Intro to Supply Chain, Rutgers, Chapter 8
Scatter Diagrams
The values of two variables plotted along two axes, to reveal any correlation present.
The Seven Tools of Quality Control
1. Check Sheets 2. Cause and Effect Diagrams 3. Control Charts 4. Histograms 5. Pareto Analysis 6. Scatter Diagrams 7. Flow Diagram
Two Key Methodologies of Six Sigma
1. DMADV 2. DMAIC
Cost of Quality can be divided into the:
- cost of Good Quality - cost of Poor Quality
Two broad strategies of manufacturing processes
1. Intermittent Processes 2. Repetitive Processes
The Components of LEAN Manufacturing
1. Waste Reduction 2. LEAN Layouts 3. Inventory, Setup Time, & Changeover Time Reduction 4. Small Batch Scheduling and Uniform Plant Loading 5. LEAN Supply Chain Relationships 6. Workforce Empowerment 7. Continuous Improvement
Line Process
A Repetitive Process has standard products with a limited number of variations moving on an assembly line through stages of production
Continuous Process
A Repetitive Process is used to manufacture such items as gasoline, laundry detergent and chemicals. Inflexible processes. High capital investment.
Respect for People
A component of LEAN Manufacturing Consists of the Role of Workers, Management, and Suppliers The goal is NOT to reduce the number of people in an organization, it is to use people resources more wisely.
Continuous Improvement (Kaizen)
A component of LEAN Manufacturing Continuous approach to reduce process, delivery, & quality problems, such as machine breakdown problems, setup problems, & internal quality problems.
LEAN Supply Chain Relationships
A component of LEAN Manufacturing Firms develop lean supply chain relationships with key customers and key suppliers Both customers and suppliers get connected in ways that allow them to easily exchange information, demand data, and the visibility of status.
Waste Reduction
A component of LEAN manufacturing Firms reduce costs and add value by eliminating waste from the production system. Waste encompasses wait times, inventories, material and people movement, processing steps, variability, any other non-value-adding activity.
Lean Layouts
A component of LEAN manufacturing Move people and materials when and where needed, and as soon as possible
Histograms
A graphical display where the data is grouped into ranges
Six Sigma (Management definition)
A quality management process Six Sigma focuses on improving the quality of process outputs by identifying and removing the causes of effects (errors) and minimizing variability in manufacturing and business processes.
The 5 whys
A technique in which you repeatedly ask the question "Why?" to help peel away the layers of symptoms that can lead to the root cause of a problem
Project Process
An Intermittent Process (also known as a "Job Shop") creates a custom product for each customer. High customization.
Batch Process
An Intermittent Process manufactures a small quantity of an item in a single production run
Cost of Quality
An approach that supports a company's efforts to determine the level of resources necessary to prevent poor quality, and to evaluate the quality of the company's products and services
Cost of Good Quality
Appraisal Costs Prevention Costs
Setup Time and Changeover Time Reduction
Are both considered a waste as they are times when the equipment is not performing its intended function . . . . producing product.
Appraisal Costs
Associated with the evaluation of purchased materials, processes, products, and services to ensure that they conform to specifications.
Phil Crosby
Coined the phrase "quality is free" (which is also the title of his book) as defects are costly. He introduced the concepts of zero defects, and focus on prevention and not inspection.
Manufacturing Strategies
Companies must develop a manufacturing strategy that suits the types of products that they produce, their customers expectations and their strengths
Role of Management
Create cultural change needed for LEAN to succeed -provide atmosphere of cooperation -empower workers to take action based on their ideas -develop incentive system for LEAN behaviors
Quality is Defined by the Customer
Customers expect performance, reliability, competitive prices, on-time delivery, good service, clear and correct transaction processing and more.
DMADV Methodology
Define --> Measure --> Analyze --> Design --> Verify: which is a data-driven quality strategy for designing products & processes. This methodology is used when the company wants to create a new product design or business process that is more predictable and defect free.
DMAIC Methodology
Define --> Measure --> Analyze --> Improve --> Control: which is a data-driven quality strategy for improving products & processes. This methodology is used when the company wants to improve an existing product or business process.
Control Charts
Graph to study how a process changes over time
Cost of Poor Quality
Internal Failure Costs External Failure Costs
Total Quality Management (TQM)
Is a management philosophy based on the principle that every employee must be committed to maintaining high standards of work in every aspect of a company's operations.
Changeover Time
Is the time taken to adapt and modify the manufacturing equipment and systems to produce a different product or a new batch of the same product.
Setup Time
Is the time taken to prepare and format the manufacturing equipment and systems for production.
Role of Supplier
LEAN builds long-term supplier relationships: -Partner with suppliers. -Improve process quality. -Information sharing. -Goal to have single-source suppliers.
Types of Manufacturing Strategies
Make-to-Stock (MTS) Make-to-Order (MTO) Assemble-to-Order (ATO) Engineer-to-Order (ETO)
Sort
One of the five pillars of the visual workplace Keep only necessary items in the workplace, eliminate the rest
Straighten
One of the five pillars of the visual workplace Organize and arrange items to promote an efficient workflow
Sustain
One of the five pillars of the visual workplace Stick to the rules. Maintain and review the standards
Shine
One of the five pillars of the visual workplace Clean the work area so it is neat and tidy
Standardize
One of the five pillars of the visual workplace Schedule regular cleaning and maintenance
Role of Workers
Perform tasks and actively pursuing company goals: -Improve production process -Correct quality problems -Monitor quality
Non-Value Added Process
Process steps that take time, resources, or space, but do not add value to the product or service.
Value Added Process
Process steps that transform or shape a product or service which is eventually sold to a customer.
Assemble to Order (ATO)
Products ordered by customers are produced quickly and are customizable to a certain extent
Lean Green Practices
Reduce the cost of environmental management Lead to improved environmental performance. Increase the possibility that firms will adopt more advanced environmental management
Flow Diagram
Sequence of movements or actions of people or things involved in a complex system or activity
People Involvement
Six Sigma follows a structured methodology. It is important that all Six Sigma team members are assigned specific well-defined Six Sigma "roles" with measurable objectives.
The Five Pillars of the Visual Workplace
Sort Straighten Shine Standardize Sustain
Use of Technical Tools
Statistical quality control. Six Sigma provides a statistical approach for solving any problem and thereby improves the quality level of the product as well as the company.
W. Edwards Deming
Stressed management's responsibility for quality. Is widely considered the father of TQM. He is the creator of the Plan-Do-Check-Act model.
Traditional Inventory Approach
Supply chains work as "push" systems, and inventory is carried to cover up problems
Engineer to Order (ETO)
The component is designed, engineered, and built to specifications only after the order has been received.
Manufacturing
To process or make raw materials or components into a finished product , especially by means of a large-scale industrial operation, i.e., mass production.
Small Batch Scheduling
Will facilitate producing at the same rate as customer demand. Creates a Smooth Workload as production can be synchronized with customer demand, facilitating a pull system.
the 5 hows
a questioning technique for drilling down into the details of a potential solution to a known problem. you keep asking how
Efficient Consumer Response (ECR)
a strategy to increase the level of services to consumers through close cooperation among retailers, wholesalers, and manufacturers.
Prevention Costs
are related to the design, implementation, and maintenance of the quality management system. They are planned, and experience before actual products or materials are acquired or produced
Keiretsu Relationships
involves companies both upstream and downstream of a manufacturing process, remaining independent but working closely together for mutual benefit
Joseph Juran
defined quality as "fitness for use". He developed the concept of the cost of quality. Quality Trilogy: Quality planning, Quality control Quality improvement
Pareto Analysis
for presenting data in an organized fashion, indicating process problems from most to least severe
Six Sigma
is a disciplined, statistical-based, data-driven methodology for identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and in business processes. It was originally developed by Motorola.
Make to Order (MTO)
is a manufacturing strategy in which manufacturing starts only after a customer's order is received.
LEAN
is an operating philosophy of waste reduction and value enhancement and was originally created as the Toyota Production System (TPS) by key Toyota executives. THIS IS A PHILOSOPHY
Value
is the inherent worth of a product as judged by the customer, and reflected in its selling price and market demand.
Operations Management
managing the process to convert resources into goods and services, in alignment with the company's business strategy as efficiently and effectively as possible, while also controlling costs.
Make to Stock (MTS)
means to manufacture products for stock based on demand forecasts. Push system.
External Failure Costs
occur when the product or service does not meet the designed quality standards, but is not detected until after the product or service is delivered to the customer
Carbon Neutral
offsetting the carbon footprint of a firm's operations
Voice of the Customer (VOC)
term used in business to describe the in-depth process of capturing internal and external customer's stated and unstated expectations, preferences, likes, and dislikes
Total Cost of Manufacturing (TCM)
the complete cost of producing and delivering products to your customers
Manufacturing Management
the management of all the processes which are involved in manufacturing
Quick Response
the rapid replenishment of a customer's stock by a supplier with direct access to data from the customer's point of sale.
cause and effect diagram
used to aid in brainstorming and isolating the causes of a problem
Check Sheets
used to determine frequencies for specific problems
Intermittent Processes
used to produce a large variety of products with different processing requirements in lower volumes.
Repetitive Processes
used to produce one, or a few, standardized products in high volumes.
LEAN goals
- Satisfying internal customer demand - Communicating demand forecasts and production schedules up the supply chain - Quickly moving products in the production system - Optimizing inventory levels across the supply chain - Increasing the value, capabilities, and flexibility of the workforce through cross-training - Extending collaboration and alliances beyond just 1st tier suppliers and customers to include 2nd and 3rd tier suppliers and customers as well
Inventory Pull Approach
-each stage in the supply chain requests quantities needed from the previous stage -no excess inventory generated -reduced inventory exposes problems
Five Steps to LEAN
1. Define Value 2. Map Value Stream 3. Create Flow 4. Establish Pull 5. Pursuit Perfection
LEAN is composed of three components working in unison:
1. LEAN Manufacturing 2. Total Quality Management 3. Respect for People
What does TCM include?
1. Manufacturing and Procurement activities 2. Inventory and Warehousing activities 3. Transportation activities
Three Foundation Aspects of Six Sigma
1. Quality is Defined by the customer 2. Use of technical tools 3. People Involement
The key principles of TQM
1. management commitment 2. employee empowerment 3. fact based decision making 4. continuous improvement 5. customer focus
Workforce Commitment
A Component of LEAN Manufacturing Managers must support LEAN Manufacturing by providing subordinates with the skills, tools, time, and other necessary resources to identify problems and implement solutions
Inventory, Setup Time, & Changeover Time Reduction
A LEAN Manufacturing component Excess inventory takes up space, and costs money to hold, maintain, protect, secure, and insure. Reducing inventory can free up capital and reduce holding costs.
Small Batch Scheduling and Uniform Plant Loading
A LEAN Manufacturing component The ideal schedule is to produce every product as quickly as possible and at the same rate as customer demand. Think of a snake trying to swallow a large meal.
Kaoru Ishikawa
Developed one the first tools in the quality management process, the cause and effect diagram, which is also called the "Ishikawa" or "fishbone" diagram.
Uniform Plant Loading
Planning up to capacity in earlier time periods to meet demand in later time periods. Helps suppliers better plan production, and prevents demand exeeding capacity at points in the planning horizon.
Just-in-Time (JIT)
an inventory strategy to decrease waste by receiving materials only when and as needed in the production process, thereby reducing inventory costs.