1. Chapter 12 Managing Production Operations

2. Advanced Organizer Managing Engineering and Technology Decision Making
Planning
Organizing
Leading
Controlling
Management Functions
Research
Design
Production
Quality
Marketing
Project Management
Managing Technology
Time Management
Ethics
Career
Personal Technology
Managing Engineering and Technology

3. Chapter Objectives
Explain and be able to use the statistics of quality
Describe the quality revolution
Recognize the methods of work measurement

4. What Is Quality?
“The degree of excellence of a thing” (Webster’s Dictionary)
“The totality of features and characteristics that satisfy needs” ( ASQC)
Fitness for use

5. Definitions of Quality
Fitness for use, or customer satisfaction
Quality of design
Quality of conformance ( or Quality of production)

6. The Meaning of Quality The Meaning of Quality Producer’s Perspective
Consumer’s
Perspective
Quality of Conformance •
Conformance to Spec.
Cost
Quality of Design •
Quality Char.
Price
Production
Marketing
Fitness for Consumer
Use

7. Quality Of Conformance
Ensuring product or service produced according to design
Depends on
design of production process
performance of machinery
materials
training

8. Dimensions of Product Quality
1. Performance -- basic operating characteristics
2. Features --“extra” items added to basic features
3. Reliability -- probability product will operate over time
4. Conformance --meeting pre-established standards
5. Durability -- life span before replacement
6. Serviceability -- ease of getting repairs, speed & competence of repairs
7. Aesthetics -- look, feel, sound, smell or taste
8. Safety --freedom from injury or harm
9. Other perceptions--subjective perceptions based on brand name, advertising, etc

9. Service Quality
1. Time & Timeliness -- customer waiting time, completed on time
2. Completeness -- customer gets all they asked for
3. Courtesy -- treatment by employees
4. Consistency -- same level of service for all customers
5. Accessibility & Convenience -- ease of obtaining service
6. Accuracy -- performed right every time
7. Responsiveness -- reactions to unusual situations

10. The Cost of Quality Cost of Poor Quality
Cost of Achieving Good Quality
Prevention costs
Quality planning costs
Product design costs
Process costs
Training costs
Information costs
Appraisal costs
Inspection and testing
Test equipment costs
Operator costs
Cost of Poor Quality
Internal failure costs
Scrap costs
Rework costs
Process failure costs (Diagnostic)
Process downtime costs
Price-downgrading costs
External failure costs
Customer complaint costs
Product return costs
Warranty claims costs
Product liability costs
Lost sales costs

11. Quality Improvement and Quality Cost
Total Quality Cost $
Failure Cost
Appraisal Cost
Prevention Cost
Increasing Quality

12. Quality Control Approaches
Statistical process control (SPC)
Monitors production process to prevent poor quality
Acceptance sampling
Inspects random sample of product to determine if a lot is acceptable

13. Statistical Process Control
Take periodic samples from process
Plot sample points on control chart
Determine if process is within limits
Prevent quality problems

14. Variation Common Causes Special Causes Variation inherent in a process
Can be eliminated only through improvements in the system
Special Causes
Variation due to identifiable factors
Can be modified through operator or management action

15. Probability Distribution
Central tendency
Mean, Mode, Median
Dispersion
Std. deviation, Variance
Frequency function
Normal, Binomial, Poisson

16. Types Of Data Attribute data Variable data
Product characteristic evaluated with a discrete choice
Good/bad, yes/no
Variable data
Product characteristic that can be measured
Length, size, weight, height, time, velocity

17. SPC Applied To Services
Nature of defect is different in services
Service defect is a failure to meet customer requirements
Monitor times, customer satisfaction

18. Service Quality Examples
Hospitals
Timeliness, responsiveness, accuracy
Grocery Stores
Check-out time, stocking, cleanliness
Airlines
Luggage handling, waiting times, courtesy
Fast food restaurants
Waiting times, food quality, cleanliness

19. Control Charts Commonly based on   3 Sample mean: x-bar-charts
Sample range: R-charts
Sample std. deviation: s-charts
Fraction defective: p-charts
Number of defects: c-charts

20. The Normal Distribution
95%
99.73%
-3
-2
-1
=0 1 2 3

21. Z Values in Control Charts
Smaller Z values make more sensitive charts (Type I error)
Z = 3.00 is standard
Compromise between sensitivity and Type II errors

22. Process Control Chart Upper control limit Central Line Lower control1 2 3 4 5 6 7 8 9 10
Sample number

23. Interpretation of Control Charts
No evidence of out-of-control, if
No sample points outside limits
Most points near process average
About equal number of points above & below centerline
Points appear randomly distributed

24. Development of Control Charts
Based on in-control data
If non-random causes present, discard data
Correct control chart limits

25. Control Charts For Attributes
p Charts
Calculate percent defectives in sample
c Charts
Count number of defects in item

26. p-Chart

27. p-Chart Example 20 samples of 100 pairs of jeans Sample # # Defects
Proportion Defective 1 6
0.06 2
0.00 3 4
0.04 …. 20 18
0.18
200
0.10

28. p-Chart Calculations

29. Example p-Chart Sample number 0.02 0.04 0.06 0.08 0.10 0.12 0.14 0.16
0.18
0.20
Proportion defective 2 4 6 8 10 12 14 16 18 20 2 4 6 8 10 12 14 16 18 20
Sample number

30. c-Chart

31. c-Chart Example Count # of defects in 15 rolls of denim fabric
Sample #
# Defects 1 12 2 8 3 16 …. … 15
Total
190

32. c-Chart Calculations

33. Example c-Chart Sample number 3 6 9 12 15 18 21 24 Number of defects 22 4 6 8 10 12 14
Sample number

34. Control Charts for Variables
Mean chart (X-Bar Chart)
Monitors central tendency
Dispersion chart
R-Chart
s-Chart
Monitors amount of variation

35. Range (R) Chart

36. Slip-ring diameter (cm) (sample size =5)
R-Chart Example
Slip-ring diameter (cm) (sample size =5) R
Obs. 5
Obs. 4
Obs. 3
Obs. 2
Obs. 1
Sample 1
4.96
4.99
4.94
5.01
5.02
4.98
0.08 2
4.96
4.95
5.07
5.03
5.01
5.00
0.12 3
4.99
4.92
4.93
5.00
4.97
0.08 : 10
4.99
5.07
5.08
4.98
5.01
5.03
0.10 
50.09
1.15

37. 3 Control Chart Factors
Sample size -chart R-chart
n A2 D3 D4

38. R-Chart Calculations

39. Example R-Chart Range Sample 0.00 0.05 0.10 0.15 0.20 0.25 0.30 1 2 34 5 6 7 8 9 10
Sample

40. X-bar Chart Calculations

41. Example X-bar Chart Sample 4.850 4.900 4.950 5.000 5.050 5.100 X-bar 12 3 4 5 6 7 8 9 10
Sample

42. Using X-bar and R-Charts Together
Each measures process differently
Process average and variability must be in control

43. Indications of “Process out of Control”
Sample data fall outside control limits
Theory of runs
2 out of 3 beyond the warning limits
4 out of 5 beyond the 1 limits
8 consecutive on one side
Patterns

44. Zones For Pattern Tests
UCL
LCL CL
Zone A
Zone B
Zone C

45. Control Chart Patterns
8 consecutive points on one side of the center line.
8 consecutive points up or down across zones.
14 points alternating up or down.
2 out of 3 consecutive points in zone A but still inside the control limits.
4 out of 5 consecutive points in zone A or B.

46. Control Chart Patterns
LCL
UCL
UCL
LCL
Sample observations
consistently below the
center line
Sample observations
consistently above the
center line

47. Control Chart Patterns
LCL
UCL
LCL
UCL
Sample observations
consistently increasing
Sample observations
consistently decreasing

48. Inspection & Sampling 100% inspection Sampling inspection
only with automated inspection
Sampling inspection
Single sampling
Double sampling
Multiple sampling

49. Acceptance Sampling Accept/reject entire lot based on sample results
Measures quality in percent defective
Not consistent with TQM of Zero Defects
Not suitable for JIT

50. Sampling Plan Guidelines for accepting lot Single sampling plan
N = lot size
n = sample size (random)
c = acceptance number
d = number of defective items in sample
If d <= c, accept lot; else reject

51. Producer’s & Consumer’s Risk
TYPE I ERROR = Prob(reject good lot)
 or producer’s risk
5% is common
TYPE II ERROR = Prob(accept bad lot)
 or consumer’s risk
10% is typical value

52. Quality Definitions in Acceptance Sampling
Acceptance quality level (AQL)
Acceptable fraction defective in a lot
Lot tolerance percent defective (LTPD)
Maximum fraction defective accepted in a lot

53. Operating Characteristic (OC) Curve
Shows probability of lot acceptance
Based on
sampling plan
quality level of lot
Indicates discriminating power of plan

54. Operating Characteristic Curve
0.60
0.40
0.20
0.80
1.00
0.00
 = 0.05 {
Probability of
acceptance, Pa
OC curve for n and c
 = 0.10 {
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.16
0.18
0.20
Proportion defective
AQL
LTPD

55. Ideal OC Curve Probability of acceptance, Pa Proportion defective AQL
0.60
0.40
0.20
0.80
1.00
0.00
Probability of
acceptance, Pa
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.16
0.18
0.20
Proportion defective
AQL

56. Average Outgoing Quality (AOQ)
Expected number of defective items passed to customer
Average outgoing quality limit (AOQL) is the maximum point on AOQ curve

57. AOQ Curve AOQL Average Outgoing Quality (Incoming) Percent Defective
0.015
0.010
0.005
0.000
AOQL
Average
Outgoing
Quality
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.10
(Incoming) Percent Defective
AQL
LTPD

58. Double Sampling Plans Take small initial sample
If # defective < lower limit, accept
If # defective > upper limit, reject
If # defective between limits, take second sample
Accept or reject based on 2 samples
Less costly than single-sampling plans

59. Multiple (Sequential) Sampling
Uses smaller sample sizes
Take initial sample
If # defective < lower limit, accept
If # defective > upper limit, reject
If # defective between limits, resample
Continue sampling until accept or reject lot based on all sample data

60. Choosing a Sampling Plan
An economic decision
Single sampling plans
high sampling costs, low administration
Double/Multiple sampling plans
low sampling costs, high administration

61. Taguchi Methods LSL USL m LSL USL m LSL USL m LSL USL m LSL USL m LSL

62. Taguchi Methods Deviation from ideal value => “loss of society”
L = k (y – T)2
Use ANOVA to identify the sources of variation
Loss
USL
LSL T y

63. Total Quality Management
Evolution of Total Quality Management
W. Edwards Deming
Joseph M. Juran
Philip Crosby
Armand V. Feigenbaum
TQM and Continuous Process Improvement
Principles of Total Quality Management
TQM Throughout the Organization

64. Deming's 14 points
Create a constancy of purpose toward product improvement to achieve long-term organizational goals.
Adopt a philosophy of preventing poor-quality products instead of acceptable levels of poor quality as necessary to compete internationally.
Eliminate the need for inspection to achieve quality by relying instead on statistical quality control to improve product and process design.
Select a few suppliers or vendors based on quality commitment rather than competitive prices.

65. Deming's 14 points
Constantly improve the production process by focusing on the two primary sources of quality problems, the system and workers, thus increasing productivity and reducing costs.
Institute worker training that focuses on the prevention of quality problems and the use of statistical quality control techniques.
Instill leadership among supervisors to help workers perform better.
Encourage employee involvement by eliminating the fear of reprisal for asking questions or identifying quality problems.

66. Deming's 14 points
Eliminate barriers between departments, and promote cooperation and a team approach for working together.
Eliminate slogans and numerical targets that urge workers to achieve higher performance levels without first showing them how to do it.
Eliminate numerical quotas that employees attempt to meet at any cost without regard for quality.

67. Deming's 14 points
Enhance worker pride, artisanry and self-esteem by improving supervision and the production process so that workers can perform to their capabilities.
Institute vigorous education and training programs in methods of quality improvement throughout the organization, from top management down, so that continuous improvement can occur.
Develop a commitment from top management to implement the previous thirteen points.

68. Deming Wheel (PDCA Cycle)
Plan
Identify the problem & develop the plan for improvement
4. Act
Institute the improvement: continue the cycle
3. Check/Study
Assess the plan: Is it working?
2. Do
Implement the plan on a test basis

69. Total Quality Management
1. Customer defined quality
2. Top management leadership
3. Quality as a strategic issue
4. All employees responsible for quality
5. Continuous improvement
6. Shared problem solving
7. Statistical quality control
8. Training & education for all employees

70. TQM Throughout The Organization
Marketing, sales, R&D
Engineering
Purchasing
Personnel
Management
Packing, storing, shipping
Customer service 15

71. Strategic Implications Of TQM
Quality is key to effective strategy
Clear strategic goal, vision, mission
High quality goals
Operational plans & policies
Feedback mechanism
Strong leadership

72. TQM In Service Companies
Inputs similar to manufacturing
Processes & outputs are different
Services tend to be labor intensive
Quality measurement is harder
Timeliness is important measure
TQM principles apply to services

73. Quality And Productivity
= Output produced per unit of resources
= output / input
Fewer defects increase output
Quality improvement reduces inputs

74. Manufacturing Productivity
Rapid spread of manuf. capabilities => intense competition on a global scale.
Advanced manuf. Tech. => changes both products & processes
Changes in traditional management & labor practices, organizational structures, & decision making criteria.

75. Work Measurement “Fair day’s work” concept Time Standard
The amount of work that can be produced by a qualified operator working at a normal pace and effectively using his/her time when the work is not restricted by process limitations.
Time Standard
The time required for a qualified employee working at a normal pace under capable supervision experiencing normal fatigue and delay to do a defined amount of work of specified quality when following the prescribed method.

76. Uses of Time Standards Estimating costs Estimating equipment needs
Scheduling
Line Balancing
Capacity Analysis
Evaluating automation costs
Planning staffing level
Methods comparison
Pricing
Revealing production problems
Evaluating employees
Setting piece rates
Compliance with contractual requirements

77. Work Measurement Informal Time Standards
Estimates and educated guesses
Historical Data
Time of one whole cycle
Work Sampling
Observe an operation to determine frequencies of work components
Measure actual output
Determine performance standard

78. Work Measurement Engineered Time Standards Basic Time-Study Method
Define work cycle
Take time measurements
Apply rating & allowance
Methods-time Measurement (MTM)

79. Work Measurement Criticism: Direct labor only
Productivity, not quality

80. Maintenance Types of Maintenance Corrective maintenance
Preventive maintenance
Predictive maintenance
preventive maintenance that use sensitive instruments to predict trouble

81. Total Productive Maintenance (TPM)
1. Promotes the overall effectiveness and efficiency of equipment in the factory.
2. Establishes a complete preventive maintenance program for factory equipment based on life-cycle criteria.
3. ”Team" basis involving various departments to include engineering, production operations, and maintenance.
4. Involves every employee in the company, from the top management to the workers on the shop floor. Even equipment operators are responsible for maintenance of the equipment they operate.
5. Based on the promotion of preventive maintenance through "motivational management"

82. Human Resources Management
Recruiting & employment
Equal Employment Opportunity
Industrial relations
Compensation
Education & training
Employee benefits

83. Safety Engineer Identify & analyze hazards
Recommend protective devices & warning signs
Provide safety training
Interpret OSHA (Occupational Safety & Health Act) codes
Involve in workers’ compensation insurance activities

84. Purchasing Engineer Recognition of need Description of requirement
Selection of possible source of supply
Determination of price & availability
Placement of the order
Follow-up and expediting of the order
Verification of the invoice
Processing of discrepancies & rejections
Closing of completed orders
Maintenance of records & files

85. Packaging Engineering
Material & form
Specification
Machinery
Methods of unitizing secondary tertiary packaging
Delivery system

86. Materials Management Purchasing Inventory Control
Traffic & Transportation
Receiving
Warehousing
Production control