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TRANSCRIPT
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CHAPTER
6
Process Selectionand Facility Layout
McGraw-Hill/Irwin
Operations Management, Eighth Edition, by William J. StevensonCopyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
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Process selection Deciding on the way production of goods or
services will be organized
Major implications Capacity planning
Layout of facilities
Equipment
Design of work systems
Introduction
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Forecasting
Product and
Service Design
Technological
Change
Capacity
Planning
ProcessSelection
Facilities and
Equipment
Layout
Work
Design
Figure 6.1
Process Selection and System Design
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Key aspects of process strategy Capital intensive equipment/labor
Process flexibility
Adjust to changes
Design
Volume
technology
Process Strategy
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Variety How much
Flexibility What degree
Volume
Expected output Job Shop
Batch
Repetitive
Continuous
Process Selection
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Job shop Small scale
Batch
Moderate volume
Repetitive/assembly line
High volumes of standardized goods or services
Continuous Very high volumes of non-discrete goods
Process Types
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Process Type
Job Shop Appliance repairEmergency
room
Notfeasible
Batch Commercial
bakeryClassroom
Lecture
Repetitive Automotiveassembly
Automaticcarwash
Continuous(flow)
Notfeasible
Oil refineryWater purification
Figure 6.2
Product Process Matrix
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Dimension
Job variety Very High Moderate Low Very low
Processflexibility
Very High Moderate Low Very low
Unit cost Very High Moderate Low Very low
Volume ofoutput
Very High Low High Very low
Figure 6.2 (contd)
Product Process Matrix
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Automation: Machinery that has sensing andcontrol devices that enables it to operate
Fixed automation
Programmable automation
Automation
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Computer-aided design and manufacturingsystems (CAD/CAM)
Numerically controlled (NC) machines
Robot Manufacturing cell
Flexible manufacturing systems(FMS)
Computer-integrated manufacturing (CIM)
Automation
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Layout: the configuration of departments,work centers, and equipment, with
particular emphasis on movement of work
(customers or materials) through the
system
Facilities Layout
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Requires substantial investments of moneyand effort
Involves long-term commitments
Has significant impact on cost andefficiency of short-term operations
Importance of Layout Decisions
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Inefficient operations
For Example:
High Cost
Bottlenecks
Changes in the design
of products or services
The introduction of new
products or services
Accidents
Safety hazards
The Need for Layout Decisions
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Changes inenvironmental
or other legal
requirements
Changes in volume of
output or mix of
products
Changes in methods
and equipment
Morale problems
The Need for Layout Design (Contd)
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Product layouts
Process layouts
Fixed-Position layout
Combination layouts
Basic Layout Types
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Product layout Layout that uses standardized processing
operations to achieve smooth, rapid, high-volumeflow
Process layout Layout that can handle varied processing
requirements
Fixed Position layout Layout in which the product or project remains
stationary, and workers, materials, andequipment are moved as needed
Basic Layout Types
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Raw
materials
or customer
Finished
itemStation
2
Station
3
Station
4
Material
and/or
labor
Station
1
Material
and/or
labor
Material
and/or
labor
Material
and/or
labor
Used for Repetitive or Continuous Processing
Figure 6.4
Product Layout
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High rate of output Low unit cost
Labor specialization
Low material handling cost
High utilization of labor and equipment
Established routing and scheduling
Routing accounting and purchasing
Advantages of Product Layout
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Creates dull, repetitive jobs Poorly skilled workers may not maintain
equipment or quality of output
Fairly inflexible to changes in volume
Highly susceptible to shutdowns
Needs preventive maintenance
Individual incentive plans are impractical
Disadvantages of Product Layout
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1 2 3 4
5
6
78910
In
Out
Workers
Figure 6.6
A U-Shaped Production Line
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Dept. A
Dept. B Dept. D
Dept. C
Dept. F
Dept. E
Used for Intermittent processing
Job Shop or Batch
Process Layout(functional)
Figure 6.7
Process Layout
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Work
Station 1
Work
Station 2
Work
Station 3
Figure 6.7 (contd)
Product Layout(sequential)
Used for Repetitive Processing
Repetitive or Continuous
Product Layout
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Can handle a variety of processingrequirements
Not particularly vulnerable to equipment
failures Equipment used is less costly
Possible to use individual incentive plans
Advantages of Process Layouts
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In-process inventory costs can be high Challenging routing and scheduling
Equipment utilization rates are low
Material handling slow and inefficient Complexities often reduce span of supervision
Special attention for each product orcustomer
Accounting and purchasing are more involved
Disadvantages of Process Layouts
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Cellular Production Layout in which machines are grouped into a
cell that can process items that have similar
processing requirements
Group Technology
The grouping into part families of items with
similar design or manufacturing characteristics
Cellular Layouts
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Dimension Functional CellularNumber of moves
between departments
many few
Travel distances longer shorter
Travel paths variable fixed
Job waiting times greater shorter
Throughput time higher lower
Amount of work in
process
higher lower
Supervision difficulty higher lower
Scheduling complexity higher lower
Equipment utilization lower higher
Table 6.3
Functional vs. Cellular Layouts
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Warehouse and storage layouts Retail layouts
Office layouts
Other Service Layouts
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Line Balancing is the process of assigning
tasks to workstations in such a way that the
workstations have approximately
equal time requirements.
Design Product Layouts: Line Balancing
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Cycle time is the maximum time
allowed at each workstation tocomplete its set of tasks on a unit.
Cycle Time
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Output capacity =OT
CT
OT operating time per day
D = Desired output rate
CT = cycle time =OT
D
Determine Maximum Output
D i h Mi i N b
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N =(D)( t)
OT
t = sum of task times
Determine the Minimum Numberof Workstations Required
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Precedence diagram: Tool used in line balancing to displayelemental tasks and sequence requirements
A Simple Precedence
Diagrama b
c d e
0.1 min.
0.7 min.
1.0 min.
0.5 min. 0.2 min.
Figure 6.10
Precedence Diagram
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Arrange tasks shown in Figure 6.10 intothree workstations.
Use a cycle time of 1.0 minute
Assign tasks in order of the most number of
followers
Example 1: Assembly Line Balancing
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WorkstationTimeRemaining Eligible
AssignTask
RevisedTimeRemaining
StationIdle Time
1 1.0
0.9
0.2
a, c
c
none
a
c
-
0.9
0.2
0.22 1.0 b b 0.0 0.0
3 1.0
0.5
0.3
d
e
-
d
e
-
0.5
0.3 0.3
0.5
Example 1 Solution
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Percent idle time =Idle time per cycle
(N)(CT)
Efficiency = 1 Percent idle time
Calculate Percent Idle Time
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Assign tasks in order of most following
tasks.
Count the number of tasks that follow
Assign tasks in order of greatest positional
weight.
Positional weight is the sum of each tasks time
and the times of all following tasks.
Some Heuristic (intuitive) Rules:
Line Balancing Rules
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c d
a b e
f g h
0.2 0.2 0.3
0.8 0.6
1.0 0.4 0.3
Example 2
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Station 1 Station 2 Station 3 Station 4
a b e
f
d
g h
c
Solution to Example 2
ll l k
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1 min.2 min.1 min.1 min. 30/hr. 30/hr. 30/hr. 30/hr.
1 min.
1 min.
1 min.1 min.60/hr.
30/hr. 30/hr.
60/hr.
1 min.
30/hr.
30/hr.
Bottleneck
Parallel Workstations
Parallel Workstations
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Information Requirements:1. List of departments
2. Projection of work flows
3. Distance between locations4. Amount of money to be invested
5. List of special considerations
6. Location of key utilities
Designing Process Layouts
E ample 3 Interdepartmental Work Flo s
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1 3 2
30
170 100
A B C
Figure 6.12
Example 3: Interdepartmental Work Flowsfor Assigned Departments
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Authors note: The following three slides are not in the 8e,
but I like to use them for alternate examples.
P L
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Process Layout - work travelsto dedicated process centers
Milling
Assembly
& TestGrinding
Drilling Plating
Process Layout
F i l L
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Gear
cutting
Mill Drill
Lathes
Grind
Heat
treat
Assembly
111
333
222
444
222
111
444
111 3331111 2222
222
3333
111
444
111
Functional Layout
C ll l M f t i L t
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-1111 -1111
222222222 - 2222
Assemb
ly
3333333333 - 3333
44444444444444 - 4444
Lathe
Lathe
Mill
Mill
Mill
Mill
Drill
Drill
Drill
Heattreat
Heat
treat
Heat
treat
Gearcut
Gear
cut
Grind
Grind
Cellular Manufacturing Layout
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William J. Stevenson
Operations Management
8th edition
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CHAPTER
8
Location Planningand Analysis
McGraw-Hill/Irwin
Operations Management, Eighth Edition, by William J. StevensonCopyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
N d f L ti D i i
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Need for Location Decisions
Marketing Strategy Cost of Doing Business
Growth
Depletion of Resources
Nature of Location Decisions
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Nature of Location Decisions
Strategic Importance Long term commitment/costs Impact on investments, revenues, and operations Supply chains
Objectives Profit potential No single location may be better than others Identify several locations from which to choose
Options Expand existing facilities
Add new facilities Move
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Making Location Decisions
Decide on the criteria Identify the important factors
Develop location alternatives
Evaluate the alternatives
Make selection
Location Decision Factors
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Location Decision Factors
Regional Factors
Site-related
FactorsMultiple Plant
Strategies
Community
Considerations
Regional Factors
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Location of raw materials Location of markets
Labor factors
Climate and taxes
Regional Factors
Community Considerations
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Quality of life Services
Attitudes
Taxes
Environmental regulations
Utilities
Developer support
Community Considerations
Site Related Factors
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Land Transportation
Environmental
Legal
Site Related Factors
Multiple Plant Strategies
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Product plant strategy Market area plant strategy
Process plant strategy
Multiple Plant Strategies
Comparison of Service and
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Comparison of Service andManufacturing Considerations
Manufacturing/Distribution Service/Retail
Cost Focus Revenue focus
Transportation modes/costs Demographics: age,income,etc
Energy availability, costs Population/drawing area
Labor cost/availability/skills Competition
Building/leasing costs Traffic volume/patterns
Customer access/parking
Table 8.2
Trends in Locations
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Trends in Locations
Foreign producers locating in U.S.
Made in USA
Currency fluctuations
Just-in-time manufacturing techniques
Microfactories
Information Technology
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ForeignGovernment a. Policies on foreign ownership of production facilitiesLocal ContentImport restrictionsCurrency restrictionsEnvironmental regulationsLocal product standards
b. Stability issuesCulturalDifferences
Living circumstances for foreign workers / dependentsReligious holidays/traditions
CustomerPreferences
Possible buy locally sentiment
Labor Level of training and education of workersWork practicesPossible regulations limiting number of foreign employeesLanguage differences
Resources Availability and quality of raw materials, energy,transportation
Table 8.3
Evaluating Locations
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Evaluating Locations
Cost-Profit-Volume Analysis Determine fixed and variable costs
Plot total costs
Determine lowest total costs
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Location Cost-Volume Analysis
Assumptions Fixed costs are constant
Variable costs are linear
Output can be closely estimated
Only one product involved
Example 1: Cost-Volume Analysis
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Example 1: Cost-Volume Analysis
Fixed and variable costs forfour potential locations
L o c a t i o n F i x e d
C o s t
V a r i a b l e
C o s tABCD
$ 2 5 0 , 0 0 01 0 0 , 0 0 01 5 0 , 0 0 02 0 0 , 0 0 0
$ 1 13 02 03 5
Example 1: Solution
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Example 1: Solution
FixedCosts
VariableCosts
TotalCosts
ABCD
$250,000100,000150,000200,000
$11(10,000)30(10,000)20(10,000)35(10,000)
$360,000400,000350,000550,000
Example 1: Solution
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Example 1: Solution
800
700
600
500
400
300
200
100
0
Annual Output (000)
$(000)
8 10 12 14 166420
A
B
C
B Superior
C Superior
A Superior
D
Evaluating Locations
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Evaluating Locations
Transportation Model Decision based on movement costs of raw
materials or finished goods
Factor Rating
Decision based on quantitative and qualitative
inputs
Center of Gravity Method
Decision based on minimum distribution costs
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William J. Stevenson
Operations Management
8th edition
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CHAPTER
9
Managementof Quality
McGraw-Hill/IrwinOperations Management, Eighth Edition, by William J. Stevenson
Copyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
Quality Management
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Quality Management
What does the term qualitymean? Qualityis the ability of a product or service to
consistently meet or exceed customer
expectations.
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Evolution of Quality Management 1924 - Statistical process control charts
1930 - Tables for acceptance sampling
1940s - Statistical sampling techniques
1950s - Quality assurance/TQC
1960s - Zero defects
1970s - Quality assurance in services
Quality Assurance vs Strategic Approach
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Quality Assurance vs. Strategic Approach
Quality Assurance
Emphasis on finding and correcting defects
before reaching market
Strategic Approach
Proactive, focusing on preventing mistakes from
occurring
Greater emphasis on customer satisfaction
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The Quality Gurus
Walter Shewhart Father of statistical quality control
W. Edwards Deming
Joseph M. Juran Armand Feignbaum
Philip B. Crosby
Kaoru Ishikawa Genichi Taguchi
Key Contributors to Quality Management
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Key Contributors to Quality Management
ContributorDeming
Juran
Feignbaum
Crosby
Ishikawa
Taguchi
Known for14 points; special & common causes ofvariation
Quality is fitness for use; quality trilogy
Quality is a total field
Quality is free; zero defects
Cause-and effect diagrams; quality
circles
Taguchi loss function
Quality
Table 9.2
Dimensions of Quality
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Dimensions of Quality
Performance - main characteristics of theproduct/service
Aesthetics - appearance, feel, smell, taste
Special Features - extra characteristics Conformance - how well product/service
conforms to customers expectations
Reliability- consistency of performance
Dimensions of Quality (Contd)
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Dimensions of Quality (Cont d)
Durability- useful life of the product/service
Perceived Quality - indirect evaluation of
quality (e.g. reputation)
Serviceability - service after sale
Examples of Quality Dimensions
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p Q y
Dimension
1. Performance
2. Aesthetics
3. Special features
(Product)Automobile
Everything works, fit &finishRide, handling, grade of
materials usedInterior design, soft touch
Gauge/control placementCellular phone, CD
player
(Service)Auto Repair
All work done, at agreedpriceFriendliness, courtesy,
Competency, quicknessClean work/waiting area
Location, call when readyComputer diagnostics
Examples of Quality Dimensions (Contd)
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Examples of Quality Dimensions (Cont d)
Dimension
5. Reliability
6. Durability
7. Perceived
quality
8. Serviceability
(Product)Automobile
Infrequency of breakdowns
Useful life in miles, resistance
to rust & corrosion
Top-rated car
Handling ofcomplaints and/orrequests for information
(Service)Auto Repair
Work done correctly,
ready when promised
Work holds up over
time
Award-winning service
department
Handling of complaints
Service Quality
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Service Quality
Tangibles
Convenience
Reliability
Responsiveness
Time
Assurance
Courtesy
Examples of Service Quality
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Examples of Service Quality
Dimension Examples1. Tangibles Were the facilities clean, personnel neat?
2. Convenience Was the service center conveniently located?
3. Reliability Was the problem fixed?
4. Responsiveness Were customer service personnel willing and able
to answer questions?
5. Time How long did the customer wait?
6. Assurance Did the customer service personnel seemknowledgeable about the repair?
7. Courtesy Were customer service personnel and the
cashierfriendly and courteous?
Table 9.4
Determinants of Quality
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Q y
Service
Ease of
use
Conforms
to design
Design
Determinants of Quality (contd)
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Determinants of Quality (cont d)
Quality of design
Intension of designers to include or exclude
features in a product or service
Quality of conformance
The degree to which goods or services conform
to the intent of the designers
The Consequences of Poor Quality
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q y
Loss of business
Liability
Productivity
Costs
Responsibility for Quality
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Top management
Design
Procurement
Production/operations
Quality assurance
Packaging and shipping
Marketing and sales
Customer service
p y y
Costs of Quality
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y
Failure Costs - costs incurred by defectiveparts/products or faulty services.
Internal Failure Costs
Costs incurred to fix problems that are detectedbefore the product/service is delivered to thecustomer.
External Failure Costs
All costs incurred to fix problems that aredetected after the product/service is deliveredto the customer.
Costs of Quality (continued)
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y ( )
Appraisal Costs
Costs of activities designed to ensure quality oruncover defects
Prevention Costs
All TQ training, TQ planning, customerassessment, process control, and qualityimprovement costs to prevent defects fromoccurring
Ethics and Quality
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Substandard work
Defective products
Substandard service
Poor designs
Shoddy workmanship
Substandard parts and materials
y
Having knowledge of this and failing to correct
and report it in a timely manner is unethical.
Quality Awards
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Baldrige Award
Deming Prize
Malcolm Baldrige National Quality Award
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g y
1.0 Leadership(125 points)
2.0 Strategic Planning (85 points)
3.0 Customer and Market Focus (85 points)
4.0 Information and Analysis (85 points)
5.0 Human Resource Focus (85 points)
6.0 Process Management (85 points)
7.0 Business Results (450 points)
B fit f B ld i C titi
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Benefits of Baldrige Competition
Financial success
Winners share their knowledge
The process motivates employees
The process provides a well-designed qualitysystem
The process requires obtaining data
The process provides feedback
E Q lit A d
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European Quality Award
Prizes intended to identify role models
Leadership
Customer focus
Corporate social responsibility
People development and involvement
Results orientation
The Deming Prize
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Honoring W. Edwards Deming
Japans highly coveted award
Main focus on statistical quality
control
Quality Certification
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Quality Certification ISO 9000
Set of international standards on quality
management and quality assurance, critical to
international business
ISO 14000 A set of international standards for assessing a
companys environmental performance
ISO 9000 Standards
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Requirements
System requirements
Management
Resource
Realization
Remedial
ISO 9000 Quality Management
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y g
Principles A systems approach to management
Continual improvement
Factual approach to decision making
Mutually beneficial supplier relationships
Customer focus
Leadership
People involvement
Process approach
ISO 14000
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ISO 14000 - A set of international standards
for assessing a companys environmental
performance
Standards in three major areas
Management systems
Operations
Environmental systems
ISO 14000
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Management systems
Systems development and integration ofenvironmental responsibilities into businessplanning
Operations Consumption of natural resources and energy
Environmental systems
Measuring, assessing and managing emissions,effluents, and other waste
Total Quality Management
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Total Quality Management
A philosophy that involves everyone in an
organization in a continual effort to improve
quality and achieve customer satisfaction.
T Q M
The TQM Approach
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1.Find out what the customer wants
2.Design a product or service that meets or
exceeds customer wants
3.Design processes that facilitates doing the
job right the first time
4.Keep track of results
5.Extend these concepts to suppliers
Elements of TQM
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Continual improvement
Competitive benchmarking
Employee empowerment
Team approach
Decisions based on facts
Knowledge of tools
Supplier quality
Champion
Quality at the source
Suppliers
Continuous Improvement
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Philosophy that seeks to make never-ending
improvements to the process of convertinginputs into outputs.
Kaizen: Japanese
word for continuousimprovement.
Quality at the Source
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The philosophy of making
each worker responsible forthe quality of his or her work.
Six Sigma
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Statistically
Having no more than 3.4 defects per million
Conceptually
Program designed to reduce defects
Requires the use of certain tools and techniques
Six Sigma Programs
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Six Sigma programs
Improve quality
Save time
Cut costs
Employed in Design
Production
Service Inventory management
Delivery
Six Sigma Management
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Providing strong leadership
Defining performance metris
Selecting projects likely to succeed
Selecting and training appropriate people
Six Sigma Technical
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Improving process performance
Reducing variation
Utilizing statistical models
Designing a structured improvementstrategy
Six Sigma Team
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Top management
Program champions
Master black belts
Black belts Green belts
Six Sigma Process
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Define
Measure
Analyze
Improve Control
DMAIC
Obstacles to Implementing TQM
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Lack of:
Company-wide definition of quality
Strategic plan for change
Customer focus
Real employee empowerment Strong strong motivation
Time to devote to quality initiatives
Leadership
Obstacles to Implementing TQM
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Poor inter-organizational communication
View of quality as a quick fix
Emphasis on short-term financial results
Internal political and turf wars
Criticisms of TQM
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Blind pursuit of TQM programs
Programs may not be linked to strategies
Quality-related decisions may not be tied to
market performance
Failure to carefully plan a program
Basic Steps in Problem Solving
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1. Define the problem and establish an
improvement goal
2. Collect data
3. Analyze the problem
4. Generate potential solutions
5. Choose a solution
6. Implement the solution
7. Monitor the solution to see if it accomplishesthe goal
The PDSA Cycle
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Plan
Do
Study
Act
Process Improvement
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Process Improvement: A systematic
approach to improving a process
Process mapping
Analyze the process
Redesign the process
The Process Improvement Cycle
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Implement the
Improved process
Select a
process
Study/document
Seek ways to
Improve it
Design an
Improved process
Evaluate
Document
Process Improvement and Tools
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Process improvement - a systematic
approach to improving a process Process mapping
Analyze the process
Redesign the process
Tools
There are a number of tools that can be used
for problem solving and process improvement Tools aid in data collection and interpretation,
and provide the basis for decision making
Basic Quality Tools
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Flowcharts
Check sheets
Histograms
Pareto Charts
Scatter diagrams
Control charts
Cause-and-effect diagrams
Run charts
Check Sheet
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Billing Errors
Wrong Account
Wrong Amount
A/R Errors
Wrong Account
Wrong Amount
Monday
Pareto Analysis
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80% of the
problems
may be
attributed to
20% of the
causes.
Smeared
print
Numberofd
efects
Off
center
Missing
label
Loose Other
Control ChartFi 9 11
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970
980
990
1000
1010
1020
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
UCL
LCL
Figure 9.11
Cause-and-Effect DiagramFi 9 12
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Figure 9.12
Effect
MaterialsMethods
EquipmentPeople
Environment
Cause
Cause
Cause
Cause
Cause
CauseCause
Cause
CauseCause
Cause
Cause
Run Chart
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Time (Hours)
D
iameter
Tracking ImprovementsFigure 9 17
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UCL
LCL
LCLLCL
UCLUCL
Process not centered
and not stable
Process centered
and stable
Additional improvements
made to the process
Figure 9-17
Methods for Generating Ideas
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Brainstorming
Quality circles
Interviewing
Benchmarking
5W2H
Quality Circles
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Team approach
List reduction
Balance sheet
Paired comparisons
Benchmarking Process
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Identify a critical process that needs
improving
Identify an organization that excels in this
process
Contact that organization
Analyze the data
Improve the critical process
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William J. Stevenson
Operations Management
8th edition
CHAPTER
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CHAPTER
10
Quality Control
McGraw-Hill/Irwin
Operations Management, Eighth Edition, by William J. StevensonCopyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
Phases of Quality AssuranceFigure 10 1
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Acceptancesampling
Processcontrol
Continuousimprovement
Inspection
before/after
production
Inspection and
corrective
action during
production
Quality built
into the
process
The leastprogressive
The mostprogressive
Figure 10.1
InspectionFigure 10 2
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How Much/How Often
Where/When
Centralized vs. On-site
Inputs Transformation Outputs
Acceptancesampling
Processcontrol
Acceptancesampling
Figure 10.2
Inspection CostsFigure 10 3
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Cost
Optimal
Amount of Inspection
Cost of
inspection
Cost of
passing
defectives
Total Cost
Figure 10.3
Where to Inspect in the Process
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Raw materials and purchased parts
Finished products
Before a costly operation
Before an irreversible process
Before a covering process
Examples of Inspection PointsTable 10 1
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Type ofbusiness
Inspectionpoints
Characteristics
Fast Food CashierCounter areaEating area
BuildingKitchen
AccuracyAppearance, productivityCleanliness
AppearanceHealth regulations
Hotel/motel Parking lotAccounting
BuildingMain desk
Safe, well lightedAccuracy, timeliness
Appearance, safetyWaiting times
Su ermarket CashiersDeliveries
Accuracy, courtesyQuality, quantity
Table 10.1
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Statistical Process Control:
Statistical evaluation of the output of aprocess during production
Quality of Conformance:
A product or service conforms tospecifications
Control Chart
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Control Chart
Purpose: to monitor process output to see if it
is random
A time ordered plot representative sample
statistics obtained from an on going process
(e.g. sample means)
Upper and lower control limits define the
range of acceptable variation
Control ChartFigure 10.4
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0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
UCL
LCL
Sample number
Mean
Out of
control
Normal variation
due to chance
Abnormal variation
due to assignable sources
Abnormal variation
due to assignable sources
Figure 10.4
Statistical Process Control
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The essence of statistical process control is
to assure that the output of a process is
random so thatfuture outputwill be
random.
Statistical Process Control
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The Control Process
Define
Measure
Compare
Evaluate
Correct
Monitor results
Statistical Process Control
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Variations and Control
Random variation: Natural variations in the
output of a process, created by countless minor
factors
Assignable variation: A variation whose sourcecan be identified
Sampling DistributionFigure 10.5
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Samplingdistribution
Process
distribution
Mean
g
Normal DistributionFigure 10.6
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Mean
95.44%
99.74%
Standard deviation
g
Control LimitsFigure 10.7
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Sampling
distribution
Process
distribution
Mean
Lower
controllimit
Upper
controllimit
g
SPC Errors
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Type I error
Concluding a process is not in control when it
actually is.
Type II error
Concluding a process is in control when it isnot.
Type I ErrorFigure 10.8
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Mean
LCL UCL
/2 /2
Probabilityof Type I error
Observations from Sample DistributionFigure 10.9
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Sample number
UCL
LCL
1 2 3 4
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Mean and Range ChartsFigure 10.10A
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UCL
LCL
UCL
LCL
R-chart
x-Chart Detects shift
Does not
detect shift
(process mean isshifting upward)
Sampling
Distribution
Mean and Range ChartsFigure 10.10B
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x-Chart
UCL
Does not
reveal increase
UCL
LCL
LCL
R-chart Reveals increase
(process variability is increasing)Sampling
Distribution
Control Chart for Attributes
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p-Chart - Control chart used to monitor the
proportion of defectives in a process
c-Chart - Control chart used to monitor the
number of defects per unit
Attributes generate data that are counted.
Use of p-ChartsTable 10.3
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When observations can be placed into two
categories.
Good or bad
Pass or fail
Operate or dont operate
When the data consists of multiple
samples of several observations each
Use of c-ChartsTable 10.3
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Use only when the number of occurrences
per unit of measure can be counted; non-
occurrences cannot be counted.
Scratches, chips, dents, or errors per item
Cracks or faults per unit of distance
Breaks or Tears per unit of area
Bacteria or pollutants per unit of volume
Calls, complaints, failures per unit of time
Use of Control Charts
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At what point in the process to use control
charts
What size samples to take
What type of control chart to use Variables
Attributes
Run Tests
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Run test a test for randomness
Any sort of pattern in the data would
suggest a non-random process
All points are within the control limits - theprocess may not be random
Nonrandom Patterns in Control
chartsFigure 10.11
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charts Trend
Cycles
Bias
Mean shift
Too much dispersion
Counting Runs
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Counting Above/Below Median Runs (7 runs)
Counting Up/Down Runs (8 runs)
U U D U D U D U U D
B A A B A B B B A A B
Figure 10.12
Figure 10.13
Process Capability
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Tolerances or specifications
Range of acceptable values established by
engineering design or customer requirements
Process variability
Natural variability in a process
Process capability
Process variability relative to specification
Process CapabilityFigure 10.15
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Lower
SpecificationUpper
Specification
A. Process variability
matches specifications
Lower
Specification
Upper
Specification
B. Process variability
well within specificationsLower
Specification
Upper
Specification
C. Process variability
exceeds specifications
Process Capability Ratio
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Process capability ratio, Cp =specification width
process width
Upper specificationlower specification6
Cp =
3 Sigma and 6 Sigma Quality
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Process
mean
Lower
specification
Upper
specification
1350 ppm 1350 ppm
1.7 ppm 1.7 ppm
+/- 3 Sigma+/- 6 Sigma
Improving Process Capability
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Simplify
Standardize
Mistake-proof
Upgrade equipment
Automate
Taguchi Loss FunctionFigure 10.17
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Cost
TargetLowerspec
Upper
spec
Traditional
cost function
Taguchi
cost function
Limitations of Capability Indexesb bl
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1. Process may not be stable
2. Process output may not be normally
distributed
3. Process not centered but Cp is used
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William J. Stevenson
Operations Management
8th edition
CHAPTER
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11
InventoryManagement
McGraw-Hill/Irwin
Operations Management, Eighth Edition, by William J. Stevenson
Copyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
Independent DemandInventory: a stock or store of goods
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A
B(4) C(2)
D(2) E(1) D(3) F(2)
Dependent Demand
Independent demand is uncertain.
Dependent demand is certain.
y g
Types of Inventories
Raw materials & purchased parts
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Raw materials & purchased parts
Partially completed goods calledwork in progress
Finished-goods inventories
(manufacturingfirms)or merchandise(retail stores)
Types of Inventories (Contd)
R l t t t l & li
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Replacement parts, tools, & supplies
Goods-in-transit to warehouses or customers
Functions of Inventory
T t ti i t d d d
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To meet anticipated demand
To smooth production requirements
To decouple operations
To protect against stock-outs
Functions of Inventory (Contd)
T t k d t f d l
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To take advantage of order cycles
To help hedge against price increases
To permit operations
To take advantage of quantity discounts
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A system to keep track of inventory
Effective Inventory Management
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A system to keep track of inventory
A reliable forecast of demand
Knowledge of lead times
Reasonable estimates of Holding costs
Ordering costs
Shortage costs
A classification system
Inventory Counting Systems
i di
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Periodic System
Physical count of items made at periodic
intervals
Perpetual Inventory System
System that keeps trackof removals from inventory
continuously, thus
monitoring
current levels of
each item
Inventory Counting Systems (Contd)
T Bi S t T t i f
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Two-Bin System - Two containers of
inventory; reorder when the first is empty
Universal Bar Code - Bar code
printed on a label that has
information about the itemto which it is attached
0
214800 232087768
Lead time time interval between ordering
Key Inventory Terms
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Lead time: time interval between ordering
and receiving the order
Holding (carrying) costs: cost to carry an
item in inventory for a length of time,
usually a year
Ordering costs: costs of ordering and
receiving inventory
Shortage costs: costs when demandexceeds supply
ABC Classification System
Classif ing in entor according to some
Figure 11.1
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Classifying inventory according to some
measure of importance and allocating controlefforts accordingly.
A -very important
B- mod. important
C- least important Annual$ value
of items
A
B
C
High
Low
Few ManyNumber of Items
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Economic order quantity model
Economic Order Quantity Models
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Economic order quantity model
Economic production model
Quantity discount model
Only one product is involved
Assumptions of EOQ Model
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Only one product is involved
Annual demand requirements known
Demand is even throughout the year
Lead time does not vary
Each order is received in a single delivery
There are no quantity discounts
The Inventory CycleFigure 11.2
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Profile of Inventory Level Over Time
Quantity
on hand
Q
Receive
order
Place
orderReceive
orderPlace
order
Receive
order
Lead time
Reorder
point
Usage
rate
Time
Total Cost
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Annualcarryingcost
Annualorderingcost
Total cost = +
Q2H D
QSTC = +
Cost Minimization GoalFigure 11.4C
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Order Quantity (Q)
The Total-Cost Curve is U-Shaped
Ordering Costs
QO
Annu
alCost
(optimal order quantity)
TCQH
D
QS
2
Deriving the EOQ
Using calculus we take the derivative of the
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Using calculus, we take the derivative of the
total cost function and set the derivative(slope) equal to zero and solve for Q.
Q =2DS
H=
2(Annual Demand )(Order or Setup Cost )
Annual Holding CostOPT
Minimum Total Cost
The total cost curve reaches its minimum
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The total cost curve reaches its minimum
where the carrying and ordering costs areequal.
Q = 2DSH
= 2(Annual Demand )(Order or Setup Cost )Annual Holding Cost
OPT
Production done in batches or lots
Economic Production Quantity (EPQ)
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Production done in batches or lots
Capacity to produce a part exceeds the
parts usage or demand rate
Assumptions of EPQ are similar to EOQ
except orders are received incrementallyduring production
Only one item is involved
Economic Production Quantity Assumptions
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Only one item is involved
Annual demand is known
Usage rate is constant
Usage occurs continually
Production rate is constant
Lead time does not vary
No quantity discounts
Economic Run Size
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QDS
H
p
p u
0
2
Total Costs with Purchasing Cost
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Annualcarryingcost
PurchasingcostTC = +
Q2 H DQ STC = +
+Annualorderingcost
PD+
Total Costs with PD
t
Figure 11.7
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Cost
EOQ
TC with PD
TC without PD
PD
0 Quantity
Adding Purchasing costdoesnt change EOQ
Total Cost with Constant Carrying CostsFigure 11.9
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OC
EOQ Quantity
TotalCost
TCa
TCc
TCbDecreasing
Price
CC a,b,c
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Determinants of the Reorder Point The rate of demand
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The rate of demand
The lead time
Demand and/or lead time variability
Stockout risk (safety stock)
Safety StockFigure 11.12
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LT Time
Expected demand
during lead time
Maximum probable demand
during lead time
ROP
Quantity
Safety stockSafety stock reduces risk of
stockout during lead time
Reorder PointFigure 11.13
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ROP
Risk of
a stockout
Service level
Probability ofno stockout
Expected
demand Safety
stock0 z
Quantity
z-scale
The ROP based on a normal
Distribution of lead time demand
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Tight control of inventory items
Fixed-Interval Benefits
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g y
Items from same supplier may yield savingsin:
Ordering
Packing Shipping costs
May be practical when inventories cannotbe closely monitored
Requires a larger safety stock
Fixed-Interval Disadvantages
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q g y
Increases carrying cost
Costs of periodic reviews
Single period model: model for ordering of
Single Period Model
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g p g
perishables and other items with limiteduseful lives
Shortage cost: generally the unrealized
profits per unit Excess cost: difference between purchase
cost and salvage value of items left over at
the end of a period
Continuous stocking levels
Single Period Model
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g
Identifies optimal stocking levels
Optimal stocking level balances unit shortage
and excess cost
Discrete stocking levels
Service levels are discrete rather than
continuous Desired service level is equaled or exceeded
Too much inventory
Operations Strategy
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y
Tends to hide problems
Easier to live with problems than to eliminate
them
Costly to maintain Wise strategy
Reduce lot sizes
Reduce safety stock
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CHAPTER
12
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12
Aggregate Planning
McGraw-Hill/Irwin
Operations Management, Eighth Edition, by William J. StevensonCopyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
Planning Horizon
Aggregate planning: Intermediate-range
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gg g p g g
capacity planning, usually covering 2 to 12months.
Short
range
Intermediate
range
Long range
Now 2 months 1 Year
Short-range plans (Detailed plans)
Overview of Planning Levels
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Machine loading
Job assignments
Intermediate plans (General levels)
Employment
Output
Long-range plans
Long term capacity
Location / layout
Planning SequenceFigure 12.1
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Business Plan Establishes operationsand capacity strategies
Aggregate planEstablishes
operations capacity
Master schedule Establishes schedules
for specific products
Corporatestrategies
and policies
Economic,
competitive,
and political
conditions
Aggregatedemand
forecasts
Resources Costs
Aggregate Planning Inputs
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Workforce
Facilities
Demand forecast
Policies
Subcontracting
Overtime
Inventory levels
Back orders
Inventory carrying
Back orders
Hiring/firing
Overtime
Inventory changes
subcontracting
Total cost of a plan
Aggregate Planning Outputs
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Projected levels of inventory
Inventory
Output
Employment
Subcontracting
Backordering
Aggregate Planning Strategies
Proactive
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Alter demand to match capacity
Reactive
Alter capacity to match demand
Mixed
Some of each
Pricing
Demand Options
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Promotion
Back orders
New demand
Hire and layoff workers
Capacity Options
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Overtime/slack time
Part-time workers
Inventories
Subcontracting
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Basic Strategies
Level capacity strategy:
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Maintaining a steady rate of regular-timeoutput while meeting variations in demand bya combination of options.
Chase demand strategy:
Matching capacity to demand; the plannedoutput for a period is set at the expected
demand for that period.
Chase Approach
Advantages
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Investment in inventory is low
Labor utilization in high
Disadvantages The cost of adjusting output rates and/or
workforce levels
Level Approach
Advantages
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Stable output rates and workforce
Disadvantages
Greater inventory costs
Increased overtime and idle time
Resource utilizations vary over time
1. Determine demand for each period
Techniques for Aggregate Planning
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2. Determine capacities for each period
3. Identify policies that are pertinent
4. Determine units costs
5. Develop alternative plans and costs
6. Select the best plan that satisfies objectives.
Otherwise return to step 5.
Cumulative GraphFigure 12.3
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1 2 3 4 5 6 7 8 9 10
Cumulative
production
Cumulative
demandCumulativeoutput/demand
Average Inventory
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Average
inventoryBeginning Inventory + Ending Inventory
2=
Mathematical Techniques
Linear programming: Methods for obtaining
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optimal solutions to problems involvingallocation of scarce resources in terms ofcost minimization.
Linear decision rule: Optimizing techniquethat seeks to minimize combined costs,using a set of cost-approximating functionsto obtain a single quadratic equation.
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Services occur when they are rendered
Aggregate Planning in Services
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Demand for service can be difficult to
predict
Capacity availability can be difficult topredict
Labor flexibility can be an advantage in
services
Aggregate Plan to Master Schedule
Aggregate
Figure 12.4
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Aggregate
Planning
Disaggregation
MasterSchedule
Master schedule: The result of
Disaggregating the Aggregate Plan
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disaggregating an aggregate plan; showsquantity and timing of specific end items for
a scheduled horizon.
Rough-cut capacity planning: Approximatebalancing of capacity and demand to test the
feasibility of a master schedule.
Master Scheduling
Master schedule
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Determines quantities needed to meet demand Interfaces with
Marketing
Capacity planning
Production planning
Distribution planning
Master Scheduler
Evaluates impact of new orders
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Provides delivery dates for orders
Deals with problems
Production delays
Revising master schedule
Insufficient capacity
Master Scheduling ProcessFigure 12.6
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Master
Scheduling
Beginning inventory
Forecast
Customer orders
Inputs Outputs
Projected inventory
Master production schedule
Uncommitted inventory
Projected On-hand Inventory
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Projected on-hand
inventory
Inventory from
previous week
Current weeks
requirements-=
Projected On-hand InventoryBeginning
Inventory
Figure 12.8
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64 1 2 3 4 5 6 7 8
Forecast 30 30 30 30 40 40 40 40
Customer Orders
(committed) 33 20 10 4 2
Projected on-hand
inventory 31 1 -29
JUNE JULY
Customer orders arelarger than forecast in
week 1
Forecast is larger thanCustomer orders in week 2
Forecast is larger than
Customer orders in week 3
Time Fences in MPSPeriod
Figure 12.12
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Period
frozen
(firm or
fixed)
slushy
somewhat
firm
liquid
(open)
1 2 3 4 5 6 7 8 9
Solved Problems: Problem 1
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William J. Stevenson
Operations Management
8th edition
CHAPTER
13
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MRP and ERP
McGraw-Hill/Irwin
Operations Management, Eighth Edition, by William J. StevensonCopyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
Material requirements planning (MRP):
MRP
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Computer-based information system thattranslates master schedule requirements for
end items into time-phased requirements for
subassemblies, components, and rawmaterials.
Independent and Dependent DemandIndependent Demand
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A
B(4) C(2)
D(2) E(1) D(3) F(2)
Dependent Demand
Independent demand is uncertain.
Dependent demand is certain.
Dependent demand: Demand for items
Dependant Demand
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that are subassemblies or componentparts to be used in production of finished
goods.
Once the independent demand is known,the dependent demand can be
determined.
Dependent vs Independent DemandFigure 13.1
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Time
Time Time
Time
Demand
Demand
Stable demandLumpy demand
Amoun
tonhand
Amountonhand
Safety stock
MRP Inputs MRP Processing MRP Outputs
Changes
Figure 13.2
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Master
schedule
Bill of
materials
Inventory
records
MRP computer
programs
g
Order releases
Planned-order
schedules
Exception reports
Planning reports
Performance-
control
reports
Inventory
transaction
Primary
reports
Secondary
reports
Master Production Schedule
MPR Inputs
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Time-phased plan specifying timing andquantity of production for each end item.
Material Requirement Planning Process
Master Schedule
Master schedule: One of three primary
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inputs in MRP; states which end itemsare to be produced, when these areneeded, and in what quantities.
Cumulative lead time: The sum of the leadtimes that sequential phases of aprocess require, from ordering of partsor raw materials to completion of final
assembly.
Planning HorizonFigure 13.4
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1 2 3 4 5 6 7 8 9 10
Procurement
Fabrication
Subassembly
Assembly
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Product Structure Tree
ChairLevel
Figure 13.5
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Seat
Legs (2)Cross
bar
Side
Rails (2)
Cross
bar
Back
Supports (3)
Leg
Assembly
Back
Assembly
0
1
2
3
Inventory Records
One of the three primary inputs in MRP
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Includes information on the status of eachitem by time period
Gross requirements
Scheduled receipts
Amount on hand
Lead times
Lot sizes
And more
Assembly Time Chart
Procurement of
raw material D
Figure 13.7
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1 2 3 4 5 6 7 8 9 10 11
Procurement of
raw material FProcurement of
part C
Procurement of
part H
Procurement of
raw material I
Fabrication
of part G
Fabricationof part E
Subassembly A
Subassembly B
Final assembly
and inspection
MRP Processing
Gross requirements
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Schedule receipts
Projected on hand
Net requirements Planned-order receipts
Planned-order releases
MPR Processing Gross requirements
l d d d
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Total expected demand
Scheduled receipts
Open orders scheduled to arrive
Planned on hand
Expected inventory on hand at the beginning
of each time period
MPR Processing
Net requirements
l d d h d
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Actual amount needed in each time period
Planned-order receipts
Quantity expected to received at the beginning
of the period
Offset by lead time
Planned-order releases Planned amount to order in each time period
Updating the System
Regenerative system
U d MRP d i di ll
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Updates MRP records periodically
Net-change system
Updates MPR records continuously
MRP Outputs
Planned orders - schedule indicating the
d i i f f d
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amount and timing of future orders.
Order releases - Authorization for the
execution of planned orders.
Changes - revisions of due dates or order
quantities, or cancellations of orders.
MRP Secondary Reports
Performance-control reports
l i
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Planning reports
Exception reports
Other Considerations
Safety Stock
L i i
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Lot sizing Lot-for-lot ordering
Economic order quantity
Fixed-period ordering
Food catering service
E d it t d f d
MRP in Services
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End item => catered food
Dependent demand => ingredients for eachrecipe, i.e. bill of materials
Hotel renovation
Activities and materials exploded intocomponent parts for cost estimation andscheduling
Benefits of MRP
Low levels of in-process inventories
Abilit t t k t i l i t
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Ability to track material requirements
Ability to evaluate capacity requirements
Means of allocating production time
Requirements of MRP
Computer and necessary software
A t d t d t
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Accurate and up-to-date Master schedules
Bills of materials
Inventory records
Integrity of data
Expanded MRP with emphasis placed
i t ti
MRP II
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on integration Financial planning
Marketing
Engineering
Purchasing
Manufacturing
Market
DemandFinance Manufacturing
Master
production schedule
MRP IIFigure 13.14
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Demand
Production
plan
Problems?
Rough-cut
capacity planning
Yes No YesNo
Finance
Marketing
Manufacturing
Adjust
production plan
production schedule
MRP
Capacity
planning
Problems?Requirements
schedules
Adjustmaster
schedule
Capacity Planning
Capacity requirements planning:The process
f d t i i h t it
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of determining short-range capacityrequirements.
Load reports:Department or work center
reports that compare known and expectedfuture capacity requirements with projected
capacity availability.
Time fences: Series of time intervals duringwhich order changes are allowed or restricted.
Capacity Planning
Develop a tentative
master production
h d l
Use MRP to
simulate material
i t
Figure 13.15
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schedule requirements
Convert material
requirements to
resource requirements
Firm up a portion
of the MPS
Is shop
capacity
adequate?
Can
capacity be
changed to meet
requirements
Revise tentative
master production
schedule
Change
capacity
Yes
No
Yes
No
Enterprise resource planning (ERP):
Next step in an evolution that began with MPR
ERP
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Next step in an evolution that began with MPRand evolved into MRPII
Integration of financial, manufacturing, and
human resources on a single computer system.
ERP Strategy Considerations
High initial cost
High cost to maintain
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High cost to maintain Future upgrades
Training
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O ti M t
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William J. Stevenson
Operations Management
8th edition
CHAPTER
14
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JIT and
Lean Operations
McGraw-Hill/Irwin
Operations Management, Eighth Edition, by William J. StevensonCopyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
JIT/Lean Production
Just-in-time (JIT):A highly coordinated
processing system in which goods move
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processing system in which goods movethrough the system, and services are
performed, just as they are needed,
JIT lean production
JIT pull (demand) system
JIT operates with very little fat
Goal of JIT
The ultimate goal of JIT is a balanced
system
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system.
Achieves a smooth, rapid flow of materials
through the system
Summary JIT Goals and Building BlocksFigure 14.1
A
balanced
Ultimate
Goal
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Product
Design
Process
Design
Personnel
Elements
Manufactur-
ing Planning
Eliminate disruptions
Make the system flexible Eliminate waste
balancedrapid flow
Goal
Supporting
Goals
Building
Blocks
Supporting Goals
Eliminate disruptions
Make system flexible
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Make system flexible
Eliminate waste, especially excess
inventory
Sources of Waste
Overproduction
Waiting time
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Waiting time
Unnecessary transportation
Processing waste
Inefficient work methods
Product defects
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Product Design
Standard parts
Modular design
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Modular design
Highly capable production systems
Concurrentengineering
Process Design
Small lot sizes
Setup time reduction
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Setup time reduction Manufacturing cells
Limited work in process
Quality improvement
Production flexibility
Little inventory storage
Benefits of Small Lot Sizes
Reduces inventory
Less rework
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Less storage space
Less rework
Problems are more apparent
Increases product flexibility
Easier to balance operations
Production Flexibility
Reduce downtime by reducing
changeover time
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changeover time Use preventive maintenance to reduce
breakdowns
Cross-train workers to help clearbottlenecks
Production Flexibility (contd)
Use many small units of capacity
Use off-line buffers
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Use off line buffers Reserve capacity for important customers
Quality Improvement
Autonomation
Automatic detection of defects during
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Automatic detection of defects duringproduction
Jidoka
Japanese term for autonomation
Personnel/Organizational Elements
Workers as assets
Cross-trained workers
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Cross trained workers
Continuous
improvement
Cost accounting
Leadership/project
management
Manufacturing Planning and Control
Level loading
Pull systems
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Pull systems
Visual systems
Close vendor relationships
Reduced transaction
processing
Preventive maintenance
Pull/Push Systems
Pull system: System for moving work where
a workstation pulls output from thedi i d d ( K b )
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a workstation pulls output from thepreceding station as needed. (e.g. Kanban)
Push system: System for moving work where
output is pushed to the next station as it iscompleted
Kanban Production Control System
Kanban: Card or other device that
communicates demand for work ormaterials from the preceding station
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communicates demand for work ormaterials from the preceding station
Kanban is the Japanese word meaningsignal or visible record
Paperless production control system
Authority to pull, or produce comes
from a downstream process.
Kanban Formula
N = DT(1+X)C
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N DT(1 X)C
N = Total number of containers
D = Planned usage rate of using work center
T = Average waiting time for replenishment of parts
plus average production time for a
container of parts
X = Policy variable set by management
- possible inefficiency in the system
C = Capacity of a standard container
Traditional Supplier NetworkBuyer
Figure 14.4a
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Buyer
SupplierSupplier Supplier Supplier
Supplier
Supplier
Supplier
Tiered Supplier NetworkFigure 14.4b
Buyer
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Supplier
Supplier
Supplier
SupplierSupplier Supplier
SupplierFirst Tier Supplier
Second Tier Supplier
Third Tier Supplier
Comparison of JIT and Traditional
Factor Traditional JIT
Inventory Much to offset forecast Minimal necessary to operate
Table 14.3
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Inventory Much to offset forecasterrors, late deliveries
Minimal necessary to operate
Deliveries Few, large Many, small
Lot sizes Large Small
Setup; runs Few, long runs Many, short runs
Vendors Long-term relationshipsare unusual
Partners
Workers Necessary to do thework
Assets
Transitioning to a JIT System
Get top management commitment
Decide which parts need most effort
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Decide which parts need most effort
Obtain support of workers
Start by trying to reduce setup times
Gradually convert operations
Convert suppliers to JIT
Prepare for obstacles
Obstacles to Conversion
Management may not be committed
Workers/management may not be
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Workers/management may not becooperative
Suppliers may
resist Why?
JIT in Services
The basic goal of the demand flow technology inthe service organization is to provide optimum
response to the customer with the highestl d l bl
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p gquality service and lowest possible cost. Eliminate disruptions
Make system flexible
Reduce setup and lead times Eliminate waste
Minimize WIP
Simplify the process
JIT II: a supplier representative works right
in the companys plant, making sure thereis an appropriate supply on hand
JIT II
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p y p , gis an appropriate supply on hand.
Benefits of JIT Systems
Reduced inventory levels
High quality
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g q y
Flexibility
Reduced lead times
Increased productivity
Benefits of JIT Systems (contd)
Increased equipment utilization
Reduced scrap and rework
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p
Reduced space requirements
Pressure for good vendor relationships
Reduced need for indirect labor
Smooth flow of work (the ultimate goal)
Elimination of wasteC i i
Elements of JITTable 14.4
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Continuous improvement
Eliminating anything that does not add
value Simple systems that are easy to manage
Use of product layouts to minimize movingmaterials and parts
Quality at the source
Poka-yoke fail safe tools and methods
Preventative maintenance
Elements of JIT (contd)Table 14.4
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Good housekeeping
Set-up time reduction
Cross-trained employees