SCM Chapter 8 - Exam 2

Inventory and set-up time reduction says what? Give example.

We must find a balance between too much and too little inventory. Ex: If you reduce PO quantities and lot sizes, you must also reduce order frequency.

What are the 5 most important points of Deming's 14 Points for Six Sigma TQM?

1. Create dependence on mass inspection 2. End the practice of awarding business on the basis of price 3. Constantly improve the production and service system 4. Drive out fear 5. Put everyone to work to accomplish the transformation

Define the 5 parts of the DMAIC Improvement Cycle.

1. Define: Identify customer service or product requirements critical to achieving customer satisfaction 2. Measure: Prepare a data-collection plan and determine what to measure for each process gap & how to measure it 3. Analyze: Perform a process analysis to identify root causes of the process variations or defects 4. Improve: Design an improvement plan and remove the causes of process variation 5. Control: Monitor the process to assure that performance levels are maintained

What are the 3 common objectives of lean and 6?

1. End to end improvement in quality, reduction in waste and variation, and use of continuous improvement 2. Focus on root cause of problem and take corrective action and use of continuous improvement 3. Process monitoring to detect process drift or errors

Define Crosby's 4 Absolutes of Quality.

1. Quality is conformance to requirements: adopt a do it right the first time attitude and never sell a faulty product to a customer 2. The system of quality is prevention: use SPC to make corrective changes when problems occur & take preventative action 3. The performance standard is 0 defects: education, training, and commitment will eliminate defects 4. The measure of quality is the price of nonconformance: cost of poor quality

What are the 7 elements of lean supply chain management?

1. cross training 2. satisfying internal customer demand 3. quickly moving products in the production system 4. communicating D forecasts and production schedules up the supply chain 5. optimizing inventory levels across the supply chain 6. delivering small quantities and more frequently 7. locate production or warehousing facilities close to key customers

Define the 4 Six Sigma Quality tools.

1. flow diagram/process map: a diagram of the steps in the process 2. check sheets: a tool for organizing and collecting data by tallying problems or other events by category 3. pareto chart: arranges categories from highest to lowest frequency of occurrence 4. cause and effect diagram: used to organize a search for the cause of the problem (fishbone or Ishikawa)

Define Ohno's 7 Wastes.

1. overproducing: unnecessary production to maintain high utilizations 2. overproduction: non-value adding manufacturing 3. waiting: excess idle machine and operator and inventory wait time 4. transportation: excess movement of materials and multiple handling 5. excessive movement: unnecessary movement of employees 6. excess inventory: storage of excess inventory 7. scrap and rework: scrap materials and rework due to poor quality

Define the 4 costs of quality.

1. prevention costs: sum of all the costs to prevent defects 2. appraisal costs: costs of the inspection and testing to ensure that the product or process is acceptable 3. internal failue costs: costs for defects incurred within the system 4. external failure costs: costs for defects that pass through the system, tangiable or intagible

What are the 4 lean green practices?

1. reduce waste 2. reduce cost of environmental management 3. lead to improved environmental performance 4. increased the possibility that firms will adopt more advanced environmental management systems

What are the 4 guiding principles of six sigma?

1. reduction in variation is an important goal, as is reducing the avg number of defects 2. the methodology is data driven and requires data validation 3. outputs are determined by inputs 4. only a critical few inputs have a significant impact on outputs

Define the 3 causes of variation.

1. special/abnormal: variation where corrective action can be taken 2. common/random: expected and natural in the processes itself and cannot be controlled 3. special/assignable: abnormal and caused by factors that can be identified and can possible be controlled

An important outcome of SPC for firms is they can do what two things?

1. take corrective actions before processes get out of control 2. visually monitor process performance

Define the 4 types of OOC variations.

1. trend: sustained upward or downward movement 2. cycles: a wave pattern 3. bias: too many observation on one side of the center line 4. too much dispersion: values are too spread out

What are the 7 major elements of lean production (different from lean SCM)?

1. waste reduction/elimination (muda) 2. supply chain relationships 3. lean layouts 4. inventory and set-up time reduction 5. small batch production scheduling 6. continuous improvement 7. workforce empowerment

What are project returns of Lean Six Sigma?

Hard/Tangible: cost-reduction, revenue growth Soft: cost avoidance, customer loyalty, productivity improvement Other: cultural change, change velocity, employee engagement

Define supply chain relationships and give 2 examples of this element in action.

Suppliers and customers work together to remove waste, reduce cost, and improve quality of customer service Ex: Locating production or warehousing facilities close to key customers Ex: Lean Thinking: delivering smaller quantities more frequently to point of use

Define small batch production scheduling. How is it achieved?

Drives down costs with reduced purchasing, EIP, and finished goods inventories that makes the firm more flexible to customer demand using Kanbans to generate demand for parts at all stages of production, creating a pull system

Define in-control and out-of-control processes.

In-control: ap points within control limits; normal variations; no action required OOC: 1+ points outside of control limits; abnormal variation; six sigma action required to determine root cause

Define continuous improvement. What is a common method of it?

It reduces process, delivery, and quality problems (like machine breakdowns, setup issues, and internal quality discrepencies). Kaizen Blitz: rapid improvement event or workshop to find big improvements quickly and get people's attention

Define kaizen, gemba, yokoten.

Kaizen: continuous small improvement projects Gemba: the place where value is created or work is done Yokoten: sharing of best practice

Define muda, kanban, & poke-yoke.

Muda: waste in all aspects of production Kanban: a pull signal for material or production (part of JIT processing) Poke-Yoke: error or mistake proofing

What are the producer and consumer risks of sampling?

Producer's Risk: a buyer rejects a shipment of good quality units because the sample quality level did not meet standards Consumer's Risk: buyer accepts a shipment of poor quality units because the sample falsely provides a positive answer

Define quality.

The ability of a product or service to consistently meet or exceed customer expectations.

Define lean production. What are the 2 key concepts of it?

an operating philosophy of waste reduction and value enhancement created by Toyota Production Systems (TPS) 1. elimination of activities that the customer will not pay for 2. pull based material flow and production

Define six sigma. When is it achieved?

designed to make significant quality improvements in value-added processes, resulting in better product quality, reduced costs, and increased customer satisfaction when defect per million opportunities (DPMO) = 3.4, the perfect quality level

Define Six Sigma supply chain management. What are the 3 elements?

enterprise and supply chain wide philosophy that emphasizes a commitment towards excellence and encompasses suppliers, employees, and customers 1. joint focus on product quality and variation elemination 2. statistical techniques for monitoring quality and early detection process issues and errors 3. continuous improvement techniques

Check sheets are usual for determining what?

frequencies of specific problems

Define ISO 9000 Standard of Switzerland. What is synonymous with?

generic management system standards that govern the quality standards of production that many companies and countries require as a condition of engagement high quality

Define lean six sigma.

hybrid of lean and six sigma process improvement approaches with several common/complimentary elements

How is waste reduction beneficial? Define waste and give some sources of it.

it reduces costs and adds value activities that the customer will not pay for or they do not add value - wait times, inventories, variability, material and people movement

What does lean process do? Six sigma quality?

lean process: process flow, waste reduction, value creation Six Sigma: product quality, defect elimination, variation reduction

Define lean layouts. Why is this beneficial? Give an example of this element in action.

move people and materials when and where they are needed It makes lines of visibility unobstructed so everyone can see whats happening and openly communicate/coordinate. Ex: Manufacturing Cells: u-shaped areas that process similar components for different products to save duplication of equipment and labor

Define the lean six sigma supply chain relationship. Why does it work?

mutual dependency benefits occurring among these partners firms work with key suppliers and customer to remove waste, reduce cost, improve quality, and improve customer service while process integration and communication lead to fewer negative chain reactions along the SC as greater levels of SS, lost time, and less productivity

Define statistical process control (SPC).

number of different techniques designed to evaluate process output from a conformance view and determine if a process is in control or out of control

The use of 6 sigma helps the supply chain become lean due to what?

the impact that improved quality has on reducing safety stock

Define acceptance sampling.

wwhen shipments are received from suppliers, samples are taken and measured against the quality acceptance standard, and the shipment is assumed to have the same quality