BUSQOM 1070 - Exam 3
Waiting Time
- A central problem in many service settings - Reducing "this" costs money, but raises customer satisfaction and throughput - Easier to value when the people involved are employees; harder to value when they are customers - Lost sales is one value (often a low estimate)
Statistical Quality Control (SQC) 1. Assignable Variation 2. Common (or "Natural") Variation
- A number of different techniques designed to evaluate quality from a conformance view - Usually involves periodic sampling of a process and analysis of this data using statistically-derived performance criteria - Focus on the quantitative aspects of quality management - Processes usually exhibit some variation in their output; there are two common types... 1. _____ Variation: variation that is caused by factors that can be identified and managed (e.g., machine wear, poor raw materials, fatigued workers) 2. _____ (or "_____") Variation: variation that is inherent in the process itself (e.g., result of the type of equipment used to complete a process)
Kanban Container System
Container is used as a signal device
Activities
Defined within the context of the WBS; pieces of work that consume time
Conformance Quality
Degree to which the product/service design specifications are met
The Toyota Production System - Elimination of Waste - Respect for People
Developed TIMWOOD and worked to improve quality and productivity; based upon two philosophies that are central to Japanese culture... - _____ of _____: from overproduction, waiting time, transportation, inventory, processing, motion, and product defects - _____ for _____: lifetime employment, level payrolls in times of business deterioration, job security, unions, bonuses, and viewing workers as assets, not machines
Kanban Golf Balls
Each colored golf ball signals production of a different item
ISO 26000
Formal standards for socially responsible behavior
- Earliest Start Time Rule - Earliest Finish Time Rule
Forward Pass - Begin at the starting event and work forward - _____ _____ _____ Rule: states that, if an activity has only a single immediate predecessor, its ES = EF of the predecessor; also states that, if an activity has multiple immediate predecessors, its ES is the maximum of all the EF values of its predecessors (ES = Max {EFs of all immediate predecessors}) - _____ _____ _____ Rule: states that the earliest finish time (EF) of an activity is its earliest start time (ES) plus its duration (EF = Duration + ES)
Task
Further subdivision of a project, usually not longer that several months and performed by a single group or organization
Assignable; Natural/Common
It is the duty of operations managers to eliminate _____ variation and monitor/reduce _____ variation
- Leven Schedule - Freeze Window - Backflush - Uniform Plant Loading - Kanban
Lean Production Schedules - _____ _____: schedule that requires material to be pulled into final assembly in a pattern uniform enough to allow the various elements of production to respond to pull signals - _____ _____: period of time during which the schedule is fixed and no further changes are possible - _____: 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 - _____ _____ _____: smoothing the production flow to dampen schedule variation - _____: signaling device used to control production; uses a signaling device to regulate flow in a "pull" system
- Lean Layouts - Lean Production Schedules - Lean Supply Chains
Lean Supply Chain Design Principles - Lean _____: 5S, group tech, quality at the source, JIT production - Lean _____ _____: uniform plant loading, kanban production control system, determination of members of kanbans needed, minimized setup times - Lean _____ _____: specialized plants, working with suppliers, building lean supply chains
Kanban Squares
Marked spaces on the floor to identify where material should be stored
Subtask
May be used to further subdivide a project into more meaningful pieces, beyond just tasks
Waterfall Agile
Product Management _____ - Requirements - Qtr 1 - Design - Qtr 2 - Build - Qtr 3 & Qtr 4 - Test - Qtr 5 - If rebuilding is necessary, building and testing could include Qtr 6 - Takes extensive time _____ - Works in 2-week "sprints" (those design-build-test- requirements cycles) - Scrum master oversees these sprints - Customer representative provides feedback on behalf of customers - This feedback works as the requirements for the next 2-week sprint; you may cycle around one 2-week sprint a few times before moving on to the next - User stories help outline what customer segments want
EVM
Project Tracking with _____ _____ _____ - With predefined methods of quantifying the quantity of work accomplished, provides information according to the schedule - Also provides much more information in general - A combined view gives an overview of project performance in terms of the original plan - Can compare... 1. BCWS with BCWP; illustrates schedule performance aspect 2. BCWP with actual cost; tells if a project is under- or over-budget relative to the amount of work accomplished 3. BCWS and BCWP with actual cost; true understanding of cost/schedule performances relies first on measuring technical performance objectively
Process Control Limits
Range of variation that a process is able to maintain with a high degree of certainty
Customers; Services - Customer Contact - Creation of the Service - Extent of Contact
Service organizations are classified according to their _____ (e.g., individuals, businesses) and their _____ (e.g., financial, healthcare)... - _____ _____: physical presence of the customer in the system; higher degree makes the service system harder to control (more variability in time of demand, nature of service, and quality) - _____ of the _____: work process involved in providing the service itself (e.g., design work, service blueprinting) - _____ of _____: percentage of time the customer must be in the system relative to the total time it takes to perform the service
- Production Lot Size - Lead Time
Setting up a kanban system requires determining the number of kanban cards (or containers) needed... - Each container represents the minimum _____ _____ _____ - An accurate estimate of the _____ _____ is required to produce a container; is key to determining how many kanbans are required - The kanban systems controls the amount of material that can be in process at a time - Can be adjusted to fit the current way the system is operating because card sets can be easily added or removed from the system
Gantt Chart
Shows in a graphic manner the amount of time involved and the sequence in which activities can be performed; often referred to as a "bar chart"
Customer Value - Value-Adding Activities - Non-Value-Adding Activities - Essential Non-Value-Adding Activities
Something for which the customer is willing to pay... - _____-_____ Activities: transform materials and information into something the customer wants; customers will pay for this - _____-_____-_____ Activities: consume resources and don't directly contribute to the end result desired by the customer; reworking, for example, is something customers don't care about on their end, as is waste - _____ _____-_____-_____ Activities: required to assure quality or comply with regulations (e.g., inspection)
Mean (X̅)
The center point of a set of numbers (i.e., average)
Slack Time
Time that an activity can be delayed without delaying the entire project; difference between the late and early start times of an activity
Investment; Loss (or Waste)
Within COQ, appraisal and prevention costs are viewed as _____ costs, whereas internal and external failure costs are viewed as _____ (or _____) costs
Waste
- Anything that doesn't add value from the customer's perspective (e.g., defective products, overproduction, inventories, excess motion, processing steps, transportation, waiting) - Easier to manage in manufacturing processes than in service processes - Services are more uncertain (e.g., uncertain task times that could lead to negative exponential distribution of times, uncertain demand that requires available capacity, customer involvement to create the service)
Matrix Project
- Blend of pure and functional project structures; people from different functional areas work on the project, possibly only part time - Projects borrow resources and people from different functional areas - Dedicated project manager decides what tasks need to be performed and when, but the functional managers control which people and tech to use - Pros: enhances communication between functional divisions, project manager is responsible for project completion, minimize duplication of resources, team members have a functional home after project, policies of the parent organization are followed - Cons: two bosses with the functional manager often being listened to before the project manager, doomed to failure unless the project manager has strong negotiation skills, danger of suboptimization since project managers hoard resources for their own projects
Service Package 1. Supporting Facility 2. Facilitating Goods 3. Information 4. Explicit Services 5. Implicit Services
- Bundle of goods and services that is provided in some environment; every service has one - Consists of five features... 1. _____ _____: physical resources that must be in place before a service can be offered (e.g., post offices, salons, auto-body shops) 2. _____ _____: material purchased or consumed by the buyer or the items provided to the customer (e.g., shampoo, car oil) 3. _____: operations data or information that is provided by the customer to enable efficient and customized services (e.g., payroll) 4. _____ _____: benefits that are readily observable and which make up the essential features of the service (e.g., haircut, oil change) 5. _____ _____: psychological benefits or other extrinsic features of the service (e.g., prestige, privacy, brand)
Timing
- Careful scheduling of activities - Helps us achieve lean manufacturing
Web Platform Businesses
- Company that creates value by enabling the exchange of information between two or more independent groups, usually consumers and providers of a service or product (e.g., eBay, YouTube, Airbnb) - They don't own a means for providing services/goods, but they provide a way to connect parties interested in conducting business - Don't own inventory or the business that works through the platform - Aggregator that brings together players via the internet - Creates value by managing the transactions between the consumers and providers; this represents the "factory" of this type of business
Monte-Carlo Simulation
- Computer-based technique that performs probabilistic forecasting of possible outcomes and the likelihood that each will occur - Helpful, since task durations in real life involve uncertainty - Harnesses computer processing power to model tasks with programmable distributions - How it works... 1. Set up the project precedence network in a computer model 2. Specify the probability distribution for each task that is not deterministic (fixed), using either historical data or best judgment; these tasks are probabilistic 3. Run simulations repeatedly and randomly select the task time for each probabilistic task based on their distribution; calculate the project end time for each simulation 4. Build a representative project end time distribution, a histogram of the results of all the simulations; more simulations run = more representative of the actual project end time distribution
Work Breakdown Structure (WBS)
- Defines the hierarchy of project tasks, subtasks, and work packages - List of everything you plan to do broken down into manageable pieces; denotes time, schedule, and costs - In total, it is the complete description of all work necessary to accomplish the project - Shows the amount of detail put into levels depends on the level at which a single individual or organization can be assigned responsibility for accomplishing the package, as well as the level at which budget and cost data will be collected during the project - Primary communications tool for planning, monitoring, and controlling the project - Outcomes or deliverables are best practice for designing these
Cost of Quality (COQ) 1. Appraisal Costs 2. Prevention Costs 3. Internal Failure Costs 4. External Failure Costs
- Expenditures related to achieving product/service quality (e.g., costs of prevention, appraisal, internal failure, external failure) - Estimated at between 15% - 20% of every sales dollar - Generally, the correct cost for a well-run quality management program should be < 2.5% - Justified by the assumptions that failures occur, prevention is cheaper than failure, and performance can be measured - Four types... 1. _____ Costs: costs of the inspection, testing, and other tasks to ensure that the product or process is acceptable (labor, tools/equipment, and products used in quality tests) 2. _____ Costs: costs of preventing defects (identifying causes of defects, implementing corrective actions, training personnel, redesigning products or systems, purchasing new equipment, making modifications) 3. _____ _____ Costs: costs for defects incurred within the system (scrap, rework, repair) 4. _____ _____ Costs: costs for defects that pass through the system (warranty replacements, loss of goodwill, managing complaints, repairing products)
Time-Cost Model
- Extension of the critical path models that considers the trade-off between the time required to complete an activity and the cost of the project - Considers direct activity costs, indirect costs of the project, and activity completion times - Attempts to develop a minimum-cost schedule for an entire project and to control expenditures during the project - Often referred to as "crashing" the project
Service Blueprint
- Flowchart that acts as the standard tool for service process design - Distinguishes high customer contact aspects of a service from those activities that the customer doesn't see using a line of visibility - Fail-safing involves using "this" to identify opportunities for failure and then establishing procedures to prevent mistakes from becoming defects (i.e., poka-yokes) - Contains levels... - The top level shows activities that are under the control of the customer - The next level are activities performed by the service manager in handling the customer - The third level is the repair activities performed in the garage The lowest level is the internal accounting activity
ISO 9000
- Formal quality management principles for quality certification developed by the International Organization for Standardization; directs firms to document what they do, then do as they document - Based on the idea that defects can be prevented through the planning and application of best practices - Main tenants include customer focus, leadership, involvement of people, process of approach, continual improvement, factual approach to decision making, and mutually beneficial supplier relationships - Being certified makes firms more attractive since it implies quality assurance - Three forms of certification include self-auditing (1st party), customer auditing (2nd party), or auditing by a quality standards agency (3rd party)
ISO 14000
- Formal standards for environmental management - Defines standards for monitoring air, water, and soil quality - Encourages the inclusion of environmental aspects in product design and the development of environment-friendly products/services
Work Package
- Group of activities combined to be assignable to a single organizational unit - Provides a description of what is to be done, when it is to be started and completed, the budget, measures of performance and project milestones (e.g., specific events) to be reached at points in time
Fitness for Use
- How well design quality and conformance quality meet customers' objectives for those products - Found by identifying dimensions of a product/service that the customer wants and developing a quality control program to ensure these dimensions are met
- Assignable - Natural
- If there are _____ causes of variation, then the output is not stable nor predictable and not in control; with samples giving us varying distributions over time, we can't make solid predictions with them - If only _____ causes are present, then the distribution is stable/predictable and the process is in control; with samples giving us the same or similar distributions over time, we can make solid predictions with them
Collaborate with Suppliers
- Important part of process - Confidence in their delivery commitment allows reductions of buffer inventories - Share projections with them and link with them online - Improved communication allows level production scheduling
Lean Production
- Integrated activities designed to achieve high-volume production using minimal inventories of raw materials, WIP, and finished goods; parts arrive at the next workstation JIT -Focus on eliminating as much waste as possible; this could include unnecessary processing steps, excess inventory, etc. - Lower inventories is an outcome, but not every industry has inventories (e.g., service industries such as salons) - Nothing will be produced until it is needed, so there must be high levels of quality at each stage of the process, strong vendor relations, and a fairly predictable demand
External Benchmarking 1. Improvement 2. Data
- Looks outside the company to examine what excellent performers inside and outside the company's industry are doing in the way of quality - Is a 2-step process... 1. Identify processes needing _____; identify a firm that is the world leader in performing the process 2. Analyze _____; find gaps between what your company is doing and what high-performers are doing
Quality at the Source
- Making the person who does the work responsible for ensuring that specifications are met; they're expected to make their part correctly the first time and to stop the process immediately if there is a problem - Quality mindset among the people actually doing the job
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 - Is a quality system, which includes goals and objectives, measures of goals and objectives, processes, and reviews and decision-making - Has two fundamental operational goals... 1. Careful design of product or service (e.g., good quality) 2. Assurance that an organization's systems can consistently produce a design (e.g., continuous improvement, reduction of waste and variance)
X̅-Charts
- Monitor variance in "central tendency" (i.e., "average" or "mean") - Do this by plotting the means of samples that were taken from a process - To find upper and lower limits, if standard deviation is known we use... UCL(X̅) = X̅ + z ✕ S-subX̅ LCL(X̅) = X̅ - z ✕ S-subX̅ - If standard deviation is NOT known we use... UCL(X̅) = X̅ + A-sub2 ✕ Ṝ LCL(X̅) = X̅ - A-sub2 ✕ Ṝ
Ṝ-Charts
- Monitor variance in dispersion - Plot the average of the range within each sample (the range being the difference between the highest and lowest numbers in the sample) - To find upper and lower limits, we use... UCL(Ṝ) = D-sub4 ✕ Ṝ LCL(Ṝ) = D-sub3 ✕ Ṝ
Critical Path Method (CPM)
- Network-planning model based on the assumptions that project activity times can be estimated accurately and that they don't vary - Uses the following steps... 1. Identify each activity to be done and estimate how long it will take to complete it 2. Determine the required sequence of activities and construct a network diagram reflecting the precedence relationships 3. Determine the critical path; choose the longest path or the path without slack 4. Determine the early start/finish and late start/finish schedule (with forward and backward pass) and identify slack, if any - Use the information in #4 to determine the required sequence of activities in #2
Lean Logic
- Nothing will be produced until it is needed - Sales pull replacements from the last position in the system - This triggers an order to the factory production line - Each upstream station the pulls from the next station further upstream
Project Management Information Software
- Offered by over 100 companies (e.g., Microsoft Project is popular for managing mis-sized projects, Oracle's Primavera Project Planner is often used for very large projects) - Help to schedule tasks, assign resources to specific tasks, track project progress, compare monthly baselines, show deviations between planned start/end times and new start/end times - Also spot over-allocation of resources (e.g., planned use exceeds available supply, more resources are required or rescheduling is necessary); taking advantage of task slack can free up resources
Service
- Output of a process that is intangible and cannot be patented - Usually require some degree of interaction with the customer
Project Management 1. Derivative 2. Breakthrough 3. Platform
- Panning, directing, and controlling resources (e.g., people, equipment, material) to meet the technical, cost, and time constraints of a project - Important because, at the highest levels of an organization, management often involves juggling a portfolio to achieve business goals - Can range from the development of new products to the revision of old products, creation of new marketing plans, etc. - Products are picked from the following types... 1. _____: incremental changes such as new product packaging or no-frills versions 2. _____: major changes that create entirely new markets 3. _____: fundamental improvements to existing products
Preventive Maintenance
- Periodic inspection and repair designed to keep equipment reliable; ensures that flows aren't interrupted by downtime or malfunctioning equipment - Operators perform much of the maintenance; they are more familiar with their machines - Machines are easier to repair since lean operators favor several simple machines rather than one large and complex machine
Six Sigma
- Philosophy and set of methods that companies use to eliminate defects in their products and processes - Statistical term that describes a quality goal of no more than 3.4 defects out of every million (DPMO) units - Views process variation as the enemy of quality and as a main contributor to defects - Six standard deviations out; three above the mean and three below
Group Technology
- Philosophy in which similar parts are grouped into families, and the processes required to make the parts are arranged in a specialized work cells - Considers all operations required to make a part and then groups those machines together - Cells eliminate movement and queue time between operations and reduces inventory and the number of employees required
Poka-Yokes
- Procedures that block the inevitable mistake from becoming a service defect; help us avoid mistakes - Common in factories - Examples include warning methods, physical/visual contact methods, and the three Ts (task to be done, treatment accorded to the customer, and tangible features of the service facility) - Other examples include height bars at amusement parks, beepers in ATMs to warn people to remove their cards, reminder calls for appointments, ect.
Just-in-Time (JIT) Production
- Producing what is needed when needed and nothing more - Anything over the minimum amount necessary is viewed as waste - Typically applied to repetitive manufacturing, when the same or similar items are made one after another - Goal is to drive all inventory queues to zero, thus minimizing inventory investment and shortening lead times - Low inventory levels expose quality problems otherwise hidden by excess inventories and staff - Vendors ship several times a day to their customers to keep lot sizes small and inventory low; ideal lot size production batch is 1
- Setup; Changeover; Setup; Optimal Order Quantity - EOQ
- Reduction in _____ and _____ times are necessary to achieve a smooth flow; kanban significantly reduces the _____ costs as well as the corresponding _____ _____ _____ - This can also help lower _____ _____ _____ to a more obtainable number
Functional Project
- Responsibility for the project lies within one functional division of the firm; employees from that division work on the project, usually only part time - Remain part of their functional units and typically aren't dedicated to the project - Pros: members work on several projects, technical expertise is maintained with the functional area even if individuals leave the project, functional area is home after the project is completed so functional specialists can advance vertically, the critical mass of specialized functional-area experts creates synergistic solutions - Cons: aspects of the project not directly related to the functional area get short-changed, weak motivation of members, needs of the client are secondary and are responded to slowly
Critical Path
- Sequence of activities that form the longest chain in terms of their time to complete - A project is made up of this sequence of activities that form a network, representing the project - The project cannot be completed any sooner than the sum of all the activity times in "this" - Any delay causes delays the project - Activities in "this" have no slack time - Provides a wide range of scheduling information useful in managing a project
Capacity
- Services cannot be stored in inventory, so "this" becomes a dominant issue - Too much generates excessive costs - Insufficient amount leads to lost customers - Seeking the assistance of marketing to influence demand - We must ask ourselves what "this" to aim for (e.g. how many bank tellers should we staff?) - Waiting line models provide a powerful mathematical tool for analyzing many common service situations; help keep "this" at high utilization, and help maintain efficiency
Specialized Plants
- Small _____ _____ rather than large vertically integrated facilities are important - Speed and quick response to changes are key - Can be constructed and operated cheaper - Streamlines management and bureaucracy align with lean philosophies
Value Stream Mapping (VSM)
- Special type of flowchart tool used to analyze where value is or isn't being added as material flows through a process; valuable for the development of lean processes - Most powerful version of process mapping - Requires a full understanding of the business, including production processes, material flows, and information flows - Two-part process: the current (as-is) state and future (to-be) state; the former shows where you are and the latter shows where you want to be - _____: philosophy that focuses on continuous improvement; identify specific short-term projects that teams work on to implement changes to the process - Instead of pushing material through, the entire process is converted into a "pull" system that is operated in response to customer demand
Project Milestones
- Specific events in the life of the project to be reached at points in time (e.g., completing the design, producing a prototype, finishing testing the prototype, approving a pilot run) - Tied to the schedule
Pure Project
- Structure for organizing a project where a self-contained team works full time on the project - When innovation and speed are priorities - Small and project-focused team where members are assigned solely to that team for the duration of the project - Pros: full authority for project manager, one boss that all members report to, short lines of communication, quick decision-making, high pride, motivation, and commitment within teams - Cons: resources are duplicated since equipment and people aren't shared across projects, ignores organizational goals and policies, members are physically and psychologically removed from HQ, weakened functional divisions, organization falls behind on new tech knowledge, no functional-area home post-project
Quality Specifications
- Support quality efforts through design quality, conformance quality, and quality at the source - Derive from decisions/actions made relative to the quality of a product's or service's design and the quality of its conformance to that design
Earned Value Management (EVM)
- Technique for measuring project progress in an objective manner; combines measurements of scope, schedule, and cost within a project - Provides a method for evaluating the relative success of a project at a point in time - Essential features include... 1. Project plan that identifies activities to be accomplished; put the WBS on a schedule to act as your plan 2. Valuation (cost) of each activity's work; create a budget (for revenue generation-focused projects, this valuation is called planned value (PV) of the activity and for cost-focused projects, it's called the budget cost of work scheduled (BCWS)) 3. Predefined "earning" or "costing rules" to quantify the accomplishment of work; measure value earned for work performed to find how much you've accomplished thus far (for revenue generation-focused projects, this valuation is called earned value (EV) of the activity and for cost-focused projects, it's called the budget cost of work performed (BCWP))
Statistical Process Control (SPC) - Variables - Attributes
- Testing a random sample of output from a process to determine whether the process is producing items within a preselected range - Concerned with monitoring quality while the product or service is being produced - Provide timely information on whether currently produced items are meeting design specifications and detect shifts in processes that signal that future products may not meet specifications - Uses _____, which are measurable characteristics (e.g., diameter, weight, volume, inches, centimeters) - Also uses _____, which are quality characteristics that are classified as either conforming or not conforming to specifications (e.g., functioning or not functioning, good or bad)
Process Capability
- The ability of a process to consistently produce a good or deliver a service with a low probability of generating defect - "Capable" means the mean and standard deviation are repeatedly operating such that the upper and lower control limits are acceptable relative to the upper and lower specification limits
Value Chain
- The concept that each step in the supply chain processes that deliver products and services to customers should create value - If an activity doesn't create value, it should be removed
Project Crashing
- The shortening of the time to complete a project - How it works... 1. Prepare a CPM-type network diagram 2. Determine the cost per unit of time to expedite each activity 3. Compute the critical path 4. Shorten the critical path at the least cost 5. Plot project, indirect, and total cost curves to find the minimum-cost schedule
Failure Mode and Effect Analysis (FMEA)
- Type of analytical tool for six sigma - Identifies, estimates, prioritizes, and evaluates the risk of possible failures at each stage of a process - Calculates a risk priority number (RPN) for each failure mode associated with events, assemblies, and parts of a process; high RPN items should be targeted for improvement first
Design of Experiments (DOE)
- Type of analytical tool for six sigma - Statistical methodology used for determining the cause-and-effect relationship between process variables (X's) and the output variable (Y) - Permits experimentation with variables simultaneously, unlike standard statistical methods
Three
- Using _____ time estimates as required to complete an activity is best when using a single time estimate is unreliable - _____ times allow us to estimate activity time and obtain a probability estimate for completion time for the entire network - The procedure is as follows: estimated activity time is calculated using a weighted average of a minimum, maximum, and most likely time estimate, compute expected completion time of the network using the procedure described above, and approximate the probability of completing the project by particular times using estimates of variability for the activities on the critical path
Building Lean Supply Chains
- Value must be defined jointly for each product family along with target cost based on the customer's perception of value - All firms along the value stream must make an adequate return on their investments - Firms must work together to eliminate waste - When cost targets are met, the firms will immediately 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
Statement of Work (SOW)
- Written description of the objectives to be achieved throughout a project; brief statement of the work to be done, acting as a proposed schedule - States what's to be achieved, what the goals are, deadlines, ect. - Usually housed in project charters, which include goals, people, budget, schedule, and risks; project charters act as contracts, stating what they originally planned to do and helping to avoid changes or unnecessary additions to the plan (which is referred to as scope creep), as well as help to summarize the plan for members who join midway through
- Activity Direct Costs - Project Indirect Costs
- _____ _____ Costs: costs associated with expediting an activity (e.g., overtime, hiring/transferring workers, buying/leasing additional or more efficient equipment) - _____ _____ Costs:: costs associated with sustaining the project (e.g., overhead, facilities, resource opportunity costs, penalty costs, lost incentive payments) For project crashing, find the project duration that minimizes the sum of these two costs (i.e., the "optimum point in a time-cost trade-off")
- Early Start Schedule - Last Start Schedule
- _____ _____ Schedule: lists all of the activities by their early start times, completing the project and all its activities ASAP; activities not on the critical path have slack time between the completion and start of each - _____ _____ Schedule: lists all of the activities by their late start times, starting activities as late as possible without delaying completion; savings are realized by postponing the purchasing of materials, the use of labor, and other costs until necessary
1. Organize Problem-Solving Groups 2. Upgrade Housekeeping 3. Upgrade Quality 4. Clarify Process Flows 5. Revise Equipment and Process Tech 6. Level Facility Loads 7. Eliminate Unnecessary Activities 8. Reorganize Physical Configuration 9. Introduce Demand-Pull Scheduling 10. Develop Supplier Networks
10 Techniques to Build Lean Services 1. Organize _____-_____ _____: extend "quality teams" into other areas of the business 2. Upgrade _____: only the necessary items should be kept in a work area; there should be a place for everything, and everything should be in a constant state of readiness 3. Upgrade _____: develop reliable process capabilities to guarantee first-time production of uniform products/services 4. Clarify _____ _____: 5. Revise _____ and _____ Tech: evaluate them for their ability to meet process requirements, process consistently within tolerance, and fit the scale and capacity of the work group 6. Level _____ _____: synchronize production with demand; leveling demand helps firms avoid making customers wait for service 7. Eliminate Unnecessary _____: value can be added for customers by reengineering to improve process consistency or reduce the time to perform tasks 8. Reorganize _____ _____: set up manufacturing cells to produce items in small lots, synchronous to demand 9. Introduce _____-_____ Scheduling: customer-driven scheduling 10. Develop _____ _____: cooperative association of suppliers and customers working over the long term for mutual benefit
- Sort - Set in Order - Shine - Standardize - Sustain
5S - _____: eliminate whatever is not needed by separating needed tools, parts, and instructions from unneeded materials - _____: organize whatever remains by neatly arranging and identifying parts and tools for ease of use - _____: clean the work area by conducting a cleanup campaign - _____: schedule regular cleaning and maintenance by conducting the first three S's daily - _____: make 5S a way of life by forming the habit of always following the first four S's
Standard Deviation (𝝈)
A measure of how much individual observations deviate from the mean (spread); often referred to as "sigma"
Projects
A product is made up of _____
- Inspection - Process Control
Approaches to Quality Management - _____: usually after the transformation or finished good; result is pass/fail, and doesn't correct deficiencies in the process or product and is expensive and error-prone; best to perform this action earlier in the production process - _____ _____: monitor the transformation process for good quality outcomes
- Latest Finish Time Rule - Latest Start Time Rule
Backward Pass - Begin with the last event and work backwards - _____ _____ _____ Rule: states that, if an activity is an immediate predecessor for just a single activity, its LF = LS of the activity that immediately follows it; also states that, if an activity is an immediate predecessor to more than one activity, its LF is the minimum of all LS values of all activities that immediately follow it (LF = Min {LSs of all immediate following activities}) - _____ _____ _____ Rule: states that the latest start time (LS) of an activity is its latest finish time (LF) minus its duration (LS = LF - Duration)
Value Streams
Consists of the value-adding and non-value-adding activities required to design, order, and provide a product from concept to launch, order to delivery, and raw materials to customers
Service-System Design Matrix - Mail Contact - Internet and Onsite Technology - Phone Contact - Face-to-Face Tight Specs - Face-to-Face Loose Specs - Face-to-Face Total Customization - Buffer Core - Permeable System - Reactive System
Framework that relates to the customer service system encounter; ranks service system based on sales opportunity, degree of customer contact, and production efficiency Bank Example - _____ contact (bank statements) - _____ and _____ technology (ATMs, mobile banking) - _____ contact (customer support line) - _____-to-_____ _____ specs (bank tellers) - _____-to-_____ _____ specs (workers that help you get loans or mortgages) - _____-to-_____ _____ _____ (private banking like brokerage and investment advice) Degrees of Customer Contact - _____ _____: physically separated from the customer - _____ _____: penetrable by the customer via phone or face-to-face contact - _____ _____: penetrable and receptive to customer requirements
Lean Production Pull System - Push Systems
In a _____ _____ _____ system... - Customers draw from finished goods, which draw from component parts, which draw from WIP, which draw from raw materials - Customer demand causes a ripple effect that travels all the way back to the vendor - Makes it so that you're only making parts for things actually being sold - Better than _____ systems, which tend to create some waste
EVM
Project Tracking without _____ _____ _____ - Simple comparison of only actual costs vs BCWS; doesn't tell the whole story (without earned value, it is inconclusive) - Without a means of quantifying how much work has been accomplished, costs are the only available information
- Corrective Action - Preventative Action
Quality-Driven Improvement - _____ Action: fix or eliminate the current issue (or non-conformance) with the product - _____ Action: perform countermeasures to prevent the issue in the future (by addressing the cause)
Upper and Lower Specification Limits
Range of values in a measure associated with a process that is considered acceptable by the designer or customer
Project 1. Product Change 2. Process Change 3. Research & Development 4. Alliance & Partnership
Series of related jobs usually directed toward some major product and requiring a significant period of time to perform; categorized into four major areas... 1. _____ _____: new core products (breakthrough), addition to product family (platform), product enhancement (derivative) 2. _____ _____: new core process (breakthrough), process upgrade (platform), new machine (derivative) 3. _____ & _____: new core tech (breakthrough), tech upgrade (platform), new software (derivative) 4. _____ & _____: outsource major activity (breakthrough), select new partner (platform), select carrier (derivative)
- Flowchart - Run Chart - Pareto Chart - Check Sheet - Cause-and-Effect - Opportunity Flow Diagram - Process Control Chart
Six Sigma Analytical Tools - _____: a diagram of the sequence of operations - _____ _____: depict trends in data over time, helping companies understand the magnitude of a problem at the "define" stage - _____ _____: break down a problem into the relative contributions of its components - _____ _____: basic forms that help standardize data collection and create diagrams - _____-_____-_____: show hypothesized relationships between potential causes and the main problem - _____ _____ _____: separates value-added from non-value-added steps in a process - _____ _____ _____: time-sequenced charts showing plotted values of a statistic, including a centerline average and one or more control limits; distinguish between assignable and natural variations, and signal when processes are out of control
DMAIC Methodology - Define - Measure - Analyze - Improve - Control
Six sigma technique that describes the cycle by which the six sigma are employed... - _____: identify customers and their priorities, a project suitable for six sigma efforts, and CTQs (critical-to-quality) characteristics that are important to customers - _____: determine how to measure the process and how it is performing, and identify the key internal processes that influence CTQs - _____: determine the most likely causes of defects and identify the key variables; find root causes, one common thread among all issues - _____: identify means to remove the causes of defects; confirm the key variables and identify their maximum acceptance ranges; eliminate defects and develop countermeasures against the root cause(s) - _____: determine how to maintain the improvements and put tools in place to ensure that the key variables remain within maximum acceptance ranges; lock in the gains
- Transportation - Inventory - Motion - Waiting (Queues) - Overprocessing - Overproduction - Defects (and Reworks)
TIMWOOD method of eliminating waste to achieve lean operations... - _____: customers don't care how frequently materials are moved - _____: customers don't care how many items are in stock; wouldn't pay more for higher inventories - _____: people, machines, ect. moving - _____: lead times; lead times that are too long could be undesirable to customers - _____: doing more non-value-adding work than needed (e.g., more packaging than needed) - _____: making more than what is needed - _____: quality
Design Quality - Performance - Features - Reliability/Durability - Serviceability - Aesthetics - Perceived Quality
The inherent value of the product in the marketplace, and is thus a strategic decision for the firm; dimensions include... - _____: primary product/service characteristics (pages per minute, time to process customer requests) - _____: added touches, secondary characteristics (multiple paper trays, automatic billing) - _____/_____: consistency of performance over time, probability of failing, useful life (avg time between failures, changes in times to process requests) - _____: ease of repair (availability of repair centers, online reports) - _____: sensory characteristics such as sound, feel, and look (control button layout, appearance of bank lobby) - _____ _____: past performance and reputation (brand name recognition, endorsements by community leaders)
Waste Reduction - Lean Suppliers - Lean Procurement - Lean Manufacturing - Lean Warehousing - Lean Logistics - Lean Customers
The optimization of the value-adding activities and the elimination of non-value-adding activities that are part of the value stream... - Lean _____: respond to changes, price low for efficiency, and have higher quality; deliver on time and use continuous improvement - Lean _____: achieved through automation and visibility; suppliers must be able to see into their customers' operations and vice versa - Lean _____: produce what customers want, in the quantity they want, when they want it, and with minimum resources - Lean _____: Eliminate non-value-added steps and waste in product storage processes (e.g., receiving materials, storing, replenishing inventory, picking inventory, packing for shipment, shipping) - Lean _____: optimized mode selection and pooling orders, combined multi-stop truckloads, optimized routing, cross docking, import/export transportation processes, and backhaul minimization - Lean _____: understand their business needs and specify meaningful requirements; value speed and flexibility expect high levels of delivery performance
- Earliest Start (ES) - Earliest Finish (EF) - Latest Start (LS) - Latest Finish (LF)
Using CPM to Determine the Critical Path - _____ _____ (_____ _____): earliest time at which an activity can start, assuming all predecessors have been completed - _____ _____ (_____ _____): earliest time at which an activity can be finished - _____ _____ (_____ _____): latest time at which an activity can start so as to not delay the completion time of the entire project - _____ _____ (_____ _____): latest time by which an activity has to be finished so as to not delay the completion time of the entire project
- Size of Samples - Number of Samples - Frequency of Samples - Control Limits
When creating a process control chart, there are four issues... - _____ of Samples: the smaller, the better (usually 4 - 5 observations per sample), so as to be taken quicker and cheaper - _____ of Samples: around 25 is recommended to analyze and set up the chart - _____ of Samples: generally decreases as you grow more confident in the process; creates a trade-off between cost of sampling and the benefit of adjusting the system - _____ _____: generally use z = 3 (3 above the mean and 3 below), so 99.7% of samples fall within them
Project; Project
_____ Questions that _____ Managers want to Know or Understand - When will the entire project be completed? - Is it on schedule, behind schedule, or ahead of schedule? - Is the money spent equal to, less than, or greater than the budget? - Are there enough resources available to finish it on time? - What are the critical activities or tasks in the project? Which are the noncritical activities? - What is the probability that the project will be completed by a specific date? - If the project must be finished in a shorter time, what is the way to accomplish this at least cost?
Projects vs Operational Work
_____ vs _____ Work Similarities - Performed by people - Constrained by limited resources - Actively managed Differences - Operations are ongoing and repetitive - Projects are temporary and unique
