, quality control, and quality improvement.

Deming's 14 Points for management

Create constancy of purpose to improve product & service. Adopt the new philosophy. Cease dependence on inspection to improve quality. End the practice of awarding business on the basis of price alone. Constantly improve the production & service system. Institute training. Institute leadership. Drive out fear. Break down barriers between departments. Eliminate slogans & exhortations. Eliminate quotas. Remove barriers to pride of workmanship. Institute program of self-improvement Take action to accomplish the transformation

The ISO certification standard for environmental management is:

ISO 14000

Juran's Quality Triology

Quality Planning- Identify internal/external customers & their needs, develop products that satisfy those needs. Mangers set goals, priorities, & compare results Quality Control- Determine what to control, establish standards of performance, measure performance, interpret the difference, & take action Quality Improvement- Show need for improvement, identify projects for improvement, implement remedies, provide control to maintain improvement.

Crosby's 4 Absolutes of Quality

Quality means conformance to requirements. Quality comes from prevention. The Quality performance standard is zero defects. The Quality measurement is the price of non-conformance.

The 5 S's of Industrial Housekeeping

Sort Set in Order Sweep Standardize Self Discipline

Crosby's views

Strive for zero defects. Quality is free⎯quality programs invariably paid for themselves. Developed four absolutes of quality⎯conform to requirements, practice prevention, zero defects, the measure of quality is the price of nonconformance

Elements of Lean Production

Waste Reduction - Firms reduce costs & add value by eliminating waste from the productive system. Waste encompasses wait times, inventories, material & people movement, processing steps, variability, any other non-value-adding activity. Continuous Improvement (Kaizan) Workforce Empowerment Lean Layouts Inventory & Setup Time Reduction Small Batch Scheduling - Small batch scheduling can drive down costs by: Reducing raw materials, WIP, & finished goods inventories Makes the firm more flexible to meet customer demand.

Modern supply chains simultaneously pursue the goals of high-quality, fast response, and low cost because customers nowadays want both high levels of quality and responsiveness. A key manufacturing philosophy that emphasizes waste elimination and minimizing inventories to expose problems is: a. Just in Time b. Quick Response c. Efficient Consumer Response d. Total Quality Management

a. Just in Time

Japanese manufacturing firms sometimes create cooperative coalitions with their suppliers in order to provide the suppliers with a certain degree of financial support. What are these cooperative coalitions called? a. Jidoka Networks b. Keiretsu Networks c. Kanban Networks d. Kaizen Networks

b. Keiretsu Networks

T OR F For a certain loaf of bread it was found that it measured 16 inches in length, 4 inches in height, and 4 inches across, it was also found to weigh 1 pound; all of these measures can be considered attribute data.

false

T OR F Organizations practicing lean production often increase their inventory levels in the long-run in order to create a cushion against variability so that they can investigate and eliminate the weaknesses of their system.

false

T OR F When designing a manufacturing or service process, or even during the reengineering of such a process, a Pareto chart would be an essential tool for evaluating the process in terms of its action elements, waiting periods, and process flow

false, pareto chart is a bar graph so no

Stages of Supply Chain management Evolution

1. Internal Focused (Silo Effect) - internal performance measures 2. Functional Integration - emphasis on cost reduction, internal flow of goods 3. Internal Integration - lean activities for goods, integration of flow in a firm 4. External Integration - integration with suppliers and customers, alliance development

Elements of Six Sigma

1. focus on the customer 2. workforce involvement 3. Deming's philosophies 4. Crosby's philosophies 5. Juran's philosophies 6. The guidelines of the Malcolm Baldrige National Quality Award 7. The guidelines/standards required to become ISO 9000 certified 8. Utilization of Six Sigma tools: flow diagrams, check sheets, Pareto charts, cause-and-effect diagrams, SPC, acceptance sampling

Calculate the number of inventory containers required, given the following: Demand rate = 10 parts per hour, Safety stock required = 15% Container size = 5 parts, Time to cycle through entire system = 6 hours

14

Which of the following quality gurus believed that companies should strive for zero defects and that quality was, in a sense, free since quality improvement programs invariably paid for themselves?

Crosby

Ways employees contribute to eliminating waste, creating a flexible production system, and improving the organization

Cross trained employees add processing flexibility Employees are capable of inspecting quality throughout the processing stages Employees not only identify problems, but are empowered to fix problems Skilled and well trained employees are more equipped to identify and fix high-level problems An intelligent workforce is more capable of supporting a strong program of continuous improvement

The DMAIC Improvement Cycle

Define Measure Analyze Improve Control

Which quality guru (expert) advocated the elimination of quotas for workers

Demming

T or F: Lean production is an operating philosophy or mindset that essentially attempts to minimize the impact of system variability and flaws in forecasting through the use of high safety stock inventories

FALSE, not through the use of high safety stock inventories

Lean production systems are sometimes referred to as pull systems because demand from customers activates the production actions of the manufacturing facilities. In order for this demand to be communicated to everyone in the supply chain/manufacturing facility a signal must be passed from downstream processing centers to the upstream processing centers. This system of relaying signals is referred to as a:

Kanban Pull system

THE 4 M's of the Cause and Effect Diagram

Methods, Machinery, manpower, material (NOT MONEY)

SPC

SPC stands for statistical process control. SPC is a statistical quality control method. SPC monitors quality during production through the use of statistical methods.

THE SEVEN WASTES

Scrap and Rework Excess Movement Excess Inventory Transportation Waiting Over Processing Over Producing

Difference between SPC and acceptance sampling

While both SPC and acceptance sampling are statistical quality control methods, SPC monitors quality during production in the hopes of detecting defects early in the process and preventing continued production of defective product. Acceptance sampling, on the other hand, measures quality of finished products. Acceptance sampling is utilized only after processing is complete

Which of the following is NOT one of Toyota's seven wastes? a. excess inventories b. environmental waste c. waiting time d. scrap and rework

b. environmental waste

Six Sigma

basically everything produced is non defective, a goal that companies strive to work towards DPMO = Defects per million opportunities DPMO = (Number of defects)/(opportunity for a defect)x(number of units) then multiply this by 1,000,000

Which of the following is NOT consistent with the lean philosophy? a. Cross-training employees to increase processing flexibility b. Developing a culture of continuous improvement within the organization c. Increasing batch size to take advantage of economies of scale d. Positioning WIP inventories near each processing center

c. Increasing batch size to take advantage of economies of scale

Six Sigma

close to perfect, get 99.999% without defects

Which of the following are among the most important elements of the lean production philosophy? a. Quality inspections and a standardized product line b. Fully automated assembly lines and a large supplier base c. Large inventories and quality inspections d. Waste reduction and value enhancement

d. Waste reduction and value enhancement

Demings's views

managers are ultimately responsible for the organization's problems. Management should fix problems by using the right tools and resources, demonstrating employee encouragement, program commitment, and facilitating cultural change. Deming also developed the 14 points for management that are similar to the principles of TQM

Lean Production

operating philosophy of waste reduction & value enhancement & was originally created as Toyota Production System (TPS) by key Toyota executives

T OR F Acceptance sampling is a statistical technique that enables a reject or accept decision to be made based on information obtained from a representative sample drawn from the population.

true

T OR F Manufacturing layouts for an organization practicing lean manufacturing principles seek to maximize operator visibility, maintain an effective and efficient flow of people and materials, and minimize the distance that work in process must travel from one processing center to another processing center.

true

T OR F Statistical process control uses control charts to monitor the outputs of a process to identify variations due to assignable causes from variations due to common causes.

true

T OR F The primary design objective with lean layouts is to reduce wasted movements of workers, customers, and/or work-in-process

true

T or F: Channel integration is a supply chain term which refers to how a manufacturing firm within a supply chain attempts to create strategic alliances not only with their immediate suppliers but also with the suppliers' suppliers and in the other direction not only reaching out to its immediate customers but also the customer's customers.

true

Lean Production

waste reduction close supplier and customer relationship effective layouts promoting programs of continuous improvement