Chapter 12 Managing Production Operations

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

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

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What Is Quality?
The degree of excellence of a thing (Websters Dictionary) The totality of features and characteristics that satisfy needs ( ASQC) Fitness for use
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Dimensions Of Product Quality (Garvin)

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
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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
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Service Quality
1. Time & Timeliness
customer waiting time, completed on time

2. Completeness
customer gets all they asked for

3. Courtesy
treatment by employees

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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

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

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The Meaning of Quality

The Meaning of Quality

Producers Perspective

Consumers Perspective

Production

Quality of Conformance Conformance to Spec. Cost

Quality of Design Quality Char. Price

Marketing

Fitness for Consumer Use

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Cost Of Quality
Cost of achieving good quality
Prevention Appraisal

Cost of poor quality

Internal failure costs External failure costs

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The Cost of Quality

The 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
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The Cost of Quality

The 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
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Quality Control Approaches

Statistical process control (SPC)
Monitors production process to prevent poor quality

Acceptance sampling
Inspects random sample of products to determine if a lot is acceptable

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Statistical Process Control

Take periodic samples from process Plot sample points on control chart Determine if process is within limits Prevent quality problems

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Variation
Common 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
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Probability Distribution
Central tendency
mean, mode, median

Dispersion
std. deviation, variance

Frequency function
Normal, binomial, Poisson

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Types Of Data
Attribute 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

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SPC Applied To Services

Nature of defect is different in services Service defect is a failure to meet customer requirements Monitor times, customer satisfaction
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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

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Control Charts
Commonly based on 3(standard deviations) Sample mean: x-bar-charts Sample range: R-charts Sample std. deviation: s-charts Fraction defective: p-charts Number of defects: c-charts
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Process Control Chart

Upper control limit

Process average

Lower control limit

1 2 3 4 5 6 7 8 9 10

Sample number
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A Process Is In Control If
No sample points outside limits Most points near process average About equal number of points above & below centerline Points appear randomly distributed

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Development Of Control Chart

Based on in-control data If non-random causes present, discard data Correct control chart limits

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Control Charts For Attributes

p Charts
Calculate percent defectives in sample

c Charts
Count number of defects in item

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p-Chart
UCL = p + z p LCL = p z p p (1 p ) p= n p = average % defective in sample n = sample size

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The Normal Distribution

95% 99.74% -3 -2 -1 =0 1 2 3

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Control Chart Z Values

Smaller Z values make more sensitive charts Z = 3.00 is standard Compromise between sensitivity and errors

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p-Chart Example
20 samples of 100 pairs of jeans
Sample # 1 2 3 . 20 # Defects 6 0 4 . 18 200
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Proportion Defective 0.06 0.00 0.04 . 0.18 0.10

p-Chart Calculations
total defectives p= total sample observations 200 = 20(100) 10 = 0.

p (1 p ) 1 11 1 .1(1 .1) U C L= p + z =1 11 .1 + =11 .1 1 n 11 1 p (1 p ) 1 11 1 .1(1 .1) L C L= p z = 1 11 .1 =11 .1 1 n 11 1

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Example p-Chart
P r o p o r t i o n D e f e c t i v e 05/04/12 0.2 0.18 0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 0 2 4 6 8 10 12 14 16 18 20

Sample number

c-Chart
Total #defects Process average = c = # samples Sample standard deviationc = = UCL = c +z c LCL = c - z c c

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

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c-Chart Calculations
11 1 = 1 .1 1 1 1 1 UCL = c +z c = 1 .1 + 1 1 .1 = 1 .1 1 1 1 1 11 c= LCL = c - z c = 1 .1 1 1 .1 = 1 1 1 1 1 1 .1

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Example c-Chart
24 21 Number of defects 18 15 12 9 6 3 0 2 4 6 8 10 12 14 0

Sample number

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Control Charts For Variables

Mean chart (X-Bar Chart)
Uses average of a sample

Range chart (R-Chart)

Uses amount of dispersion in a sample

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Range (R) Chart

UCL = D 1R LCL = D1R k R = range of each sample k = number of samples

R R=

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

3 Control Chart Factors

Sample size n 2 3 4 5 6 7 8
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X -chart

R-chart D3 0 0 0 0 0 0.08 0.14 D4 3.27 2.57 2.28 2.11 2.00 1.92 1.86

A2 1.88 1.02 0.73 0.58 0.48 0.42 0.37

R-Chart Calculations
. 1 R = 11 = 111 R= . 1

k 1 1 UCL = D 1R = 1 11 1 ) = 1 1 .1( .11 .11 LCL = D1R = 11 1 ) = 1 ( .11

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Example R-Chart
R-Chart
11 . 1 11 . 1 Range 11 . 1 11 . 1 11 . 1 11 . 1 11 . 1 1 1 1 1 1 1 1 1 1 1 1 Sample R CL(R) UCL(R) LCL(R)

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X-bar Chart Calculations

x +x x=
1

+ + x k

1.1 11 = =1 1 .1cm 1 1

UCL = x + A1R = 1 1 ( 1 1 .11 = 1 1 .1 + .1)( 1 ) .1 LCL = x A1R = 1 1 ( 1 1 .11 = 1 1 .1 .1)( 1 ) .1 x = average of sample means R = average range value
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X-bar Chart Example

x x =
k 1.1 11 = =1 1 .1cm 1 1

UCL = x + A1R = 1 1 (1 1 1 1 ) = 1 1 .1 + .1)( .1 1 .1 LCL = x A1R = 1 1 (1 1 1 1 ) = 1 1 .1 .1)( .1 1 .1

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Using X-bar and R-Charts Together

Each measures process differently Process average and variability must be in control

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Example X-bar Chart

X-bar Chart
11 1 . 1 11 1 . 1 X-bar 11 1 . 1 11 1 . 1 11 1 . 1 11 1 . 1 1 1 1 1 1 1 1 1 1 1 1 Sample x-bar CL(x-bar) UCL(x-bar) LCL(x-bar)

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Indication 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

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Control Chart Patterns

UCL UCL

LCL

LCL

Sample observations consistently below the center line

Sample observations consistently above the center line

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Control Chart Patterns

UCL UCL

LCL

LCL

Sample observations consistently increasing

Sample observations consistently decreasing

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Control Chart Patterns

UCL UCL

LCL

LCL

Sample observations consistently below the center line

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Sample observations consistently above the center line

Zones For Pattern Tests

UCL 1 sigma = x + A1R
Values for example 5.08 5.05 5.03 5.01

Zone A Zone B Zone C Zone C Zone B

1 ( A1R ) 1 1 1 a = x + ( A1R ) sigm 1 1 a =x + sigm

x
1 a =x sigm

LCL
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Zone A

1 ( A1R ) 4.98 1 1 1 a = x ( A1R ) 4.965 sigm 1

4.94

1 sigma = x A1R

Control Chart Patterns

1. 8 consecutive points on one side of the center line. 2. 8 consecutive points up or down across zones. 3. 14 points alternating up or down. 4. 2 out of 3 consecutive points in zone A but still inside the control limits. 5. 4 out of 5 consecutive points in zone A or B.

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Inspection & Sampling

100% inspection
only with automated inspection

Sampling inspection
Single sampling Double sampling Multiple sampling

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

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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

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Producers & Consumers Risk

TYPE I ERROR = P(reject good lot) or producers risk
5% is common

TYPE II ERROR = P(accept bad lot) or consumers risk

10% is typical value

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Quality Definitions
Acceptance quality level (AQL)
Acceptable fraction defective in a lot

Lot tolerance percent defective (LTPD)

Maximum fraction defective accepted in a lot

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Operating Characteristic (OC) Curve

Shows probability of lot acceptance Based on
sampling plan quality level of lot

Indicates discriminating power of plan

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Operating Characteristic Curve

1.00

= 0.05

{
0.80

Probability of acceptance, Pa

OC curve for n and c

0.60

0.40

0.20

= 0.10

{
0.02 0.04 0.06 0.08 0.10 0.12 0.14 0.16 0.18 0.20

AQL
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Proportion defective

LTPD

Average Outgoing Quality (AOQ)

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

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AOQ Curve
0.015

AOQL Average Outgoing Quality

0.010

0.005

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0.10

AQL

LTPD (Incoming) Percent Defective

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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

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Multiple (Sequential) Sampling Plans

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

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Choosing a Sampling Method

An economic decision Single sampling plans high sampling costs Double/Multiple sampling plans
low sampling costs

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Taguchi Methods
Deviation from ideal value => loss of society L = k (y T)2 Use ANOVA to identify the sources of variation

Loss

y
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Total Quality Management

Evolution of Total Quality Management
W. Edwards Deming Joseph M. Juran, Philip Crosby, and Armand V. Feigenbaum

TQM and Continuous Process Improvement

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Principles of Total Quality Management

Deming's 14 points
1. Create a constancy of purpose toward product improvement to achieve long-term organizational goals. 2. Adopt a philosophy of preventing poor-quality products instead of acceptable levels of poor quality as necessary to compete internationally. 3. Eliminate the need for inspection to achieve quality by relying instead on statistical quality control to improve product and process design. 4. Select a few suppliers or vendors based on quality commitment rather than competitive prices.
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Deming's 14 points
5. 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. 6. Institute worker training that focuses on the prevention of quality problems and the use of statistical quality control techniques. 7. Instill leadership among supervisors to help workers perform better. 8. Encourage employee involvement by eliminating the fear of reprisal for asking questions or identifying quality problems.
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Deming's 14 points
9. Eliminate barriers between departments, and promote cooperation and a team approach for working together. 10. Eliminate slogans and numerical targets that urge workers to achieve higher performance levels without first showing them how to do it. 11. Eliminate numerical quotas that employees attempt to meet at any cost without regard for quality.
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Deming's 14 points
12. Enhance worker pride, artisanry and selfesteem by improving supervision and the production process so that workers can perform to their capabilities. 13. Institute vigorous education and training programs in methods of quality improvement throughout the organization, from top management down, so that continuous improvement can occur. 14. Develop a commitment from top management to implement the previous thirteen points.
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Deming Wheel (PDCA Cycle)

1 Act . Institutionalize improvement; continue the cycle. 1 Plan . Identify the problem & develop the plan for improvement 1 Do . Implement the Plan on a test basis

1 Study/Check . Assess the plan; Is it working?

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Total Quality Management

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

TQM Throughout The Organization

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Marketing, sales, R&D Engineering Purchasing Personnel Management Packing, storing, shipping Customer service

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

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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

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Productivity
Output produced per unit of resources

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Quality And Productivity

Productivity = Output produced per unit of resources = output / input Fewer defects increase output Quality improvement reduces inputs
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Toward a New Era in US Manuf.

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.

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Work Measurement
Fair days work concept
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.
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Uses of Time Standards

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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

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

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Work Measurement
Engineered Time Standards
Basic Time-Study Method
Define work cycle Take time measurements Apply rating & allowance

Methods-time Measurement (MTM)

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Work Measurement
Criticism:
Direct labor only Productivity, not quality

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

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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 lifecycle 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"
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Human Resources Management

Recruiting & employment Equal Employment Opportunity Industrial relations Compensation Education & training Employee benefits

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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

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Purchasing Engineer

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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

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

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

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