MGT 385: Ch. 1-3
Marketing
-Product/service availability -Lead-time estimates -status of order delivery schedules -Sales forecasts -Customer orders -Customer feedback -Promotions
Effect of Quality Management on Productivity
-Productivity = output / input -Quality impact on productivity fewer defects increase output, and quality improvement reduces inputs -Yield: a measure of productivity
Benefits of QFD
-Promotes better understanding of customer demands -Promotes better understanding of design interactions -Involves manufacturing in design process -Provides documentation of design process
Balanced Scorecard
"Examines a firm's performance in four critical areas". 1. finances- How should we look to our shareholders? 2. customers- How should we look to our customers? 3. processes- At which business processes must we excel? 4. learning and growing- How will we sustain our ability to change and improve?
Productivity
"Ratio of output to input". Output: sales made, products produced, customers served, meals delivered, or calls answered Input: labor hours, investment in equipment, material usage, or square footage
Competitiveness
"degree to which a nation can produce goods and services that meet the test of international markets". -Most common measure of competitiveness is productivity.
Measuring and Reporting Quality Costs (index numbers)
"ratios that measure quality costs against a base value". 1. labor index: ratio of quality cost to labor hours 2. cost index: ratio of quality cost to manufacturing cost 3. sales index: ratio of quality cost to sales 4. production index: ratio of quality cost to units of final product
Key performance indicators
"set of measures to help managers evaluate performance in critical areas".
Policy Deployment
"translates corporate strategy into measurable objectives". -OGSMs: Objectives, Goals, Strategy, Metrics -Hoshins: action plans generated from the policy deployment process
Value Analysis (VA)
-Eliminate unnecessary features and functions -Used by multifunctional design teams -Define essential functions of an item -Determine the value of the functions -Determine the cost of providing the functions -Compute Value/Cost ratio -Design team works to increase the ratio
Craft production
-Process of handcrafting products or services for individual customers
Control Chart Patterns (Control Chart Patterns)
-8 consecutive points on one side of the center line -8 consecutive points up or down -14 points alternating up or down -2 out of 3 consecutive points in zone A (on one side of center line) -4 out of 5 consecutive points in zone A or B (on one side of center line)
Control Charts
-A graph that monitors process quality -Control limits upper and lower bands of a control chart -Attributes chart p-chart & c-chart -Variables chart mean (x bar - chart) range (R-chart)
Six Sigma
-A process for developing and delivering virtually perfect products and services -Six Sigma is a measure of how much a process deviates from perfection -Goal: 3.4 defects per million opportunities (DPMO)
Design of Six sigma (DFSS)
-A systematic approach to designing products and processes that will achieve Six Sigma -Uses same basic approach as breakthrough strategy -Employs the strategy up front in the design and development phases -A more effective and less expensive way to achieve Six Sigma
Lean Production
-Adaptation of mass production that prizes quality and flexibility.
Aesthetics, Safety, and perceptions
-Aesthetics: how a product looks, feels, sounds, smells, or tastes -Safety: assurance that customer will not suffer injury or harm from a product; an especially important consideration for automobiles -Perceptions: subjective perceptions based on brand name, advertising, etc.
Measuring Customer Satisfaction
-An important component of any QMS -Use customer surveys to hear "Voice of the Customer" -American Customer Satisfaction Index (ACSI)
Quality Management in the Supply Chain
-Companies need support of their suppliers to satisfy their customers -Reduce the number of suppliers -Partnering: a relationship between a company and its supplier based on mutual quality standards
idea generation can come from...
-Company's own R&D department -Customer complaints or suggestions -Marketing research -Suppliers -Salespersons in the field -Factory workers -New technological developments -Competitors
Outsourcing
-Cost -Capacity -Quality -Speed -Reliability -Expertise
What Is Quality: A Final Perspective
-Customer's and producer's perspectives depend on each other -Producer's perspective: production process and COST -Customer's perspective: fitness for use and PRICE -Customer's view must dominate
Breakthrough Strategy: DMAIC
-Define: problem is defined -Measure: process measured, data collected -Analyze: data analysis to find cause of problem -Improve: develop solutions to problem -Control: ensure improvement is continued
Building a Flowchart
-Determine objectives -Define process boundaries -Define units of flow -Choose type of chart -Observe process and collect data -Map out process -Validate chart
Division of Labor
-Dividing a job into a series of small tasks each performed by a different worker.
Globalization- Why "go global?"
-Favorable Cost -Access to international markets -Response to changes in demand -Reliable sources of supply -Latest trends and technologies Increased Globalization: -Results from the internet and falling trade barriers
Process (Quality) Improvement Teams
-Focus attention on business processes rather than separate company functions -Includes members from the interrelated departments which make up a process -Important to understand the process the team is addressing -Process flowcharts are key tools
Mass production
-High volume production of a standardized product for a mass market
Strategy and Operations
-How the mission of a company is accomplished -Provides direction for achieving a mission -Unites the organization -Provides consistency in decisions -Keeps organization moving in the right direction.
Lean Six Sigma
-Integrate Six Sigma and "lean systems" (Ch 16) -Lean seeks to optimize process flows -Lean extends earlier efforts in efficiency -Lean process improvement steps 1. determine what creates value for customers 2. identify "value stream" 3. remove waste in the value stream 4. make process responsive to customer needs 5. continually repeat attempts to remove waste -Six Sigma and Lean seek process improvements Increased value to customers -They approach the goals in different, complementary ways
Process Flowcharts
-Look at manufacture of product or delivery of service from broad perspective -Incorporate 1. nonproductive activities (inspection, transportation, delay, storage) 2. productive activities (operations)
capacity
-Maximum capability to produce -Capacity planning establishes overall level of productive resources for a firm -3 basic strategies for timing of capacity expansion in relation to steady growth in demand (lead, lag, and average)
Objectives of Facility Layout
-Minimize material-handling costs -Utilize space efficiently -Utilize labor efficiently -Eliminate bottlenecks -Facilitate communication and interaction -Reduce manufacturing cycle time -Reduce customer service time -Eliminate wasted or redundant movement -Facilitate entry, exit, and placement of material, products, and people -Incorporate safety and security measures -Promote product and service quality -Encourage proper maintenance activities -Provide a visual control of activities -Provide flexibility to adapt to changing conditions -Increase capacity
SPC Applied to Services
-Nature of defects is different in services -Service defect is a failure to meet customer requirements -Monitor time and customer satisfaction
The Operations Function
-Operations -Marketing -Finance and Accounting -Human Resources -Suppliers
Suppliers
-Orders for materials -Production and delivery schedules -Quality requirements -Design/performance specs -Material availability -Quality data -Delivery schedules -Designs
Human Resources
-Personnel needs -Skill sets -Performance evaluations -Job design -Work measurement -Hiring/firing -Training -Legal requirements -Union contract negotiations
Quality Attributes in Services
-Principles of TQM apply equally well to services and manufacturing -Timeliness is an important dimension (how quickly a service is provided) -Benchmark ("best" level of quality achievement in one company that other companies seek to achieve)
Using x- bar and R-Charts Together
-Process average and process variability must be in control -Samples can have very narrow ranges, but sample averages might be beyond control limits -Or, sample averages may be in control, but ranges might be out of control -An R-chart might show a distinct downward trend, suggesting some nonrandom cause is reducing variation
Taguchi's Quality Loss Function
-Quantifies customer preferences toward quality -Emphasizes that customer preferences are strongly oriented toward consistently -Design for Six Sigma (DFSS)
Control Charts for Variables
-Range chart ( R-Chart ) (Plot sample range (variability)) -Mean chart ( x -Chart ) (Plot sample averages)
Principles for Redesigning Processes
-Remove waste, simplify, and consolidate similar activities -Link processes to create value -Let the swiftest and most capable enterprise execute the process -Flex process for any time, any place, any way -Capture information digitally at the source and propagate it through process -Provide visibility through fresher and richer information about process status -Fit process with sensors and feedback loops that can prompt action -Add analytic capabilities to the process -Connect, collect, and create knowledge around process through all who touch it -Personalize process with preferences and habits of participants
Quality in Services
-Service defects are not always easy to measure because service output is not usually a tangible item - Services tend to be labor intensive - Services and manufacturing companies have similar inputs but different processes and outputs
Interchangeable Parts
-Standardization of parts initially as replacement parts; enabled mass production.
Statistical Process Control (SPC)
-Statistical Process Control: monitoring production process to detect and prevent poor quality -Sample: subset of items produced to use for inspection -Control Charts: process is within statistical control limits
Scientific management
-Systematic analysis of work methods
Focus of Quality Management— Customers
-TQM and QMSs (serve to achieve customer satisfaction) -Satisfied customers are less likely to switch to a competitor -It costs 5-6 times more to attract new customers as to keep an existing one -94-96% of dissatisfied customers don't complain -Small increases in customer retention mean large increases in profits
Profitability
-The typical criterion for selecting Six Sigma projects -One of the factors distinguishing Six Sigma from TQM -"Quality is not only free, it is an honest-to-everything profit maker" -Quality improvements reduce costs of poor quality
Fixed-Position Layouts
-Typical of projects -Fragile, bulky, heavy items -Equipment, workers & materials brought to site -Low equipment utilization -Highly skilled labor -Typically low fixed cost -Often high variable costs
Transformation Process
-a series of activities along a value chain extending from supplier to customer -activities that do not add value are superfluous and should be eliminated
Product Design
-defines appearance of product -sets standards for performance -specifies which materials are to be used -determines dimensions and tolerances
Quality-Cost Relationship
-difference between price of nonconformance and conformance -cost of doing things wrong (20 to 35% of revenues) -cost of doing things right (3 to 4% of revenues)
Finance/Accounting
-production and inventory data -capital budgeting requests -capacity expansion and technology plans -budgets -cost analysis -capital investments -stockholder requirements
Quality Tools
-the seven well known tools for identifying quality problems and their causes are sometimes called the "magnificent seven". 1. Process Flow Chart 2. Cause-and-Effect Diagram 3. Check Sheet 4. Pareto Analysis 5. Histogram 6. Scatter Diagram 7. Statistical Process Control Chart
Process Selection With Break-Even Analysis
1- Study cost trade-offs based on demand volume 2- Cost -Fixed costs constant regardless of the number of units produced -Variable costs vary with the volume of units produced 3- Revenue -price at which an item is sold 4- Total revenue -price times volume sold 5- Profit -difference between total revenue and total cost
Process Analysis
1- Systematic study of all aspects of a process -make it faster -more efficient -less costly -more responsive 2- Basic tools -process flowcharts -diagrams -maps
Evolution of operations and supply chain management
1. Craft production 2. Division of Labor 3. Interchangeable Parts 4. Scientific management 5. Mass production 6. Lean Production
Deming's 14 points
1. Create constancy of purpose 2. Adopt philosophy of prevention 3. Cease mass inspection 4. Select a few suppliers based on quality 5. Constantly improve system and workers 6. Institute worker training 7. Instill leadership among supervisors 8. Eliminate fear among employees 9. Eliminate barriers between departments 10. Eliminate slogans 11. Eliminate numerical quotas 12. Enhance worker pride 13. Institute vigorous training and education programs 14. Develop a commitment from top management to implement above 13 points
Collaborative Product Design (CPD)
1. A software system for collaborative design and development among trading partners 2. With PML, manages product data, sets up project workspaces, and follows life cycle of the product 3. Accelerates product development, helps to resolve product launch issues, and improves quality of design 4. Designers can -conduct virtual review sessions -test "what if" scenarios -assign and track design issues -communicate with multiple tiers of suppliers -create, store, and manage project documents
Positing the Firm: Flexibility
1. Ability to adjust to changes in product mix, production volume, or design 2. Mass customization: the mass production of customized parts 3. National Bicycle Industrial Company -offers 11,231,862 variations -delivers within two weeks at costs only 10% above standard models
Six Sigma Process
1. Align: executives create balanced scorecard 2. Mobilize: project teams formed and empowered to act 3. Accelerate: black and green belts execute project 4. Govern: monitor and review projects -Champion: an executive responsible for project success
Elements of Waiting Line Analysis
1. Arrival rate (λ) -frequency at which customers arrive at a waiting line according to a probability distribution, usually Poisson 2. Service time (μ) -time required to serve a customer, usually described by negative exponential distribution 3. Service rate must be shorter than arrival rate (λ < μ) 4. Queue discipline -order in which customers are served 4. Infinite queue -can be of any length; length of a finite queue is limited
Computerized Layout Solutions
1. CRAFT -Computerized Relative Allocation of Facilities Technique 2. CORELAP -Computerized Relationship Layout Planning 3. PROMODEL and EXTEND -visual feedback -allow user to quickly test a variety of scenarios 4. Three-D modeling and CAD -integrated layout analysis -available in VisFactory and similar software
Hybrid Layouts
1. Cellular layouts -group dissimilar machines into work centers (called cells) that process families of parts with similar shapes or processing requirements 2. Production flow analysis (PFA) -reorders part routing matrices to identify families of parts with similar processing requirements 3. Flexible manufacturing system -automated machining and material handling systems which can produce an enormous variety of items 4. Mixed-model assembly line -processes more than one product model in one line
Manufacturing Technology
1. Computer numerically control (CNC) -Machines controlled by software to perform a range of operations with the help of automated tool changers; collects processing information and quality data 2. Flexible manufacturing system (FMS) -A collection of CNC machines connected by an automated material handling system to produce a wide variety of parts 3. Robots -Programmable manipulators that can perform repetitive tasks; more consistent than workers but less flexible 4. Conveyors -Fixed-path material handling; move items along a belt or chain; "reads" package labels and diverts them to correct destination 5. Automatic guided vehicle (AGV) -Driverless trucks that move material along a specified path; directed by wire or tape embedded in floor or by radio frequencies 6. Automated storage and retrieval system (ASRS) -An automated warehouse; items placed in a storage system and retrieved by fast-moving stacker cranes; controlled by computer 7. Process Control -Continuous monitoring of automated equipment; makes real-time decisions on ongoing operation, maintenance, and quality 8. Computer-integrated manufacturing (CIM) -Automated manufacturing systems integrated through computer technology; also called e-manufacturing
Product Technology
1. Computer-aided design (CAD) -Creates and communicates designs electronically 2. Group technology (GT) -Classifies designs into families for easy retrieval and modification 3. Computer-aided engineering (CAE) -Tests functionality of CAD designs electronically 4. Collaborative product commerce (CPC) -Facilitates electronic communication and exchange of information among designers and suppliers 5. Product data management (PDM) -Keeps track of design specs and revisions for the life of the product 6. Product life cycle management (PLM) -Integrates decisions of those involved in product development, manufacturing, sales, customer service, recycling, and disposal 7. Product configuration -Defines products "configured" by customers who have selected among various options, usually from a Web site
Advanced Single-Server Models
1. Constant service times -occur most often when automated equipment or machinery performs service 2. Finite queue lengths -occur when there is a physical limitation to length of waiting line 3. Finite calling population -number of "customers" that can arrive is limited
External Failure Costs
1. Customer complaint costs -costs of investigating and satisfactorily responding to a customer complaint resulting from a poor-quality product 2. Product return costs -costs of handling and replacing poor-quality products returned by customer 3. Warranty claims costs -costs of complying with product warranties 4. Product liability costs -litigation costs resulting from product liability and customer injury 5. Lost sales costs -costs incurred because customers are dissatisfied with poor-quality products and do not make additional purchases
Strategy Formulation
1. Defining a primary task -What is the firm in the business of doing? 2. Assessing core competencies -What does the firm do better than anyone else? 3. Determining order winners and order qualifiers -What qualifies an item to be considered for purchase? -What wins the order? 4. Positioning the firm -How will the firm compete? 5. Deploying the strategy
Line Balancing Procedure
1. Draw and label a precedence diagram 2. Calculate desired cycle time required for line 3. Calculate theoretical minimum number of workstations 4. Group elements into workstations, recognizing cycle time and precedence constraints 5. Calculate efficiency of line 6. Determine if theoretical minimum number of workstations or an acceptable efficiency level has been reached. If not, go back to step 4.
Positioning the Firm: Speed
1. Fast moves, fast adaptations, tight linkages 2. Internet -Customers expect immediate responses 3. Service organizations -Always competed on sped (McDonalds, Lens Crafters, and Federal Express) 4. Manufacturers -Time bases competition: build to order production and efficient supply chains 5. Fashion Industry -Two week design to rack lead time of Spanish retailer, Zara
What Is Quality: Customer's Perspective
1. Fitness for use -how well product or service does what it is supposed to 2. Quality of design -designing quality characteristics into a product or service Ex: A Mercedes and a Ford are equally "fit for use," but with different design dimensions.
Green Areas
1. Green Sourcing -use less material -use recycled if possible 2. Green Manufacture -is energy from renewable sources -amount of waste produced 3. Green Consumption -product's use of energy -is product recyclable and maintainable 4. Recycling and Re-Use -design products to be recycled or re-used -save energy and money
Cellular Layouts
1. Identify families of parts with similar flow paths 2. Group machines into cells based on part families 3. Arrange cells so material movement is minimized 4. Locate large shared machines at point of use
Appraisal Costs
1. Inspection and testing -costs of testing and inspecting materials, parts, and product at various stages and at end of process 2. Test equipment costs -costs of maintaining equipment used in testing quality characteristics of products 3. Operator costs -costs of time spent by operators to gather data for testing product quality, to make equipment adjustments to maintain quality, and to stop work to assess quality
Costs of poor quality
1. Internal failure costs -include scrap, rework, process failure, downtime, and price reductions 2. External failure costs -include complaints, returns, warranty claims, liability, and lost sales
Service Design Process
1. Service concept -purpose of a service; it defines target market and customer experience 2. Service package -mixture of physical items, sensual benefits, and psychological benefits 3. Service specifications -performance specifications -design specifications -delivery specifications
Feasibility Study
1. Market analysis 2. Economic analysis 3. Technical/strategic analyses 4. Performance specifications
Positioning the Firm: Quality
1. Minimizing defect rates or conforming to design specifications 2. Ritz-Carlton - one customer at a time -Service system designed to "move heaven and earth" to satisfy customer -Employees empowered to satisfy a guest's wish -Teams set objectives and devise quality action plans -Each hotel has a quality leader
Designing Service Layouts
1. Must be both attractive and functional 2. Free flow layouts -encourage browsing, increase impulse purchasing, are flexible and visually appealing 3. Grid layouts -encourage customer familiarity, are low cost, easy to clean and secure, and good for repeat customers 4. Loop and Spine layouts -both increase customer sightlines and exposure to products, while encouraging customer to circulate through the entire store
Designing Product Layouts
1. Objective -Balance the assembly line 2. Line balancing -tries to equalize the amount of work at each workstation 3. Precedence requirements -physical restrictions on the order in which operations are performed 4. Cycle time -maximum amount of time a product is allowed to spend at each workstation
Elements of Waiting Line Analysis
1. Operating characteristics -average values for characteristics that describe performance of waiting line system 2. Queue -a single waiting line 3. Waiting line system -consists of arrivals, servers, and waiting line structure 4. Calling population -source of customers; infinite or finite
Role of Employees in Quality Improvement
1. Participative problem solving -employees involved in quality-management -every employee has undergone extensive training to provide quality service to Disney's guests 2. Kaizen -involves everyone in process of continuous improvement -employees determining solutions to their own problems
idea generation (help companies learn from their competitors)
1. Perceptual Maps -visual comparison of customer perceptions 2. Benchmarking -comparing product/process against best-in-class 3. Reverse engineering -dismantling competitor's product to improve your own product
performance, features, and reliability
1. Performance: basic operating characteristics of a product; how well a car handles or its gas mileage 2. Features : "extra" items added to basic features, such as a stereo CD or a leather interior in a car 3. Reliability: probability that a product will operate properly within an expected time frame; that is, a TV will work without repair for about seven years
Deming Wheel: PDCA Cycle
1. Plan: Study process, identify the problem, set goals, and develop the plan for improvement. 2. Do: Implement the plan on a test basis, measure improvement. 3. Study/Check: Assess the plan; is it working? Goals achieved? 4. Act: Institutionalize improvement; continue the cycle with new problems at stage 1.
Psychology of Waiting (preferential treatment and critical service providers)
1. Preferential treatment -Grocery stores: express lanes for customers with few purchases -Airlines/Car rental agencies: special cards available to frequent-users or for an additional fee -Phone retailers: route calls to more or less experienced salespeople based on customer's sales history 2. Critical service providers -services of police department, fire department, etc. -waiting is unacceptable; cost is not important
Costs of achieving good quality
1. Prevention costs c-osts incurred during product design 2. Appraisal costs -costs of measuring, testing, and analyzing
Process Planning
1. Process -Group of related tasks with specific inputs & outputs 2. Process design -tasks to be done & how they are coordinated among functions, people, & organizations 3. Process strategy -an organization's overall approach for physically producing goods and services 4. Process planning -converts designs into workable instructions for manufacture or delivery
Basic Layouts
1. Process layouts -group similar activities together according to process or function they perform 2. Product layouts -arrange activities in line according to sequence of operations for a particular product or service 3. Fixed-position layouts -are used for projects in which product cannot be moved
Mixed Model Assembly Lines
1. Produce multiple models in any order on one assembly line 2. Factors in mixed model lines -Line balancing -U-shaped lines -Flexible workforce -Model sequencing
Process Selection
1. Projects -one-of-a-kind production of a product to customer order 2. Batch production -process many different jobs at the same time in groups or batches 3. Mass production -produce large volumes of a standard product for a mass market 4. Continuous production -used for very-high volume commodity products
Six Sigma Tools
1. Quality Function Deployment (QFD) -capture the "voice of the customer" 2. Cause & Effect Matrix -identify and prioritize causes of a problem 3. Failure Modes and Affects Analysis (FMEA) -analyze potential problems before they occur 4. t-Test -test for differences between groups 5. Statistical Process Control (SPC) Chart -monitor a process over time for variations 6. Design of Experiments (DOE) -determining relationships between factors affecting inputs and outputs of a process
Prevention Costs
1. Quality planning costs -costs of developing and implementing quality management program 2. Product-design costs -costs of designing products with quality characteristics 3. Process costs -costs expended to make sure productive process conforms to quality specifications 4. Training costs -costs of developing and putting on quality training programs for employees and management 5. Information costs -costs of acquiring and maintaining data related to quality, and development and analysis of reports on quality performance
Process Variability
1. Random -inherent in a process -depends on equipment and machinery, engineering, operator, and system of measurement -natural occurrences 2. Non-Random -special causes -identifiable and correctable -include equipment out of adjustment, defective materials, changes in parts or materials, broken machinery or equipment, operator fatigue or poor work methods, or errors due to lack of training
Design for Robustness
1. Robust product -designed to withstand variations in environmental and operating conditions 2. Robust design -yields a product or service designed to withstand variations 3. Controllable factors -design parameters such as material used, dimensions, and form of processing 4. Uncontrollable factors -user's control (length of use, maintenance, settings, etc.) 5. Tolerance -allowable ranges of variation in the dimension of a part 6. Consistency -consistent errors are easier to correct than random errors -parts within tolerances may yield assemblies that are not within limits -consumers prefer product characteristics near their ideal values
Internal Failure Costs
1. Scrap costs -costs of poor-quality products that must be discarded, including labor, material, and indirect costs 2. Rework costs -costs of fixing defective products to conform to quality specifications 3. Process failure costs -costs of determining why production process is producing poor-quality products 4. Process downtime costs -costs of shutting down productive process to fix problem 5. Price-downgrading costs -costs of discounting poor-quality products—that is, selling products as "seconds"
Tools for Service Design
1. Service blueprinting -line of influence -line of interaction -line of visibility -line of support 2. Front-office/Back-office activities 3. Servicescapes -space and function -ambient conditions -signs, symbols, and artifacts 4. Quantitative techniques
Characteristics of Services
1. Services -acts, deeds, or performances 2. Goods -tangible objects 3. Facilitating services -accompany almost all purchases of goods 4. Facilitating goods -accompany almost all service purchases
Waiting Line Models
1. Single-server model -simplest, most basic waiting line structure 2. Frequent variations (all with Poisson arrival rate) -exponential service times -general (unknown) distribution of service times -constant service times -exponential service times with finite queue -exponential service times with finite calling population
Process Technology
1. Standard for exchange of product model data (STEP) -Set standards for communication among different CAD vendors; translates CAD data into requirements for automated inspection and manufacture 2. Computer-aided design and manufacture (CAD/CAM) -Electronic link between automated design (CAD) and automated manufacture (CAM) 3. Computer aided process (CAPP) -Generates process plans based on database of similar requirements 4. E-procurement -Electronic purchasing of items from e-marketplaces, auctions, or company websites
Rapid Prototyping and Concurrent Design
1. Testing and revising a preliminary design model 2. Build a prototype -form design -functional design -production design 3. Test prototype 4. Revise design 5. Retest
time and timeliness, completeness, courtesy and consistency
1. Time and timeliness -how long must a customer wait for service, and is it completed on time? -is an overnight package delivered overnight? 2. Completeness: -is everything customer asked for provided? -is a mail order from a catalogue company complete when delivered? 3. Courtesy: -how are customers treated by employees? -are catalogue phone operators nice and are their voices pleasant? 4. Consistency -is same level of service provided to each customer each time? -is your newspaper delivered on time every morning?
Quality Function Deployment (QFD)
1. Translates voice of customer into technical design requirements 2. Displays requirements in matrix diagrams -first matrix called "house of quality" -series of connected houses
Block Diagramming
1. Unit load -quantity in which material is normally moved 2. Nonadjacent load -distance farther than the next block 3. Steps -create load summary chart -calculate composite (two way) movements -develop trial layouts minimizing number of nonadjacent loads
Techniques for Generating Innovative Ideas
1. Vary the entry point to a problem -in trying to untangle fishing lines, it's best to start from the fish, not the poles 2. Draw analogies -a previous solution to an old problem might work 3. Change your perspective -think like a customer -bring in persons who have no knowledge of process 4. Try inverse brainstorming -what would increase cost -what would displease the customer 5. Chain forward as far as possible -if I solve this problem, what is the next problem 6. Use attribute brainstorming -how would this process operate if. . . -our workers were mobile and flexible -there were no monetary constraints -we had perfect knowledge
Process Strategy
1. Vertical integration -extent to which firm will produce inputs and control outputs of each stage of production process 2. Capital intensity -mix of capital (i.e., equipment, automation) and labor resources used in production process 3. Process flexibility -ease with which resources can be adjusted in response to changes in demand, technology, products or services, and resource availability 4. Customer involvement -role of customer in production process
Psychology of Waiting
1. Waiting rooms -magazines and newspapers -televisions 2. Bank of America -mirrors 3. Supermarkets -magazines -"impulse purchases" 4. Disney -costumed characters -mobile vendors -accurate wait times -special passes
Positioning the Firm: Cost
1. Waste elimination -relentlessly pursuing the removal of all waste 2. Examination of cost structure -looking at the entire cost structure for reduction potential 3. Lean production -providing low costs through disciplined operations
Design Simplification
1. original design -assembly using common fasteners 2. revised design -one-piece base and elimination of fasteners 3. final design -design for push and snap assembly
Dimensions of Quality: Manufactured Products
1. performance 2. features 3. reliability 4. conformance 5. durability 6. serviceability 7. aesthetics 8. safety 9. perceptions
Dimensions of quality: Service
1. time and timeliness 2. completeness 3. courtesy 4. consistency 5. accessibility and convenience 6. accuracy 7. responsiveness
A Process Is in Control If ...
1... no sample points outside limits 2... most points near process average 3... about equal number of points above and below centerline 4... points appear randomly distributed
Conformance, durability, and serviceability
4. Conformance: degree to which a product meets pre-established standards 5. Durability: how long product lasts before replacement; with care, L. L. Bean boots may last a lifetime 6. Serviceability: ease of getting repairs, speed of repairs, courtesy and competence of repair person
accessibility and convenience, accuracy, and responsiveness
5. Accessibility and convenience -how easy is it to obtain service? -does service representative answer you calls quickly? 6. Accuracy -is service performed right every time? -is your bank or credit card statement correct every month? 7. Responsiveness -how well does company react to unusual situations? -how well is a telephone operator able to respond to a customer's questions?
Expert systems (ES)
A computer system that uses the knowledge of experts to diagnose or solve a problem
Operations
A function or system that transforms inputs into outputs of greater value.
Extensible markup language (XML)
A markup language that facilitates computer-to-computer communication over the Internet by tagging data before its is sent
Value Chain
A series of activities from supplier to customer that add value to a product or service.
Cellular Layouts adv. and disadv.
Advantages: -Reduced material handling and transit time -Reduced setup time -Reduced work-in- process inventory -Better use of human resources -Easier to control -Easier to automate Disadvantages: -Inadequate part families -Poorly balanced cells -Expanded training and scheduling of workers -Increased capital investment
Basic Single-Server Model
Assumptions -Poisson arrival rate -exponential service times -first-come, first-served queue discipline -infinite queue length -infinite calling population Computations λ = mean arrival rate μ = mean service rate n = number of customers in line
Sample Size Determination
Attribute charts require larger sample sizes -50 to 100 parts in a sample Variable charts require smaller samples -2 to 10 parts in a sample
Quality Measures: Attributes and Variables
Attribute: -A characteristic which is evaluated with a discrete response -good/bad; yes/no; correct/incorrect Variable measure: -A characteristic that is continuous and can be measured -Weight, length, voltage, volume
Black Belts and Green Belts
Black Belt: project leader Master Black Belt: a teacher and mentor for Black Belts Green Belts: project team members
Business to business and business to consumer
Business - to -Business (B2B) -E-transactions between businesses usually via the Internet Business - to -Consumer (B2C) -E-transactions between businesses and their customers usually via the Internet
capacity depends on, best operating level, capacity cushion
Capacity increase depends on: -volume and certainty of anticipated demand -strategic objectives -costs of expansion and operation Best operating level -% of capacity utilization that minimizes unit costs Capacity cushion -% of capacity held in reserve for unexpected occurrences
Process Capability
Compare natural variability to design variability Natural variability -What we measure with control charts -Process mean = 8.80 oz, Std dev. = 0.12 oz Tolerances -Design specifications reflecting product requirements -Net weight = 9.0 oz 0.5 oz -Tolerances are 0.5 oz -Natural variation exceeds design specifications; process is not capable of meeting specifications all the time. -Design specifications and natural variation the same; process is capable of meeting specifications most of the time -Design specifications greater than natural variation; process is capable of always conforming to specifications. -Specifications greater than natural variation, but process off center; capable but some output will not meet upper specification.
Technology in Design
Computer Aided Design (CAD)... 1. assists in creation, modification, and analysis of a design 2. computer-aided engineering (CAE) -tests and analyzes designs on computer screen 3. computer-aided manufacturing (CAD/CAM) -ultimate design-to-manufacture connection 4. product life cycle management (PLM) -managing entire lifecycle of a product 5. collaborative product design (CPD)
Flexible Manufacturing Systems (FMS)
Consists of: -programmable machine tools -automated tool changing -automated material handling system -controlled by computer network Combines flexibility with efficiency Layouts differ based on: -variety of parts the system can process -size of parts processed -average processing time required for part completion
Design for Environment and Extended Producer Responsibility
Design for environment -designing a product from material that can be recycled -design from recycled material -design for ease of repair -minimize packaging -minimize material and energy used during manufacture, consumption and disposal Extended producer responsibility -holds companies responsible for their product even after its useful life
Usability
Ease of use of a product or service -ease of learning -ease of use -ease of remembering how to use -frequency and severity of errors -user satisfaction with experience
Design Process
Effective design can provide a competitive edge... -matches product or service characteristics with customer requirements -ensures that customer requirements are met in the simplest and least costly manner -reduces time required to design a new product or service -minimizes revisions necessary to make a design workable
SPC Applied to Services (fast food restaurants, catalogue-order companies, and insurance companies)
Fast-food restaurants: -waiting time for service, customer complaints, cleanliness, food quality, order accuracy, employee courtesy Catalogue-order companies: -order accuracy, operator knowledge & courtesy, packaging, delivery time, phone order waiting time Insurance companies: -billing accuracy, timeliness of claims processing, agent availability & response time
Artificial intelligence (AI)
Field of study replicating elements of human thought and natural processes in software; includes expert systems, genetic algorithms, neural networks, and fuzzy logic
Final Design and Process Plans
Final design -detailed drawings and specifications for new product or service Process plans (workable instructions) -necessary equipment and tooling -component sourcing recommendations -job descriptions and procedures -computer programs for automated machines
Technology Decisions
Financial justification of technology... 1- Purchase cost -Includes add-ons to make technology work 2- Operating Costs -Visualize how the technology will be used 3- Annual Savings -Better quality and efficiency save money 4- Revenue Enhancement -New technology can enhance revenue 5. Replacement Analysis -When to upgrade to new technology depends on competitive environment 6. Risk and Uncertainty -It is risky to invest and risky to 7. Piecemeal Analysis -Make sure new and existing technology are compatible
Form and Functional Design
Form Design -how product will look? Functional Design -how product will perform? (reliability, maintainability, usability)
Designing Process Layouts
Goal: minimize material handling costs Block Diagramming: -minimize nonadjacent loads -use when quantitative data is available Relationship Diagramming: -based on location preference between areas -use when quantitative data is not available
SPC Applied to Services (hospitals, grocery stores, and airlines)
Hospitals: -timeliness & quickness of care, staff responses to requests, accuracy of lab tests, cleanliness, courtesy, accuracy of paperwork, speed of admittance & checkouts Grocery stores: -waiting time to check out, frequency of out-of-stock items, quality of food items, cleanliness, customer complaints, checkout register errors Airlines: -flight delays, lost luggage & luggage handling, waiting time at ticket counters & check-in, agent & flight attendant courtesy, accurate flight information, cabin cleanliness & maintenance
Strategy
How the mission of a company is accomplished (provides direction for achieving a mission).
Production Design
How the product will be made... 1. Simplification -reducing number of parts, assemblies, or options in a product 2. Standardization -using commonly available and interchangeable parts 3. Modular Design -combining standardized building blocks, or modules, to create unique finished products 4. Design for Manufacture (DFM) -Designing a product so that it can be produced easily and economically
Decision support systems (DSS)
Information system to help managers make decisions; includes quantitative modeling components and interactive components for what-if analysis
internet and bar codes
Internet -A global information system of computer networks that facilitates communication and data transfer Bar Codes -Series of vertical lines printed on packages that identify item and other information
intranet and extranet
Intranet -Communication networks internal to an organization; can also be password (i.e., firewall) protected sites on the Internet Extranet Intranets connected to the Internet for shared access with select suppliers, customers, and trading partners
Positioning the Firm
Involves making choices- choosing one or two important things on which to concentrate and doing them extremely well (how the firm chooses to compete). -Cost -Speed -Quality -Flexibility
Where to Use Control Charts
Process: -Has a tendency to go out of control -Is particularly harmful and costly if it goes out of control Examples: -At beginning of process because of waste to begin production process with bad supplies -Before a costly or irreversible point, after which product is difficult to rework or correct -Before and after assembly or painting operations that might cover defects -Before the outgoing final product or service is delivere:
What Is Quality: Producer's Perspective
Quality of conformance "making sure product or service is produced according to design". -if new tires do not conform to specifications, they wobble -if a hotel room is not clean when a guest checks in, hotel is not functioning according to specifications of its design
Radio frequency identification tags and electronic data interchange
Radio Frequency Identification tags (RFID) -Integrated circuit embedded in a tag; can send and receive information; a "twenty-first century bar code" with read/write capabilities Electronic data interchange (EDI) -Computer-to-computer exchange of business documents over a proprietary network; very expensive and inflexible
Primary Task
Represents the purpose of a firm- what the firm is in the business of doing.
Design Quality Review
Review designs to prevent failures and ensure value... 1. Failure mode and effects analysis (FMEA) -a systematic method of analyzing product failures 2. Fault tree analysis (FTA) -a visual method for analyzing interrelationships among failures 3. Value analysis (VA) -helps eliminate unnecessary features and functions
Control Chart Patterns
Run -sequence of sample values that display same characteristic Pattern test -determines if observations within limits of a control chart display a nonrandom pattern
SPC in Quality Management
SPC uses: -Is the process in control? -Identify problems in order to make improvements -Contribute to the TQM goal of continuous improvement
Characteristics of Services
Services are intangible Service output is variable Services have higher customer contact Services are perishable Service inseparable from delivery Services tend to be decentralized and dispersed Services are consumed more often than products Services can be easily emulated
Process Plans
Set of documents that detail manufacturing and service delivery specifications -assembly charts -operations sheets -quality-control check-sheets
Enterprise resource planning (ERP)
Software for managing key functions of an enterprise, including sales, marketing, finance, accounting, production, materials management & human resources
Supply chain management (SCM)
Software to manage flow of goods and information among a network of suppliers, manufacturers and distributors
Customer relationship management (CRM)
Software to manage interactions with customers; compiling and analyzing customer data
Operations Management
The design, operation, and improvement of productive systems.
Order qualifiers & order winners
order qualifiers: what qualifies an item to be considered for purchase. order winner: What wins the order.
Economies of Scale
Unit cost decreases as output volume increases.... -fixed costs can be spread over a larger number of units -production or operating costs do not increase linearly with output levels -quantity discounts are available for material purchases -operating efficiency increases as workers gain experience
Computerized Line Balancing
Use heuristics to assign tasks to workstations... -Longest operation time -Shortest operation time -Most number of following tasks -Least number of following tasks -Ranked positional weight
Quality Circles
Voluntary group of workers and supervisors from same area who address quality problems
Evolution of Quality Management: Quality Gurus
Walter Shewhart -In 1920s, developed control charts, and Introduced term "quality assurance" W. Edwards Deming -Developed courses during WW II to teach statistical quality-control techniques to engineers and executives of military suppliers -After war, began teaching statistical quality control to Japanese companies Joseph M. Juran -Followed Deming to Japan in 1954, and Focused on strategic quality planning -Quality improvement achieved by focusing on projects to solve problems and securing breakthrough solutions Armand V. Feigenbaum -In 1951, introduced concepts of total quality control and continuous quality improvement Philip Crosby -In 1979, emphasized that costs of poor quality far outweigh cost of preventing poor quality -In 1984, defined absolutes of quality management—conformance to requirements, prevention, and "zero defects" Kaoru Ishikawa -Promoted use of quality circles, Developed "fishbone" diagram, and Emphasized importance of internal customer
Core competencies
What the firm does better than anyone else
Control Charts for Attributes
p-chart -uses portion defective in a sample c-chart -uses number of defects (non-conformities) in a sample
sequential design vs. concurrent design
sequential: walls between functional areas concurrent: walls broken down
Quality Management System (QMS)
system to achieve customer satisfaction that complements other company systems
Total Quality Management (TQM)
customer-oriented, leadership, strategic planning, employee responsibility, continuous improvement, cooperation, statistical methods, and training and education
Service Improvement Analysis
waiting time (8 min.) is too long hire assistant for cashier? increased service rate hire another cashier? reduced arrival rate Is improved service worth the cost?