SCM Final Exam

chapters 9, 10, 14, 17

deming

14 points

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special versus common causes of variation

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(blame the system, not workers)

Juran

quality is fitness-for-use

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quality trilogy

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(80% issues from 20% problems)

Crosby

quality is free

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zero defects

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(do it right the first time, cost you a lot less)

Ohno and Shingo

continuous improvement

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(toyota production system)

quality

ability of a product or service to consistently meet or exceed customer expectations (varies by customer)

determinants of quality

four determinants that measure the degree to which a product or service successfully satisfies its intended purpose

quality of design

intention of designers to include or exclude features

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takes into account customer wants, production/service capabilities, safety, liability, costs

quality of conformance

degree to which goods and services conform to the intent of the designers

ease of use

clear user instructions increase the likelihood customers will use the product as intended

service after delivery

customer experiences with repairing, returning, replacing, adjusting a product

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how well are we handling customer complaints and issues?

what can a company control in terms of quality

reduce variability = increase product and process quality

appraisal costs

measuring, evaluating, and auditing materials, parts, products, and services to assess conformance with quality standards

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inspect equipment, testing, labs, interruption of production to take samples

prevention costs

reducing the potential for quality problems

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training, monitoring, data collection and analysis, design costs

internal failure costs

cost related to defective products or services before they are delivered to customers

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rework costs, problem solving, material and product losses, scrap and downtime

external failure costs

delivering substandard products or services to customers

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returned goods, reworking costs, warranty costs, loss of goodwill, liability claims, penalities

design quality

knowingly designing something subpar, not as good as it could be

work standards

putting workers in unsafe condition, don’t give them right equipment

materials used

using materials after they were recalled or told bad

knowledge of issues

know about it and do nothing about it

organization’s response

hide the problem or make it right

problem solving

plan - do - study - act

process improvement

systematic approach to improving a process

goals of a systematic approach

increase - customer satisfaction, quality, productivity

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decrease - waste, cost, processing time

six sigma - defects

no more than 3.4 defects per million opportunities

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(99.99966% output defect free)

six sigma

reduce occurrence of defects to achieve lower costs and improved customer satisfaction

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use data to identify and reduce variation

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control inputs to improve outputs

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pareto effect applies - find the few key inputs

DMAIC

define, measure, analyze, improve, control

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problem-solving process in 6 sigma

histogram

x = quantitative variables

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sorted by x values

scatter plot

plots 2 quantitative variables as x, y coordinates

check sheet

anything we can count

pareto chart

cumulative proportion of ‘checks’

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x = qualitative variable

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chart sorted by y

need for quality control

monitor output of processes to ensure they are performing in an acceptable manner

second law of thermodynamics

processes in control don’t stay in control

basic issues of inspection

how much to inspect and how often

we can’t test every item we produce so we use

samples

random variation

common variability, chance variation

nonrandom variation

special variation, assignable cause variation

things we can measure

height, weight, length, diameter

mean chart (x-bar chart

plot sample’s mean or average

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monitor central tendency

range chart (r-chart)

plot sample range

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monitor dispersion around the mean, amount of variation in a process’s output

control charts

time-ordered plot of sample statistics

allowable limits

all sample statistics are within lower and upper control limits

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no upward or downward trend in either chart

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no runs of 7 or more on the same side of the center line

if too much variation

assume assignable cause variation, process is not in control

SPC

measures variation in a process

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internal quality measure for a firm

we have to meet customers’

specifications

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external measure

once process is in control

determine if our process is capable of meeting the customer’s needs

question answered by process capability index

are we capable of producing what a customer will buy?

lower and upper specification limits

what the customer considers allowable variation in the process

process capability with 1

process width exactly matches specification width

minimally capable (textbook = not capable)

99\.7% of output should meet the customer’s need

textbook CP reccomendation

1\.33 or higher

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customer allows 33% more variability than we expect from our output

lean operations and just in time

highly coordinated, flexible system that uses fewer resources than a traditional system

hidden costs of inventory

extra inventory hides problems and costs, bottlenecks, waste, poor timing, supplier quality issues, communication problems

goals of lean system

eliminate disruptions

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make the system flexible

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eliminate waste, especially excess inventory

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root cause is variability a lot

muda

waste and inefficiency

kanban

manual system for controlling the movement of parts and materials that respond to signals of the need for delivery of parts or materials

heijunka

variations in production volume lead to waste

kaizen

continuous improvement of the system

jidoka - autonomation

quality at the source

SMED

single minute exchange of die - rapid changeovers from one product to another

poka-yoke

mistake-proofing or fail-safing a process

5-s

housekeeping (sort, straighten, sweep, standardize, self-discipline)

push system

traditional production environment. work is pushed to the next workstation as it is completed (MPR)

pull system

a workstation pulls output from the preceding station as it needs (lean and just in time)

waste

anything that a customer wouldn’t be willing to pay for if they knew about it, or anything that doesn’t add value

defects

efforts caused by reworking, scrap, and incorrect info

overproduction

production that is more than needed or before it is needed

waiting

wasted time waiting for the next step in a process

non-utilized talent

underutilizing people’s talents, skills, and knowledge

transportation

unnecessary movements of products and materials

inventory

excess products and materials not being processed

motion

unnecessary movements by people

extra-processing

more work or higher quality than is required by the customer

aim of most tools and techniques of lean

reduce variability, increase consistancy

projects require

set of interdependent steps

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(made up of processes)

projects have

a deadline and goal

constraints in projects

cost

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schedule

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performance objectives (scope)

project is an endeavor

that is unique, time-bound that require the use of constrained resources

a set of interdependent steps to achieve a goal is a

process

a sequence of organizations involved in producing and delivering a good or service is a

supply chain

businesses compete on some combination of

price, delivery time and product or service differentiation

a firm in a delivery time strategy, operations organization will focus on a priority of either

quick response or flexibility

cross-functional design team solves potential problems, reduces costs, and shortens time to market is called

concurrent engineering

design process that focuses on ease of manufacturing or assembly

design for manufacturing

the center of gravity method is used to

minimize travel time or shipping costs

the two criteria in service process design are degree of customization and degree of

customer contact

key aspects of the process selection challenge include

capital intensity and process flexibility

key questions in the process selection task are

how much variety will be imposed on the process

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at what volume will the process need to operate

efficiency ratio is

actual output / effective capacity

utilization ratio is

actual output / design capacity

applying criteria to choose suppliers such as lead time, flexibility, price, and quality is part of

vendor analysis

reviewing supplier adherence to requirements is the

supplier audits part of supplier management

small changes in consumer demand can result in large variations in orders placed because of the

bullwhip effect

the movement of goods, service, information and cash in a supply chain is the responsibility of

logistics

delivering the right products at the right time, and shipping using the customer’s preferred method are aspects of

the perfect order

aggregate planning is capacity planning for

the intermediate range

what is not a basic option for altering demand

subcontracting

using the chase strategy, variations in demand could be met by

varying output during regular time by changing employment levels

taxes and insurance costs are an example of

carrying (or holding) costs

we can use EOQ if all of these assumptions are met except

quantity discounts are available

MRP is used to determine demand for

dependent demand items (bottlecaps that go on soda bottles)