Chapter 6-11

Overall equipment effectiveness

=(availability rate)*(performance rate)*(yield) availability rate = ((up time - down time)/total operations time) performance rate = (total output/potential output) yield (quality) rate = (good output/total output) goal is to maximize availability?, not utilization

Service quality

A customer long-term overall evualuation of a service provider. Impacts customer loyalty, sales, profits. More relational of a concept than customer satisfaction. Percieved through search(before purchase), experience, and credence(usefulness of advice) qualities. Measured by willingness to return/recommend and the net promotor score

Sigma level

A metric that measures the defect rate for a process in terms of the standard normal distributions with an assumed shift in the mean of 1.5 standard deviations. Measure of process capability as well. Control limit is distributed N(0,1), but real process distributed N(1,1.5). Estimate of defects per million opportunities.

Total productive maintenance (TPM)

A systematic approach to ensure uniterrupted and efficient use of equipment. Holistic approach to managing equipment maintanence. Reduces cycle time, improves efficiency, improves overall equipment effectiveness, improves quality, reduces maintanence cost. Can be done in an emergency, planned, preventative, or predictive.

5 Whys

Asking "why" 5 times to get to the root cause of a problem. however, problems often don't have just one single root cause, instead are a system of problems

Balanced scorecard

Four perspectives (financial [shareholder], customer, internal [operations], and learning/growth [employee improvement]) each with objectives, measures, targets, and initiatives that companies should approach vision and strategy from.

Six Sigma

Methodology for reducing variation in a process. Uses process mapping tools. Relies more on statistical methods than the lean methodology. Uses DMAIC 5-step process.

Facility layout

Organization of processes in a facility. should minimize the total cost of moving between work centers. related considerations: cycle time, waste, space efficiency, comm., safety, security, quality, flexibility, maintenance, waiting time, etc. focus on bottlenecks

Zero defects

Quality management philosophy stressing elimination of all defects because the cost of preventing a defect is less than the cost of correcting/loosing a defect. Error proofing is a key tool. Deming introduced the philosophy in Japanese manufacturing industries post WWII.

Strategy map

Casual map showing the relationships between elements of an organization's business system to communicate strategy to a whole organization. 4 views: financial, customer, internal, learning/growth. Shows cause and effect relationships. Could focus on a balanced scorecard or bottleneck(s)

Voice of the Customer (VOC)

Customer opinions, perceptions, needs, desires, preferences, expectations, and requirements. Use both internally and externally Used for quality functional deployment. Captured through many methods and channels both in person and remotely.

SIPOC diagram

Diagram tool to identify all relavent elements of a process with goal of improving it. Suppliers>Input>Processes> Outputs>Customers. Should always consider all 5! Can be used for/with materials, information, or people processes

Kaizen, Kaizen event

a continuous improvement. small projects usually done in less than a week for rapid process improvement. event team is usually people who work in area and a few more. results in lower costs and higher quality. try many small experiments to improve process while maintaining "buy in" from gemba workers

Business Process Reengineering (BPR) and common actions

a radical change in the way that a business operates - usually eliminating useless steps, automating, changing organizational charts, restructuring reward systems, job enlargement/enrichment, or downsizing

Dashboard

a reporting tool providing a quick summary for a business or project status - both financial and non-financial key performance metrics should be used to indicate if goals are being met (sometimes 'red/yellow/green')

Gemba

actual place where "real" work takes place. shop floor office, etc where value-adding work happens. improvement only takes place with employee engagement (shop workers)

Job enlargement

adding more tasks to a job, increasing the range of duties/responsibilities horizontally (not vertically) benefits include fewer handoffs, less coordination required, fewer queues, reduced cycle time, earlier defect detection, improved process improvement capability, more flexibility

Bottleneck

any system constraint that holds the organization back from greater achievement of its goals (or any resource that has capacity less than the demand placed on it)

PDCA cycle

approach for process/quality improvement Plan: recognize opportunity, plan change (what wrong and how to solve) Do: test change on small scale first to minimize disruptions Check: review test, analyze results, identify learning, use data (look for new problems too) Act: fully implement if test successful, go through cycle again if not

Setup cost

cost to prepare a process or start a new product. if low enough, can justify small lotsizes and just-in-time one-piece flow

Standardized work

creating/following single set of formal written work instructions for each process [created by Fredrick Taylor], should be simple and easy to understand, most effective combination of labor, materials equipment, methods. defines takt time, work sequence, etc

Takt time

customer demand rate expressed as a time and used to pace production. production rate = market rate ideally. (available production time)/(forecasted demand rate)

Lean manufacturing and pillars

customer focus on top with pillars of Just In Time, Involvement, and Jidoka (control/improvement). standardization and stability are the foundation... many many tools are incorporated in each major element

Customer satisfaction

customer's evaluation of a Specific service experience (more transactional than the long-term/relational serivce quality)

Performance quality

degree to which product design (specification) meets customer requirements. Result of cross-functional teams. Different from conformance quality (how well product meets design spec.s)

Process map and elements

diagram showing the logical flow of steps required for a task. a tool for process understanding and improvement (as-is vs should-be). also called a flowchart sometimes. triagles represent decisions, squares represent steps, arrows are flows of material/info

Division of Labor

dividing a job into small, simple, standard steps and assigning one worker to each step. it is the opposite of job enlargement. too much of this leads to bordom and lower quality

Appraisal cost

expense of measuring quality through inspecting and testing. it's better and cheaper to design quality into the product, although some small amount of inspection is needed

Design of experiements (DOE)

family of statistical tools designed to build qualitiy into products/processes so that the need for inspection is reduced. Optimize product/process designs (make robust against manufacturing variability), experimental designs identify important process factors, develop emperical process models, teach teams about process behavior through experiments series (maximize info, minimize #trials)

Failure Mode and Effects Analysis (FMEA)

formal approach to error proofing/risk management by identifying possible causes of failure and scoring them (prioritizing risks)

Cost of Quality (COQ or COPQ)

framework used to measure quality-related costs ("price of non-conformance"). 1. Quality is conformance to requirements. 2. the system for causing quality is not appraisal (inspection). 3. performance standard is zero defects. 4. measurement of qualit is the cost of quality. Four costs cheapest to expensive: 1. prevention. 2. appraisal. 3. internal failure. 4. external failure

Little's law

fundamental queueing theory principle, relates: average time in system (T) times average arrival rate (R) is the average number in system (I). I=T*R

Control chart

graphical tool used in statistical quality control to plot statistics from process samples over time and keep the system under controll. "in control" is when (only common-cause variation is present) all points are within the control limits (UCL-LCL)

Cause and Effect Diagram [casual map]

graphical tool used to identify cause and effect relationships in a system. used for root cause analysis (although often only focuses on a single cause), finding patterns "important few", developing strategy, QFD/customer requirements, mitigating risk of failure. improves processes, strategy, is a training/teaching tool, identifies a limited number of critical metrics, exposes invalid beliefs... loops/vicous cycles can occur/be found

Master production schedule (MPS)

high level plan for a few key items to determine materials plans for all end items. "top management's handle on business" because limited number of (finished goods) items. focuses on narrow part of Bill of Materials. combines production plan, firm customer orders, manegerial insight, based on forecast but is a plan to level the load that considers capacity limitations

RACI matrix

identifies roles and responsibilites for all stakeholders involved in a process. R=responsibilites, A=authority, C=consulted, I=informed. Necessary during organizational change. Helps stakeholders know their roles in new process, less wasted meetings, fewer misunderstandings, increased productivity, better ownership. Process steps down left side, job/team across top, labels in middle

ISO 9000: what specifically does it certify?

international standardization organization. Company certification that says they have quality system in place (procedures, policies, training) to consistently provide quality. Includes customer requirements, continuous improvement, management leadership, etc. Doesn't actually certify quality, only quality mgmt system

Heijunka

japanese technique to smooth over production time (load leveling, linearity, stabalizing the schedule)

(Baldrige criteria)

leadership, strategic planning, customer focus (measurement, analysis, knowledge management), workforce focus, operations focus, results

5S

lean methodology that helps organizations simplify, clean (and make more safe), and sustain a productive work environment. Sort, Set in order, Shine, Standardize, Sustain. reduces waste and improves visibility of problems, better safety, discipline, order

One-piece flow

making only one part at a time (batch size 1) before moving the part to the next step, reduced setup time is required (and not always achievable)

Acceptable quality level or limit (AQL)

maximum percentage defective that is considered satisfactory as a long term average

Capacity

maximum rate of output for a process, measured in units of of output per unit time. goal is to minimize SUM of capacity cost and waiting cost (non-linear relationship, as utilization approachs 100%, waiting time increases exponentially). the newsvendor model is used to find optimal capacity. It is the minimum of each resources's capacity

Group technology

methodology for classifying parts based on similar production processes and resources OR manufacturing cell dedicated to making a set of parts that shares similar routings?

Process capability

methodology that measures ability of process to meet quality specifications consistantly. [(Difference between tolerance (spec) limits aka UTL-LTL)/Process width(6 sigmas)] > 1.33 for acceptable process (.0063% defects)

Acceptance sampling

methods for accepting or rejecting lot based on inspecting a (limited number) of randomly selected units. plan defines a process for accepting/rejecting lot. based on number "defective" if attribute or specification measurement. number of samples can be single, double, multiple, sequential (maybe requiring more), operating characteristics curve plots % defective vs prob. of acceptance (whic is not perfect)

P-chart

monitors the proportion of units that are defective [attributes]. estimate p-bar (the long term percent defective) from a large sample while process is under control. UCL=(p-bar)+3Sqrt(p-bar*(1-p-bar)/n). LCL=(p-bar)-3Sqrt(p-bar*(1-p-bar)/n) (or 0 if negative). Sample of n units based on lots, units, or time. Proportion p=x/n and is plotted for each sample, then analyzed to determine if process under control. based on binomial distribution

Pareto's Law, Pareto chart

most systems have a vital few and a trivial many (80% of consequences are caused by 20% of causes or) Chart shows frequency count and highlights higher-priority issues

Job rotation

movement of workers between different jobs in an organization [method of cross-training], improves communication and process understanding, reduces stress, boredom, muscle fatigue, and injuries

Common cause variation

normal/natural variation in a process. hard/impossible to reduce without redesigning the process

Blocking: tools and impact

not allowing a process to produce when output storage area is full (using kanban squares or containers), limits inventory but causes loss in capacity and utilization

Learning organization and how they learn

organizationi with the ability to learn from its environment and improve over time. Learn from customers, suppliers, research labs/tech suppliers, workers (tribal knowledge) by knowledge management systems, measuring learning, service guaruntees, ESI, benchmarking, cross-training, job rotation/enlargement, co-location, root cause analysis, post-reviews

Utilization

percent of available work time that a resource is working. Ratio of average arrival rate to average aggregate service rate. Goal is to maximize productivity to spread fixed costs over more units, although also means higher inventory, waiting time, poor customer service. Utilization should not necessarily be maximized itself, rather minimize sum of waiting and capacity

Theory of Constraints (TOC)

philosophy focused on bottleneck resources to improve overall system performance. setup cost for bottleneck = opportunity cost *5 steps

Just-in-time (JIT)

philosophy/practices developed at Toyota that seeks to eliminate waste by highly engaging people in the gemba. Simple>Visual>Error Proof>Wasteless>Standard (all with respect for people) *described by house of lean

Mixed model assemble

practice of assembling multiple products in small batches in a single process. possible when low changeover time and cost. reduces inventory, improves service levels, smoothes production rate, earlier detection of problems

Multiple machine handling

practice of assigning workers to operate more than one machine at a time

buffer management

theory of constraints concept of strategically placing "extra" inventory or a time cushion in front of constrained resources to protect the system from disruption

Drum-buffer-rope

theory of constraints concept that sends signal every time the bottleneck completes one unit, giving upstrean operations authority to produce. consists of a signal, time cushion (to protect bottlececk from running out of work/starving), communication process for releasing orders to shop floor

7 wastes "muda"

things that don't add value for customer. Can be either necessary or unnecessary. "TIMWOODS": transportation, inventory, motion, waiting, overproduction, over-processing, defects, skills (unused human potential)

Cycle time

time between successive completion (or beginnings) of a work unit (target is takt time) OR[?!] time from beginning to end for a unit of work (throughput time).

Setup time

time required to prepare a machine for the next order (changeover time)

Root cause analysis (RCA): How is this different from FEMA?

tool to identify the origins of adverse events after the fact (unlike FEMA), then improve the system so the problem doesn't occur again. Output is an action plan. Uses casual maps, root cause tree, 5 whys, brainstorming, histograms

Cross-training

training workers in several different areas or fuctions outside normal job responsiblites, can include job rotation, enlargement, enrichment. increases flexibility, process improvement, HR development, worker engagement

Cellular manufacturing

use of group of workstations dedicated to processing parts, part families, or product families that require a simiilar sequence of operations. usually uses a "U" layout. has a higher value added ratio than fuctional layout. has lots of advantages over product layout, but lower utilization may not justify expense

X-bar chart

used for processes (variables). monitors mean of a process. A sample of n parts are collected from process at regular intervals. the mean of each sample is plotted on the chart and the process is evaluated to determine if under control. Evaluated after r-chart

R-chart

used for processes (variables). used with (before) x-bar chart to monitor variablility in a processs. A sample of n parts are collected from the process every so many parts or time periods. The range (max-min) of each sample is plotted on the chart. If the range is less than the specification limits, then the process is under control

Seven tools of quality

used to gather and analyze data for process improvement: histogram, pareto chart, checksheet, control chart, Ishikawa (fishbone) diagram, process map (flowchart), scatter diagram

Operations performance metrics

variables used to evaulate a process and drive improvement efforts (should be balanced with financial and operations). should have one in each category: better, faster, cheaper... examples!

Andon light

visual signal - warning light, board, signal on/near machine that calls attention to defects/equipment problems. application of jidoka principle. person responsible for fixing should be able to clearly identify

Muda

waste: any activity that doesn't add value. 8 wastes: mura (imbalance)=unevenness in operation (hurry up and wait). muri (overload)=overburdening or causing strain on equipment or operations

Attribute

zero-one (binary) properties of a product [aka acceptable or unacceptable]. usually used for batch control (acceptance sampling) using a control chart (p chart tracks % acceptable) or c-chart

Benchmarking

(aka leading practices) comparing products and processes of similar firms to evaluate and improve a firm's performance

Jidoka

(autonomation) practice of designing processes and empowering workers to shut down a process when an abnormal condition occurs. defects are avoided by constant monitoring focused on quality improvement

Toyota Production System (TPS)

(essentially lean thinking)

Total Quality Management (TQM)

1980s movement emphasizing quality throughout all areas of the organization with a focus on employee participation and customer satisfaction. Is now out of favor in North America.

DMAIC

5-step problem-solving approach used in Lean Six Sigma projects. Define (problem, scope, metrics, team, sponsor) > Measure (data and map "as-is") > Analyze (identify system of causes and develop/test hypothesis) solve "quick hits" > Improve (implement quick hits, propose later solutions) > Control (sustain gains with control plan: new roles/responsibilites, procedures, objectives). Stage gates used by black belts

Single Minute Exchange of Dies (SMED)

Lean manufacturing methodology for reducing setup time to less than a single digit(goal). For examples, less than 10 minute changeover.

Socio-technical design

Process of defining and combining tasks to create work for an individual or a group of individuals. Expanded beyond Taylor's scientific management to consider the more human/relational side and job satisfaction tools including job enlargement/enrichment/rotation, RACI matricies, visual controls

Supplier qualification and certification

Programs designed by purchasing organizations to test if supplier meets certain standards. A supplier is "qualified" if they are capable of producing part, and "certified" if meet quality standard over a specified test period. Reduces customer(purchasing company) inspection and both businesses save money.

SERVQUAL: dimensions and gaps

Service quality instrument that measures the gap between customer expectations and perceptions. 5 dimensions: tangibles, reliability, responsiveness, assurance, empathy. 5 gaps: product design (understanding), process design (standards), delivery (production), communications (perjury), service quality.

Statistical process control (SPC) and statistical quality control (SQC - more focus on outputs)

Set of tools for monioring and maintaining process performance. Uses control charts to signal variation [control limits (function of natural variability) are not the same as specification limits]. Involves variable and/or attribute inspection.

Malcolm Baldrige National Quality Award

US Gov. annual award to recognize performance excellence in American industry because competition improves by 1. helping stimulate companies by improvingi quality/productivity 2. establishing guidelines/quality criteria 3. recognizing quality improvement achievements 4. making info available about how winning companies improve quality.

Manufacturing cycle effectiveness

Value Added Ratio = (value added time)/(total throughput time). value added time is when thing "customer is willing to pay for" are being done/added, throughput time is total time in manu. system

Lean sigma

process improvement program combining six sigma and lean thinking. If cause of issue is unknown or difficult to determine, use six sigma DMAIC, otherwise use lean. Use six sigma to provide organizational structure for process improvement projects. 5 key roles: 1. Exec. leadership: for program office, align projects with corp/busi. strategy, allocate resources. select champions 2. Champions: lead program, exec. team member, id resources, remove marriors, manages project selection 3. Master Black Belts: program management, train other full time. Assist Champion 4. Black Belts: lead problem solving projects, train coaches, 4-8 week training and manager full time for 2-3 yrs. 5. Green Belt: lead green belt projects while maintaining full time job, 2-4 week training. Assist black belts 6/7. Yellow and White belt are members, rarely used Process Owner: person with direct responsibility for performance of process and team

Service blueprinting

process map for a service that includes moments of truth, line of visibility, fall points, time estimates for each step. analyze/use to create right customer experience, improve service design

Value-stream map

process mapping developed by Toyota (lean methodology). highlights waste in a system. one is made for each workstream. helps understand process and improve it. map of the process required for set of customers/markets, factories may have many...

Value stream map

process mapping in TPS. visual tool to help identify processes required for particular set of customers and highlight non-value-adding activities. as-in to should-be

Inspection

process of checking units to ensure that they are free from defects. ideal processes have none because it is non-value-adding (although some inspection usually needed). either batch control or process control, performed on attribute or variable. Types: incoming, source, successive check, before bottleneck, first article, last article

Error proofing

process of identifying the likely causes of failure (in a product or process) and preventing or mitigating the impact thereof (ex. gas cap, service check-ups)

Work simplification

process of reducing complexity of a process to have fewer stages, steps, movement, interdependencies so that it is easier to learn and undertake (important in lean thinking)

Deming's 14 points

quality improvement philosophy: 1. Create constancy of purpose (toward competative improvement) 2. adopt the new philosophy (of cooperation) and practice 3. cease dependence on inspection to achieve quality (improve process and build-in instead) 4. don't award business based on price along (minimize total long term cost) 5. continually improve every process (production, service, planning) to decrease costs 6. institute training on the job for all 7. improve leadership (recog. people's differences) and aim to help people/machines do better 8. drive out fear (build trust) 9. break down functional silos 10. no slogans because quality problems are systematic, not individual's fault 11. no quotas, instead leadership 12. ecourage pride in work (no rating/merit system) 13. institute education programs 14. take action b/c everybody contributes to transformation

Assignable cause (special cause variation)

random variation inherent in a process and effects process at all times. Can be corrected to bring process back under control without redesigning the process. caused by an identifyable source.

Pugh matrix

scoring matrix that defines the important criteria for a decision, defines the weights for each criterion, defines the alternatives, and then scores each alternative. Encourages comparison of several different concepts against a base. Creates stronger concepts and eliminates weaker concepts.

Kanban

signaling tool (card, cart, container, square on floor), that indicates need for materials or production. comes up from downstream workcenter. gives authority to work. is a pull system tool because pulls from upstream (schedule-based would be push/demand forecasting)

Net promoter score

simple loyalty metric based on customer's willingness to recommend: %promotors to %detracters [9/10 is high, 0/6 is low score for willingness to recommend]

Setup reduction methods

single minute exchange of dies (SMED), off-line setups (external setups)

Bottleneck

system constraint that holds organization back from greater achievement of goals (resource has capacity less than demand put on it)

Pull systems

system that determines how much to order and when to order, in response to customer (internal or external) demand, opposite of push (schedule/plan/forecast)

Process improvement program

systematic approach for improving organizational performance that consists of practices, tools, techniques (examples are lean and lean sigma). 5 views bottom to top: philosophy, program, project, tool, metric