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Chapter 12 Managing Production Operations

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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 control
1 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 2
2 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 3
4 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 1
2 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

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