MGMT 330 Final Exam

T/F: JIT can only be used in manufacturing

False, it can also be applied to layout and services

Advantage of increasing yield in capacity management

Fewer waste

Car MPG differs from what was advertised when purchasing

Example of design capacity

GEMBA

Executives go and see how things are operating

Examples of a lumpy demand situation

Manufacturing, orders in batches/lumps

Market implications of quality management

Market share can be increased, increases in profit margin

Two conflicting goals in inventory management

Maximize customer service, minimize inventory investment

Benefit of expansionist strategy

May increase market share due to preemptive marketing

The 5 S's of JIT

Soft/segregate, simplify/straighten, shine/sweep, standardize, sustain/self-discipline

Examples of waste in JIT

Watching equipment run, waiting for parts, counting parts, overproduction, moving part over long distances, storing inventory, machine breakdown, rework

Cause-Effect Process

1. Identify effect: specific problem 2. Identify major cause categories 3. Identify specific minor causes 4. Analysis: determine causes that lead to greatest potential benefits.

Four Elements of Total Quality Management

1. Leadership 2. Involvement 3. Continuous improvement toward product/process excellence 4. Customer focus

Elements of MRP

1. Master Production Schedule 2. Bill of materials: product tree information of each product 3. Inventory status file: computerized record 4. MRP Computer program 5. Output of MRP: Primary and secondary reports

Group technology/cellular layout

A combination of process and product layout that attempts to combine benefits of both product and process layouts

ABC Analysis

A measure of importance where: A = Very important, B = Moderately Important, C = Least important

Capacity

Ability of an organization to provide the customers the good and services they demand

Product layout

Assembly layout, uses standardized processing operations to achieve smooth, rapid, high-volume flow

Material Requirement Planning (MRP)

Based on dependent demand, computer-based system that explodes the MPS into the required amount of raw materials, part, subassemblies, etc. needed in each week of planning horizon, and develops a schedule or orders for each inventory material

Jidoka JIT

Empowering employees

Objectives of facility layout

Better material movement, reduced bottlenecks, avoid machine interference, boost morale, safety, support flexibility, efficient utilization of space

Total productive maintenance (TPM) JIT

Breakdown maintenance, preventive maintenance

How to handle problems with JIT/Lean

Bring problems to the forefront and resolve them immediately

Pros of inventory

Buffer, meet anticipated demand, smooth production requirements, less stock-outs, hedge against price increase, quantity discounts

Perpetual inventory system

Can range from very simple to more complex

Capacity decisions are important because:

Capital investment, company objectives must be met, competitive edge

Factors that may affect capacity

Changed product mix, adding people to production process, increasing operating rate of machines, improving quality of raw materials and work process, increasing yield, preventive maintenance

Capacity decisions are made in light of

Competition, industry trend, consumer trend

Kaizen JIT

Continuous improvement, requires total employment involvement

Examples of material handling systems

Conveyors, cranes, elevators, motorized trucks

Organization's part in achieving quality

Cross-functional integration and teams, top management support, quality culture

Objective of MRP

Customer service, reduce inventory investments, improve plant-operating efficiencies

Basic economic order quantity model

Demand is known and is constant and uniform, shortages not allowed, lead-time is known and constant, order received all at once, no quantity discount, cost of ordering does not depend on order size

Dependent demand system, inventory management

Demand of legs or table top

Independent demand system, inventory management

Depends on external factors

JIT's mandate

Eliminate all waste, enforced problem solving

Cellular Layout JIT

Group dissimilar machines in manufacturing cell to product family of parts, work flows in one direction, cycle time adjusted by changing worker paths

Critical decisions in inventory management

How much to order, when to order, safety stock

Cost implications of quality management

If cost ranges from 10-35% of total sales, it should be no more than 2-5%

Two key changes necessary in reducing lot sizes

Improve material handling and reduce setup time

Employee considerations in achieving quality

Individual development and incentive systems

Advantage of improving the quality of raw materials and work process in capacity management

It will increase capacity because there will be fewer mistakes and less reworking with less bad components

Kanban

Japanese for "card," meaning kanbans pulls through the process

JIT Definition

Just-in-time, producing only what is need, when it is needed

The Expansionist Strategy

Large, infrequent jumps in capacity; buy capacity in large chunks and stay ahead of demand

Small-lot production JIT

Less space and capital investment, processes closer together, quality problems easier to detect, processes more dependent on each other, reduced throughput time

AnDon JIT

Like a traffic light that indicates problems with production in certain stages

MRP is suitable for:

Lumpy demand situations, relatively long lead times, and dependent demand situations

Pull production JIT

Order is triggered by the user, nothing is produced until ordered by the down-stream user, producing extras or shortages are equally undesirable

Taiichi Ohno's Seven Wastes of JIT

Overproduction, queues, transportation, inventory, motion, overprocessing, defective products

Capacity options:

Overtime, adding shifts, subcontract, expand facility, new machines, acquire other companies, locate new facility

Process layout

Similar functions are grouped together, can handle varied processing requirements

The wait-and-see strategy

Smaller, more frequent jumps in capacity; makes use of short-term capacity options such as overtime, etc. more conservative approach that minimizes risks.

Facility Layout

Physical arrangement of resources needed to produce goods and services

Periodic inventory counting system

Physical count of items made at periodic intervals and orders for all items placed at once

Bottleneck

Primary determinant of capacity, most important concept in capacity management

Fixed position layout

Product or project remains stationary, and workers, materials, and equipment are moved as needed ex. ship building, phone construction

Rate of input capacity measure

Production output rate; ex. customer served/time period

Throughput time

Production part, time it takes to create an object

Characteristic of quality management

Products: performance, durability, aesthetics, features, safety, serviceability, reliability, conformance, perception Service: Time/timeliness, courtesy, accuracy, responsiveness, completeness, consistency, accessibility/convenience

Actual output

Rate of output actually achieved--cannot exceed the effective capacity

Types of inventory

Raw materials, partially completed goods called work in progress, finished-good inventories, replacement parts, good-in-transit to warehouses or customers

JIT Layout tactics

Reduce waste due to movement

Problems with traditional push manufacturing

Reorder point (two-bin) system, safety and buffer stocks, lot sizing techniques, inflated lead times, order cancellations...all lead to excess inventory

JIT Scheduling

Schedules must be communicated inside and outside the organization

Cost associated with quality

Scrap, rework, lawsuits, prevention, lost customers, etc

Shingo Single Minute Exchange of Dies Principles

Separate internal setup from external, convert internal setup to external, streamline all aspects of setup, perform setup activities in parallel or eliminate them

Prerequisites for JIT

Stable and level production, smaller and more focused factories, smaller lot sizes

Comprehensive quality management

Strategy that provides good and services that completely satisfy both internal and external customers by meeting their implicit and explicit expectations

Bill of material

Structured list of components of a product

Material handling system

The entire network of transportation in the facility

Effective capacity

The maximum capacity given product mix, scheduling difficulties, and other doses of reality

Design capacity

The maximum obtainable output

Cons of inventory

Ties up capital, obsolescence risk, shrinkage, shelf life, carrying cost

Example of avoiding machine interference

Too much vibration from one machine effects calibration of machine in the next room

T/F: Total quality management and JIT overlap

True

Two-bin inventory system

Two containers of inventory; reorder when the first is empty

Units of input capacity measure

Typically used in services; ex. number of rooms in a motel, ford can product "x" cars/year

Point-of-sale inventory system

UPC

Quality Management

Varied responses, consumer and producer perspective