Prod Techniques Old

PRODUCTIVITY TECHNIQUES
PRODUCTIVITY TECHNIQUES
MEANING OF PRODUCTIVITY
PRODUCTIVITY IS OFTEN ASSOCIATED WITH PRODUCTION HIGHER PRODUCTION IS NOT HIGHER PRODUCTIVITY INCREASE IN PRODUCTION CAN BE ACHIEVED BY INCREASING QUANTUM OF INPUT BUT THAT DOES NOT INCREASE PRODUCTIVITY HIGHER PRODUCTIVITY RESULTS IF PRODUCTION PER EMPLOYEE OR PER MACHINE INCREASES ALONGSIDE WITH QUALITY PRODUCTIVITY IS CREATING SURPLUS THRU PRODUCTIVE OPERATIONS WHERE OUTPUT IS ALWAYS GT INPUT PRODUCTIVITY IS DEFINED AS OUTPUT WITHIN DEFINED TIME AND AS PER QLTY NORMS/INPUT
MEANING OF PRODUCTIVITY
BOTH OUTPUT AND INPUT SHOULD BE QUANTIFIED IN TANGIBLE MONETARY TERMS PRODUCTIVITY CAN BE IMPROVED BY -INCREASING OUTPUT WITH SAME INPUT -INCREASING OUTPUT MORE THAN THE INCREASE IN INPUT -DECREASING INPUT FOR THE SAME AMOUNT OF OUTPUT -INCREASING OUTPUT WHILE DECREASING INPUT PRODUCTIVITY IMPLIES EFFECTIVENESS AND EFFICIENCY IN INDIVIDUAL AND
DEFINITION OF PRODUCTIVITY
PRODUCTIVITY IS THE RATIO BETWEEN OUTPUT OF WEALTH TO THE INPUT OF RESOURCES USED IN THE PROCESS OF MFG PRODUCTIVITY = OUTPUT OF WEALTH/INPUT OF RESOURCES INPUTS ARE MATERIAL , MONEY , MACHINES , PEOPLE ANOTHER PARAMETER OFTEN USED IS PERFORMANCE WHICH IS (ACTUAL ACHIEVEMENT IN TERMS OF EFFECTIVE WORK DONE)/(STANDARD TARGET OF ACHIEVEMENT) * 100
PERFORMANCE IS EXPRESSED AS PERFORMANCE INDEX WHICH IS % OF STANDARD TARGET OR EFFECTIVENESS OF PRODUCTIVITY .PRODUCTIVITY = OUTPUT/INPUT = PERFORMANCE ACHIEVED/RESOURCES CONSUMED = EFFECTIVENESS/EFFICIENCY PRODUCTIVITY CAN BE APPLIED TO MATERIAL , EQUIPMENT,MEN,CAPITAL MATRL = 1 TONNE OF HOT ROLLED STEEL PRODUCES 0.8 TONNE OF COLD ROLLED STEEL REST IS SCRAP. PRODUCTIVITY WAS 80%. THE ENGINEERS AT TISCO STUDIED THE PROCESS AND THRU METHOD STUDY INCREASED PRODUCTIVITY TO 90% BY REDUCING SCRAP
MACHINE = RATED THROUGHPUT OF POWER PLANT WAS 100 MWH. ACTUAL THROUGHPUT(PLF) WAS 72% WHICH MEANT THE POWER PLANT HAD 28% LOSSES.AFTER STUDYING HEAT LOSSES AND INSTALLING PREHEATERS AND REGENERATORS THE HEAT LOSS WAS REDUCED BY 8%.HENCE PRODUCTIVITY OF POWER PLANT ROSE TO 80% MAN = STANDARD OUTPUT OF TRAINED 1 YEAR EXPERIENCED ORACLE PROGRAMMER IS 80 DEBUGGED LINES OF CODE PER DAY. ON A PARTICULAR DAY MR X PRODUCED 60 LINES. HIS PRODUCTIVITY WAS 75%
MYTHS IN PRODUCTIVITY
PRODUCTION IMPROVEMENT MEANS PRODUCTIVITY IMPROVEMENT EFFICIENCY IMPROVEMENT GUARANTEES PRODUCTIVITY IMPROVEMENT IMPROVEMENT IN SALES REVENUE ENSURES PRODUCTIVITY IMPROVEMENT QUALITY IMROVEMENT ENHANCES PRODUCTIVTY
PARTIAL PRODUCTIVITY
DEFINED AS RATIO OF TOTAL OUTPUT TO ANY ONE TYPE OF INPUT eg MATERIAL , MONEY ,LABOUR , ENERGY LABOUR PRODUCTIVITY = TOTAL OUTPUT/LABOUR COST eg 1000 cr/300cr = 3.3 MATERIAL PRODUCTIVITY =TOTAL OUTPUT/MATRL COST eg 1000cr/200cr 5.0 CAPITAL PRODUCTIVITY = TOTAL OUTPUT/CAPITAL COST eg 1000cr/300 = 3.3 CAN ALSO BE CALLED FIXED ASSET PRODUCTIVITY ENERGY PRODUCTIVITY =TOTAL OUTPUT/ENERGY COST eg 1000cr/100cr = 10
PARTIAL PRODUCTIVITY
PARTIAL PRODUCTIVITY GIVES MEASURE OF IMPACT OF TYPE OF INPUT ON OVERALL PRODUCTIVITY PARTIAL PRODUCTIVITY HELPS IN DETERMINING IMPORTANCE OF TYPE OF INPUT ON EFFECTIVENESS OF PROCESS
ASSET ENERGY SUSTAINABILITY INDEX

Most companies concentrate on achieving a high degree of overall equipment effectiveness OEE = UPTIME * EFFICIENCY * QUALITY where efficiency is the throughput productivity But while doing so how much is the extra energy consumed Are we achieving higher throughputs but sacrificing energy consumption Asset Energy Sustainability Index = OEE * (Expected energy consumption per unit produced/Actual energy consumed per unit)
COMPARITIVE PLANT FIGURES OF ENERGY CONSUMPTION PER VEHICLE IN HERO HONDA PLANTS
2009
PLANT VEH KWH/VEH 35.85 31.12 24.63 GURGAON 15.59L DHARUHERA 15.99L HARIDWAR 6.30L
2010
VEH 15.93L 15.33L 14.04L KWH/VEH 36.97 32.09 17.31
SOURCE ANNUAL REPORT OF HERO HONDA 2009-2010
PARTIAL PRODUCTIVITY ADVANTAGES

EASY TO UNDERSTAND EFFECT OF INDIVIDUAL FACTOR OF INPUT ON OUTPUT EASY TO OBTAIN DATA EASY TO COMPUTE PRODUCTIVITY INDICES EASY TO CONVINCE MGT OF BENEFITS GOOD DIAGNOSTIC TOOLS AVAILABLE TO PINPOINT AREAS OF PRODUCTIVITY IMPROVEMENT
PARTIAL PRODUCTIVITY DISADVANTAGES

IF USED ALONE CAN BE MISLEADING STRESSES ON ONE FACTOR CANNOT EXPLAIN OVERALL COST INCREASES TEND TO SHIFT BLAME ON WRONG AREAS OF MGT CONTROL IN THE CASE OF PARTIAL LABOR PRODUCTIVITY THE CONTRIBUTION OF INDIRECT LABOR IS NOT TAKEN INTO CONSIDERATION
PROBLEM WITH TRADITIONAL LABOR PRODUCTIVITY

OUTPUT PRODUCED IS A RESULT OF JOINT AND SIMULTANEOUS IMPACT OF ALL RESOURCES NOT ONLY LABOR COMPANIES SHOWING HIGH LABOR PRODUCTIVITY GROWTH RATES ARE NOT ALWAYS COMPETITIVE IN THE MARKET ORGANIZATIONS WITH COLLECTIVE BARGAINING AGREEMENTS BASED ONLY ON LABOR PRODUCTIVITY TEND TO REDUCE THE UNIT LABOR COST BUT NOT ALWAYS THE TOTAL UNIT COST eg COMPUTERIZATION LEADING TO LABOR REDUCTION
PROBLEM WITH TRADITIONAL LABOR PRODUCTIVITY

DIFFICULT TO IMPLEMENT TEAM CONCEPTS OF MGT WHEN PERFORMANCE MGT IS FOCUSED ONLY ON LABOR PRODUCTIVITY RATHER THAN TOTAL PRODUCTIVITY ORG STRUCTURES TEND TO BE LESS FLEXIBLE WHEN EMPHASIS IS ON CONTROL OF LABOR PRODUCTIVITY RATHER THAN TOTAL PRODUCTIVITY DIFFICULT TO DIRECTLY RELATE LABOR PRODUCTIVITY TO PROFITS IN MOST MFG OUTFITS LABOR COST IS NOT A SIGNIFICANT COMPONENT OF DIRECT COSTS eg
TOTAL FACTOR PRODUCTIVITY

DEFINED AS RATIO OF NET OUTPUT TO SUM OF LABOUR AND CAPITAL INPUTS NET OUTPUT = TOTAL OUTPUT INTERMEDIATE GOODS AND SERVICES PURCHASED INTERMEDIATE GOODS AND SERVICES PURCHASED INCLUDE RAW MATRL,COMPONENTS,ENERGY COSTS,FUEL,FEES FOR SERVICES etc ALSO CALLED VALUE ADD WHEN COSTS COMPUTED
EXAMPLE OF TOTAL FACTOR INDEX

TOTAL FACTOR PRODUCTIVITY = OUTPUT/CAPITAL + LABOUR INPUT = 100/(20 + 55) =100/75 = 1.33 VALUE ADD = SALES PROCURE PRICE SERVICES PRICE = 2500 1000 500 = 1000 VALUE ADD PER EMPLOYEE = 1000/200 = 5
ADVANTAGES OF TOTAL FACTOR PRODUCTIVITY

DATA IS EASY TO OBTAIN APPEALING FROM ECONOMIST POINT OF VIEW
DISADVANTAGES OF TOTAL FACTOR PRODUCTIVITY

VALUE ADDED APPROACH TO DEFINING OUTPUT IS NOT VERY APPROPRIATE NOT APPROPRIATE WHEN MATRL COST FORMS SIZEABLE PORTION OF TOTAL PRODUCT COST ONLY LABOR AND CAPITAL INPUTS ARE CONSIDERED DATA FOR COMPARISON PURPOSES IS DIFFICULT TO OBTAIN
TOTAL PRODUCTIVITY
TOTAL PRODUCTIVITY IS THE RATIO OF TOTAL OUTPUT TO THE SUM OF ALLINPUT FACTORS MEASURE WHICH TAKES INTO CONSIDERATION THE JOINT IMPACT OF ALL INPUT RESOURCES ON OUTPUT SUCH AS MATERIAL,MACHINES,CAPITAL,ENERGY etc MEASURE VERY POPULAR IN INDUSTRY
ADVANTAGES OF TOTAL PRODUCTIVITY
CONSIDERS ALL QUANTIFIABLE OUTPUT AND INPUT FACTORS AND IS THEREFORE A MORE ACCURATE REPRESENTATION OF THE REAL ECONOMIC PICTURE OF THE COMPANY PROFIT CONTROL THRU THE USE OF THESE INDICES IS OF BENEFIT TO THE MGT IF USED IN CONJUNCTION WITH PARTIAL PRODUCTIVITY CAN DIRECT MGT ATTENTION IN AN EFFECTIVE MANNER SENSITIVITY ANALYSIS IS EASIER TO PERFORM EASILY RELATED TO TOTAL COSTS MULTIPLE GOALS CAN BE ACHIEVED SIMULTANEOUSLY BY INCREASING TOTAL PRODUCTIVITY OF A COMPANY USING THE RELATIONSHIP BETWEEN PROFIT AND TOTAL PRODUCTIVITY A FIRM CAN OBJECTIVELY PLAN ITS PROFIT LEVEL BASED ON ITS ABILITY TO REACH A CERTAIN PRODUCTIVITY LEVEL USING THE CONCEPT OF BREAK EVEN POINT OF TOTAL PRODUCTIVITY A FIRM CAN DETERMINE IF ITS TOTAL PRODUCTIVITY LEVEL IS A VALUE THAT YIELDS PROFITS MGT IS FORCED INTO A LONG TERM ACTION ON QLTY,PROFITABILITY etc
DISADVANTAGES OF TOTAL PRODUCTIVITY

DATA FOR COMPUTATION IS DIFFICULT TO OBTAIN AT PRODUCT AND CUSTOMER LEVEL LIKE THE PARTIAL AND TOTAL FACTOR MEASURES THIS ALSO DOES NOT CONSIDER INTANGIBLE FACTORS OF OUTPUT AND INPUT IN A DIRECT MANNER
AMERICAN PRODUCTIVITY CENTRE MODEL

MODEL DERIVES EQUATION OF PROFITABILITY WITH PRODUCTIVITY AND PRICE RECOVERYFACTOR PROFITABILITY = SALES/COST = OUTPUT QTY * PRICE/INPUT QTY * UNIT COST =OUTPUT QTY/INPUT QTY *UNIT PRICE/UNIT COST =PRODUCTIVITY * PRICE RECOVERY FACTOR PRICE RECOVERY FACTOR INDICATES THE INFLATIONARY EFFECT AND PRODUCTIVITY GIVES THE AMOUNT OF RESOURCES CONSUMED TO PRODUCE THE DEFINED OUTPUT. IT IS THE PRICE RATIO OF CURRENT PERIOD TO THE BASE PERIOD
APPLICATIONS OF PRODUCTIVITY TECHNIQUES

APPLIED TO ALL FUNCTIONAL AREAS BOTH IN MFG AND SERVICES CONCEPTS OF PRODUCTIVITY VITAL TO SUCCESS AND SURVIVAL OF ORG IN TODAYS HIGHLY COMPETITIVE GLOBAL BUSINESS ENVIRONMENT ONLY MEASUREMENT OF PRODUCTIVITY INADEQUATE FOR COMPANY TO SURVIVE CONTINUOUS IMPROVEMENT IN PRODUCTIVITY IN ALL FUNCTIONAL AREAS AT A RATE FASTER THAN COMPETITION IS A DECISIVE BUSINESS FACTOR FOR SURVIVAL AND SUCCESS OF
KEY PARAMETERS
MARKETING ACCURACY OF DEMAND FORECASTING -COST LEADERSHIP -SERVICING SPEED AND EFFECTIVENESS -OPTIMISED PRODUCT MIX PRODUCTION -INVENTORY CONTROL -JUST IN TIME -PROCUREMENT COST -SAFETY
AREAS OF PRODUCTIVITY TECHNIQUES

SUPPLY CHAIN MGT DEMAND FORECASTING COST MANAGEMENT LOGISTIC MGT SERVICING SPEED AND EFFECTIVENESS METHOD STUDY PLANT LAYOUT MATERIAL HANDLING INVENTORY CONTROL (INV TURNOVER RATIO) WORK MEASUREMENT
AREAS OF PRODUCTIVITY TECHNIQUES

MOTION STUDY MATERIALS MGT AND CONTROL PRODUCTION PLANNING AND CONTROL INVENTORY MODELS ERGONOMICS SAFETY JOB EVALUATION
CAUSES OF POOR PRODUCTIVITY

LACK OF PRODUCTIVITY MEASURES BY WAY OF ABSENCE OF A SYSTEM TO CAPTURE CORRECT AND TIMELY INPUTS RELEVANT TO PRODUCTIVITY MEASUREMENTS ESPECIALLY FOR ADMINISTRATIVE STAFF FAULTY APPRAISAL SYSTEM BASED ON QUALITATIVE JUDGEMENTS INADEQUATE WORK ASSIGNMENT DEMOTIVATED OR UNDER CAPABLE EMPLOYEES LOW EMPLOYEE INVOLVEMENT HUMAN CONFLICTS LACK OF TRAINING AND SKILLS UPGRADES TECHNOLOGICAL CHANGES ESPECIALLY FROM CLIENT SERVER TO THIN CLIENT UNBALANCED PRODUCTION LINE OR UNRELIABLE LINE
MATERIAL BASED PRODUCTIVITY TECHNIQUES

INVENTORY CONTROL SUPPLY CHAIN MGT MATERIAL HANDLING QUALITY ASSURANCE JUST IN TIME MFG AND PROCUREMENT
PEOPLE BASED PRODUCTIVITY TECHNIQUES

INDIVIDUAL FINANCIAL INITIATIVES GROUP FINANCIAL INITIATIVES LIBERAL FRINGE BENEFITS EMPOWERMENT AND OWNERSHIP TRAINING AND PERSONAL DEVELOPMENT JOB ENRICHMENT AND ROTATION EMPLOYEE PARTICIPATION IN MGT
PRODUCT BASED PRODUCTIVITY TECHNIQUES

VALUE ENGINEERING PRODUCT DIVERSIFICATION PRODUCT SIMPLIFICATION PRODUCT FLEXIBILITY AND AGILITY BENCHMARKING
WORK MEASUREMENT INCLUDING METHOD STUDY , TIME STUDY , MOTION STUDY JOB DESIGN JOB EVALUATION AND JOB SAFETY
TASK BASED PRODUCTIVITY TECHNIQUES
ILO APPROACH TO PRODUCTIVITY IMPROVEMENT

ILO APPROACH IS TASK BASED IT BREAKS MFG TIME INTO BASIC WORK CONTENT ,ADDED WORK CONTENT AND INEFFECTIVE TIME APPROACH FOCUSES ON REDUCING INEFFICIENT TIME IN THE TOTAL WORK CONTENT
INEFFECTIVE TIME
ALL INTERRUPTIONS WHICH CAUSE STOPPAGE IN OPERATION IS REGARDED AS INEFFICIENT TIME BECAUSE NO WORK EFFECTIVE TOWARDS COMPLETION OF OPERATION IN HAND IS BEING DONE DURING PERIOD OF INTERRUPTION INEFFECTIVE TIME DUE TO SHORTCOMINGS BY MGT.TIME DURING WHICH MAN/MC IS IDLE BECAUSE MGT FAILED TO PLAN DIRECT OORDINATE OR CONTROL EFFICIENTLY
REDUCTION IN INEFFECTIVE TIME

INEFFECTIVE TIME WITHIN CONTROL OF WORKER CAN BE REDUCED THRU ADOPTION OF FOLLOWING INITIATIVES - POOR DESIGN AND FREQUENT DESIGN CHANGES -WASTE OF MATERIAL -INCORRECT QUALITY STDS -POOR LAYOUT AND UTILIZATION OF SPACE -INADEQUATE MATEIAL HANDLING -FREQUENT PRODUCTION STOPPAGES -INEFFECTIVE WORK METHODS -POOR WORK PLANNING -FREQUENT BREAKDOWNS -ABSENTEEISM , WRONG ATTITUDES -POOR WORKMANSHIP -ACCIDENTS AND SAFETY ISSUES
SURVEY RESULTS ON PRODUCTIVITY

TYPICAL 8 HR DAY -3.5 HRS(44%) PRODUCTIVE TIME -1.2 HRS(15%) UNAVOIDABLE DELAYS -3.3 HRS(41%) WASTED TIME REASONS FOR PRODUCTIVITY LOSS -POOR PLANNING AND WORK SCHEDULING (35%) -UNCLEAR INSTRUCTIONS TO EMPLOYEES(25%) -INABILITY TO ADJUST STAFF SIZE AND DUTIES DURING PEAK LOADS(15%)eg BANK CASH DISPENSING TELLERS -POOR COORDINATION OF MATRL FLOW ,UNAVAILABILITY OF MACHINE(25%)
COMMON MFG RATIOS

UNITS PRODUCED/LABOR HRS REWORK HRS REQD/UNITS PRODUCED NUMBER DEFECTS/TOTAL UNITS MACHINE UTILIZATION % WT OF WASTE/WT OF FINISHED GOODS WT OF FINISHED GOODS/RM WEIGHT
COMMON SERVICES RATIOS

NUMBER OF CUSTOMER COMPLAINTS/ORDERS DELIVERED OR NUMBER OF PRODUCTS SOLD NUMBER OF DATA ENTRY ERRORS /TOTAL DATA ENTERED LATE DELIVERIES/TOTAL DELIVERIES PROJECT PLANNED COST/ACTUAL COST OVERTIME HRS/REGULAR HRS CUSTOMER RETURNS% WARRANTY COSTS/SALES%
HARD METRICS IN PRODUCTIVITY

PLANT UTILIZATION ENERGY EFFECTIVENESS INDEX NUMBER OF ACCIDENTS AND HRS LOST DUE TO ACCIDENTS OVERALL PLANT EFFECTIVENESS OVERALL PROCUREMENT EFFECTIVENESS OVERALL DISTRIBUTION EFFECTIVESS
SOFT METRICS IN PRODUCTIVITY

EMPLOYE MORALE EMPLOYEE LOYALTY EMPLOYEE INVOLVEMENT JOB SATISFACTION HONESTY
SUMANTHS TOTAL PRODUCTIVITY MODEL

MODEL DEFINES TOTAL PRODUCTIVITY MEASURE WHICH INCLUDES ALL THE OUTPUT AND INPUT FACTORS THE TPM IS BASED ON TANGIBLE OUTPUT AND INPUT ELEMENTS WHICH ARE DIRECTLY MEASUREABLE AND QUANTIFIABLE MODEL ALSO REFLECTS THE IMPACT OF INTANGIBLES DIRECTLY eg IF THE TOTAL PRODUCTIVITY LEVEL GOES DOWN IN A PERIOD IT COULD BE BECAUSE OF POOR QLTY OF RAW MATRL WHICH INCREASE THE MATRL INPUT OR REDUCED OUTPUT AS A RESULT OF REWORK
IMPLEMENTATION PROCESS FOR TOTAL PRODUCTIVITY MGT

MISSION STATEMENT DEVELOPMENT
TOTAL PRODUCTIVITY MODEL AND COMPREHENSIVE TOTAL PRODUCTIVITY MODEL ANALYSIS MGT GOALS DEVELOPMENT FISHBONE ANALYSIS ACTION PLANS DEVELOPMENT PRODUCTIVITY QUALITY TEAM TRAINING IMPLEMENTATION OF ACTION PLANS ASSESSING THE EXTENT TO WHICH THE MGT GOALS ARE ACHIEVED TOTAL PRODUCTIVITY GAINSHARING NEW GOALS DEVELOPMENT
STEP 1 MISSION STATEMENT

AN ENTERPRISE WITHOUT A MISSION STATEMENT IS LIKE A BUILDING WITHOUT A FOUNDATION MOST COMPANIES HAVE SO LITTLE SUCCESS WITH NEW IDEAS BECAUSE THEY DONT HAVE A CENTRAL GUIDING PHILOSOPHY CAPTURED THRU A VISION AND A MISSION A VISION REPRESENTS A VERY LONG TERM GOAL A MISSION REPRESENTS A SHORT TO MEDIUM TERM STATEMENT OF PURPOSE A MISSION STRETCHED OVER A RELATIVELY LONG PERIOD OF TIME BECOMES A VISION A CORRECTLY DRAFTED MISSION SHOULD HAVE SEVERAL CHARACTERISTICS
FACTORS TO BE CONSIDERED IN MISSION STATEMENT

HIGHLIGHT MAJOR STRENGTHS HIGHLIGHT ENVIRONMENTAL FACTORS SUCH AS ECONOMIC,POLITICAL,SOCIAL) STRATEGY FOR COMBATTING COMPETITION QUALITY OF SERVICE STRATEGY FOR SUPPLIERS CUSTOMER CHARACTERISTICS MARKET CHARACTERISTICS
CHARACTERISTICS OF GOOD MISSION STATEMENT

ARTICULATES GUIDING PHILOSOPHY OF ENTERPRISE WITH A CENTRAL FOCUS CONCISELY WORDED COMES NATURALLY TO EVERYONE DEVELOPED CAREFULLY THRU ACTIVE INVOLVEMENT OF EMPLOYEES NEEDS TO BE REVISED AS PER THE TACTICAL AND STRATEGIC PLANS OF THE COMPANY AND THE THEN PREVAILING INDUSTRIAL ENVIRONMENTAL OUTLOOK
STEP 2 TPM ANALYSIS

TRENDS DISCOVERY IN -TOTAL PRODUCTIVITY
-BREAK EVEN POINT OF TOTAL PRODUCTIVITY -HUMAN PRODUCTIVITY -MATERIALS PRODUCTIVITY -FIXED CAPITAL PRODUCTIVITY -WORKING CAPITAL PRODUCTIVITY -ENERGY PRODUCTIVITY -OTHER EXPENSES PRODUCTIVITY
STEP 3 MANAGEMENT GOALS

FOUR CRITERIA FOR A GOAL TO QUALIFY AS A MGT GOAL EVERY MGT GOAL MUST -ACHIEVE MISSION STATEMENT -BE VERY SPECIFIC -BE TIME BASED -BE VERIFIABLE IN HMT THE GOALS ESTABLISHED WERE -INCREASE HUMAN PRODUCTIVITY BY 7% PER YEAR -INCREASE OTHER EXPENSE PRODUCTIVITY BY 3.5% YRLY -REDUCE INVENTORIES BY 5% INORDER TO INCREASE WORKING CAP ITAL PRODUCTIVITY
STEP 4 FISHBONE ANALYSIS

WELL ESTABLISHED TOOL TO ANALYZE THE CAUSES FOR A PROBLEM FISHBONE ANALYSIS DONE FOR EACH OF MGT GOALS IN STEP 3 IF A COMPANY CAREFULLY ANALYZES ALL TASKS , PROCESSES AND TECHNIQUES NEEDED TO ACCOMPLISH EACH MGT GOAL , IT WILL BE BETTER EQUIPPED TO ALLOCATE RESOURCES TOGOALS THAT WOULD ATTAIN ITS MISSION
Cause-and-Effect Diagram for Manufacturing
Exhibit S6.8
STEP 5 ACTION PLANS

ACTION PLAN IS DEVELOPED FOR EACH MGT GOAL ACION PLAN INCLUDES DETAILS OF TASKS ,START AND END DATES,PEOPLE RESPONSIBLE FOR EACH TASK ACTION PLAN IS ANOTHER WAY TO CREATE A CAREFUL THOUGHT OUT PLAN OF ACTION TO ACHIEVE A MGT GOAL TOOL TO ASSIGN PEOPLE TO TASKS WHICH WHEN ACCOMPLISHED WILL ACHIEVE MGT GOALS WHICH IN TURN WILL AID ACHIEVEMENT OF VISION AND MISSION ACTION PLAN HELPS IDENTIFY BOTTLENECKS
STEP 6 PRODUCTIVITY QUALITY TEAM TRAINING

TRG IS PROVIDED TO ALL EMPLOYEES SO THAT THEY HAVE THE REQUISITE TOOLS TO ACCOMPLISH TASKS IN THE ACTION PLANS IN AN EFFECTIVE AND EFFICIENT MANNER TRAINING FOCUSES ON PROBLEM SOLVING
STEP 7 IMPLEMENTATION OF ACTION PLANS

IMPLEMENTATION BECOMES MORE SYSTEMATIC WITH DETAILED ACTION PLAN ACTION PLANS ARE CONSTANTLY REVISED AS THE TASKS PROGRESS THER IS A CONTINUOUS FEEDBACK CONTROL WHICH IS MONITORED CAREFULLY
STEP 8 MGT GOALS ACHIEVED

PROGRESS TOWARDS ACHIEVEMENT OF GOALS IN STEP 3 ASSESSED ON A PERIODIC BASIS SAY QUARTERLY IF A GOAL IS NOT ACHIEVED THE ACTION PLAN RELATED TO THAT GOAL NEEDS TO BE REVIEWED AND CORRECTIVE ACTION INITIATED WHICH INCLUDES DOWNSIZING OF GOAL IF ACHIEVEMENT IS NOT POSSIBLE DUE TO INTERNAL AND EXTERNAL ENVIRONMENTAL CAUSES
STEP 9 TOTAL PRODUCTIVITY GAIN SHARING

BRAINSTORMING APPROACH BASED ON TOTAL PRODUCTIVITY STEP PROVIDES FOR A TANGIBLE MONETARY INCENTIVE TO ACHIEVE THE MAXIMUM POSSIBLE POTENTIAL OF TPM REASONS FOR INCLUDING GAIN SHARING IN TPM INCLUDE -NEED TO SUSTAIN MOTIVATION IN NEW CONCEPTS. INTANGIBLE MOTIVATION IS A NECCESARY CONDITION NOT A SUFFICIENT ONE TO SUSTAIN POSITIVE MOTIVATION -IT IS FAIR TO SHARE GAINS WITH RESPONSIBLE FOR IT -RATE OF NEW HIRING CAN BE REDUCED DRAMATICALLY
STEP 10 NEW GOALS

SET NEW GOALS WHEN ALL PREVIOUS GOALS HAVE BEEN ACHIEVED SET ANNUAL GOALS. THIS LOOKS OKAY BUT IN A DYNAMICALLY CHANGING SITUATION ANNUAL REVIEW OF GOALS MAY BE A BIT TOO LATE. NEED TO REVIEW EITHER ON A QTRLY BASIS OR WHENEVER
HOW PRODUCTIVITY CAN BE IMPROVED

INCREASING OUTPUT WITH SAME INPUT INCREASING OUTPUT MORE THAN THE INCREASED INPUT DECREASING INPUT FOR SAME OUTPUT INCREASING OUTPUT WITH DECREASED INPUT
BENEFITS OF TOTAL PRODUCTIVITY MGT

CUSTOMER RESPONSIVENESS QUALITY COMPETITIVENESS TOTAL COST COMPETITIVENESS TEAM BUILDING AND ACCOUNTABILITY TECHNOLOGY PLANNING INVESTMENT ANALYSIS ACQUISITION AND MERGER PLANNING PROFIT TARGETTING
WASTE MANAGEMENT
Introductory Quotation
Waste is anything other than the minimum amount of equipment, materials, parts, space, and workers time, which are absolutely essential to add value to the product.
Shoichiro Toyoda President, Toyota
1995 Corel Corp.
What is WASTE?
Any Activity that DOES NOT increase the Market Form or Function of the Product or Service based on the Critical Customer Requirements.
These are things the customer is NOT willing to pay for.
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DEFINITION OF WASTE
THE OXFORD DICTIONARY DEFINES WASTE AS UNPURPOSEFUL OR EXTRAVAGANT ACTIVITY WHICH RESULTS IN UNPRODUCTIVE END RESULTS WASTE IS A PRODUCT,ACTIVITY OR SERVICE FOR WHICH AN EXTERNAL CUSTOMER IS UNWILLING TO PAY FOR CASE OF SECURITY CESS IN RAILWAYS WASTE IS ONLY NUISANCE VALUE TO CUSTOMER
WASTE MANAGEMENT
WASTE EXISTS EVERYWHERE FROM INDUSTRY TO HUMAN ACTIVITIES IN ANY PROCESS WASTE ACCOUNTS FOR A VERY LARGE AMOUNT OF NON VALUE ADD ACTIVITY MGT NEEDS TO CONTROL ACTIVITIES BETTER THRU TIGHTER CONTROL WASTE MGT IMPROVES COSTS AND PRODUCTIVITY AND REDUCES CYCLE TIMES
MUDA MURI MURA

3 JAPANESE TERMS USED BY TOYOTA TO SIGNIFY DIFFERENT TYPES OF WASTES MUDA IS WASTE. TWO TYPES OF WASTE TYPE 1 MUDA UNAVOIDABLE WASTE OR FORCED SCRAP(ESSENTIAL NVA);TYPE 2 OR AVOIDABLE WASTE MURA IS WASTE OF INCONSISTENCY OR UNEVENNESS OF FLOW.UNEVENNESS IN PRODUCTION FORCES PROCESSES TO DEAL WITH SPIKES IN DEMAND AND HAS IDLENESS IN SLACK PERIODS 64 MURI IS OVERBURDENING OF SYSTEM
Eliminate Waste
Muda anything that does not add value for the customer
Products in storage Products being inspected Products waiting in queues Defective products Unnecessary movement of materials or workers - 2 TYPES OF WASTES TYPE 1 WASTE WHICH IS
ESSENTIAL NON VALUE ADD ACTIVITIES AND TYPE 2 WASTE WHICH IS ELIMINATABLE eg INSPECTION
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Idle machine run Waiting for parts Counting parts Overproduction Moving parts over long distances Storing inventory Looking for tools Machine breakdown 66 Rework
Examples of Waste
Common Causes of Waste

Layout (distance) Long setup time Incapable processes Poor maintenance Poor work methods Lack of training Inconsistent performance measures Ineffective production planning Lack of workplace organization Poor supply quality/reliability
Common Causes of Waste

Excess Manning
Poor layout and material presentation Rework and extra processes Inconsistent / inefficient work methods
Excess Downtime
Tooling condition Unreliable equipment Long changeovers Incapable process
Defectives - Rework or Replace

Incapable processes or process not compatible with customer expectations or design spec (design for mfg) Tooling condition Operator methods and errors
Where is the Waste?

Defects incomplete or incorrect information Overproduction releasing work before next process can work on them, unbalanced work loads
Waiting unbalanced work loads, slow system response, incomplete information, approvals
Not Utilizing Employees old guard thinking, politics, high turnover, low investment in training
Transportation poor layout, poor flow

Inventory large batches, complexity to complete task Motion poor organization, no standard work Excess Processing excess communication, lack of communication, unnecessary approvals, customer requirements are not clearly understood
All processes have waste.

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Types of Waste (Muda) in Toyota production system

.
Overproduction Waiting Transportation Inventory Motion Overprocessing Defects

9-70
PRODUCING DEFECTS
DEFECTS IN PRODUCT / SERVICE ARE MAJOR SOURCE OF WASTE COSTS OF WASTE INCLUDE WARRANTY COSTS,ATTENDING COMPLAINTS AS WELL AS REWORK,INSPECTION CASE OF DELL COMPUTERS PRODUCT DEFECTS TO BE ELIMINATED BY QUALITY ASSURANCE IN DESIGN ELIMINATING NEED TO INSPECT OR REWORK DEFECTS INCREASE PRODUCTION COSTS AND LEAD TIME OF MANUFACTURE DEFECTS DUE TO WRONG OPERATING PROCEDURES,VARIATIONS IN OPERATIONS RESULTING IN M/C WEAR,DEFECTIVE RAW MATRL,OPERATOR ERROR etc
TRANSPORTATION AND MATERIAL HANDLING

ITEMS IN MFG MOVED FROM STATION TO STATION TRANSPORTATION WASTES TIME AND IN THE CASE OF HUMAN BEINGS WHO MAY HAVE TO MOVE FROM STATION TO STATION TO DO WORK IT IS FATIGUING AND CAUSES DECLINE IN PRODUCTIVITY AND INCREASE IN ERROR RATES OBJECTIVE IS TO MINIMIZE HUMAN EFFORT IN TRANSPORTATION AND MATERIAL HANDLING BY HAVING CONVEYOR BELTS CASE STUDY OF AUTOMOBILE ASSEMBLY LINE WHERE AUTOMOBILE MOVES ON THE CONVEYOR BELT AND MAN IS STATIONARY.TIME REDUCED FROM 12HRS/CAR TO 1 HR/ASSEMBLY
INVENTORY
INVENTORY AS PER TOYOTA IS ONE OF THE SEVEN SINS INVENTORY REPRESENTS ITEMS WAITING FOR SOMETHING TO HAPPEN (JUST IN CASE) INVENTORY IS CARRIED TO PREEMPT DELAYS IN DELIVERY OF PROCESS INPUT OR TO PROVIDE FOR CUSHION STOCKS TO TAKE CARE OF MFG REWORK/SCRAP (SOME CUSHIONS ACCOUNT FOR AS MUCH AS 5% OF RAW MATERIAL) WASTES ASSOCIATED WITH HOLDING COSTS, DEPRECIATION, EXPIRY DATES , DETERIORATION. PILFERAGE ETC JUST IN TIME IS THE REMEDY FOR EFFECTING ZERO INVENTORY
OVERPRODUCTION
EXCESS PRODUCTION BECAUSE OF WRONG SALES FORECASTS OR ATTEMPT TO KEEP FACILITIES RUNNING MFG OF EXCESS PRODUCTION IS WASTE CASE OF ALL SALES OF READY MADE GARMENTS WASTE FROM OVERPRODUCTION IS REFLECTED IN UNSOLD STOCKS WHICH ADD TO FINISHED GOODS INVENTORY
WAITING
WASTE OF WAITING IS EASY TO IDENTIFY WAITING IS A RESULT OF UNBALANCED PROCESS SEQUENCE OR BREAKDOWN IN BOTTLENECK PROCESS INCLUDES WAITING FOR ORDERS, RAW MATERIAL, POWER, SPARES, LABOUR OR EVEN FUNDS TO PROCURE RESOURCES WAITING ALSO INCLUDES ITEMS FROM PRECEDING PROCESSES EXAMPLE OF PILE UP OF WIP OR PERISHABLES AWAITING CUSTOMS CLEARANCE
WAITING
WAITING MINIMIZED BY BUSINESS PROCESS ACTIVITY IMPROVEMENT OR MINIMIZATION OF LEAD TIME TO PROCURE THROUGH VENDOR MANAGED INVENTORY OR OTHER INITIATIVES WAITING ALSO MINIMIZED BY GOOD MAINTENANCE PRACTICES SUCH AS CBM RESULTING IN MAXIMIZED EFFECTIVENESS
PROCESSING
PROCESS MAY CONTAIN ACTIVITIES WHICH ARE INEFFECTIVE OR UNNECCESARY PROCESSING WASTE CAN BE ELIMINATED BY MINIMIZING MOTION REQUIRED TO PERFORM WORK ACTIVITY ANALYSIS DONE TO DETERMINE PROCESS UTILISATION TIME AND THEREAFTER PROCESS IMPROVEMENT DONE TO ELIMINATE DELAYS AND NON VALUE ADDED ACTIVITIES
MOTION
BEING IN MOTION IS INCORRECTLY CONNOTED TO BE AT WORK MOTION AND WORK ARE NOT THE SAME WORK IS CONSIDERED A PARTICULAR KIND OF MOTION THAT ADDS VALUE AN APPARENTLY BUSY PERSON MAY ACTUALLY PRODUCE VERY LITTLE WORK INHERENT HANDICAP AT RIGHT HANDED WORKPLACE FOR LEFTHANDERS MOTION UNREQD TO DO WORK IS WASTE EXCESSIVE MOTION CAUSES FATIGUE AND LOSS OF PRODUCTIVITY AND INCREASE OF WASTE CASE OF BEARING LIFETIME INVERSELY PROPORTIONAL TO RPM
ROOT CAUSE OF TOYOTA WASTES

USAGE OF 5 WHY ANALYSIS DEFECTS -INADEQUATE DESIGN POOR MATERIAL -WRONG PROCESS SPECIFICATIONS -OPERATOR ERROR -INADEQUATE TESTING TRANSPORTATION -WAIT TIME TO TRAVEL -LAYOUT INVENTORY -OBSOLETE STOCKS JUST IN CASE WRONG FORECST CUSTOMER CANCELLATIONS MKT SLUMP OVERPRODUCTION -WRONG FORECAST
ROOT CAUSE OF TOYOTA WASTES

WAIT TIME -IMBALANCE IN PROCESS THROUGHPUT OR PROCESS BREAKDOWN -POOR SCHEDULING -INADEQUATE LABOUR SCHEDULING MOTION -EXCESS MOTIONEXCESS PAPER DISTRIBUTION PROCESSING -INEFFECTIVE OR NON VALUE ADDED STEPS
REMEDIES FOR TOYOTA WASTES

WASTE
OVERPRODUCTION WAITING TRANSPORTATION WRONG PROCESSING EXTRA INVENTORY EXTRA MOTION DEFECTS
REMEDY
JIT/PULL PRODUCTION PROCESS ACTIVITY STUDY MOTION STUDY METHOD STUDY JUST IN TIME MOTION STUDY ROOT CAUSE ANALYSIS AND FMECA
OFFICE WASTES
ERRORS IN DOCUMENTS DOING UNREQUIRED WORK NOT REQUESTED PROCESS OF GETTING APPROVALS AND NEEDLESS LEVELS OF APPROVALS BACKLOG OF WORK UNREQUIRED STATIONERY FILES PAPERS AT WORKPLACE UNCLEAR JOB DESCRIPTIONS RESULTING IN UNDEFINED OUTCOMES EXCESS DEBIT CREDIT NOTES DUE TO ERRONEOUS PO INVOICE OBSOLETE DATABASES TYPOGRAPHICAL ERRORS UNREQUIRED COMMUNICATION
TOTAL WASTE REDUCTION

WASTE MAY EXIST IN PROCEDURES POLICIES SYSTEMS AND IS DIFFICULT TO IDENTIFY HIDDEN WASTES AUTOMATION IS NOT THE SOLUTION TO WASTE NEED OF THE HOUR IS TO IDENTIFY REAL WASTES THAT AFFECT BOTTOM LINES WASTE MGT SHOULD BE A CONTINUOUS DRIVE ON THE GUIDELINES OF TQM PERIODIC REVIEW OF POLICIES,PROCEDURES,PROCESSES TO ENSURE PROCESS IMPROVEMENT AND WASTE REDUCTION
LEVELS OF WASTE
FOUR LEVELS OF WASTE -BUSINESS LEVEL WASTES -PLANT LEVEL WASTES -PROCESS AND METHOD WASTES -OPERATING LEVEL WASTES
LEVEL 1 BUSINESS LEVEL WASTE

LONG TERM AND SHORT TERM GOALS NOT COMMENSURATE WITH CAPABILITIES AND CAPACITY SHORT TERM GOALS NOT ALIGNED WITH LONG TERM STRATEGIC GOALS WHICH ENABLE THE REALISATION OF VISION STRATEGIC OBJECTIVES OF EACH FUNCTION NOT IN UNISON WITH CORPORATE OBJECTIVES LACK OF COORDINATION AND UNDERSTANDING WITH STAKEHOLDERS LOP SIDED FINANCING INSTAL OF EXTRA CAPACITY W/O MAXIMISATION OF CURRENT STRATEGIC DIVERSIFICATION IN AREAS WITHOUT OPPORTUNITIES AND CORE COMPETENCE INEFFICIENT PRODUCT LIFECYCLE PLANNING AND MGT
LEVEL 2 PLANT LEVEL WASTE

POOR PPC NOT BASED ON MARKET DYNAMICS HIGH INVENTORIES LOW PLANT EFFECTIVENESS AND UNPROFITABLE OPERATIONS HIGH OVERTIME PAYMENTS BUT LOW EMPLOYEE PRODUCTIVITY
LEVEL 3 PROCESS AND METHODS LEVEL WASTE

INCORRECT OR INEFFECTIVE PROCESS METHODS BORNE OUT OF LACK OF SKILLS OR ATTITUDE NEED TO MONITOR AND DO PERIODIC METHOD STUDIES TO MAXIMIZE PROCESS THROUGHPUT WITH MINIMUM EFFORT
LEVEL 4 OPERATIVE LEVEL WASTE

POOR OPERATIVE CONTROLS RESULTING IN HIGH MFG COSTS HIGH REWORK/REJECT CONTENT eg .04% value of sales realized thru sale of scrap in 2008-09 and 0.16% value of sales realized in 2009-10 UNDULY HIGH REACTIVE MAINTENANCE % ie 17.5% of maintenance time against 2% world class (includes 7% breakdown)
Root cause of waste

Defects
Inadequate Design Inadequate Testing - Poor Matrl - Wrong Proc - Oper Error
Over Production
Over enthusiastic incentive - Wrong Forecast
Excess Inventory
Obsolete Stocks - Wrong Forecast - Customer amendments/cancellation Poor Quality - Market Condition
Unrequired Motions
Over use of paper/distribution - Excess Walking - Excess Motions
Transportation
Layout - wait time to travel
Wait Time
Poor Scheduling - Imbalance in prodn line - Inadequate labor resource
Root cause of waste

Process
Wrong operations or poor material leading to rework or reject Poor process control Poor operating specifications Untrained or de motivated operators
NON VALUE ADDED ACTIVITIES
BUSINESS PROCESSES
EVERYTHING WE DO IS A PROCESS AND CONSISTS OF INPUTS PROCESSING AND OUTPUT PROCESS TAKES INPUT FROM SUPPLIERS,ADDS VALUE AND DELIVERS OUTPUT TO CUSTOMER CUSTOMER COULD BE INTERNAL OR EXTERNAL AND SUPPLIER COULD BE THE SAME AS CUSTOMER PROCESSES ARE SET OF LOGICALLY RELATED ACTIVITIES LINKED BY RULES WHICH COMBINE TO DELIVER VALUE TO CUSTOMERS ACROSS FUNCTIONAL LINES . THEY USE PREDETERMINED LOGIC RULES TO PROCESS INPUTS PROCESSES USE INPUTS FROM SUPPLIERS SUCH AS INFORMATION SKILLS TRAINING PEOPLE,EQUIPMENT,MATERIAL,PROCEDURES METHODS SPECIFICATIONS SERVICES KNOWLEDGE AND VOICE OF CUSTOMER PROCESS PROCESSES INPUTS AS PER THE BUSINESS RULES AND ACTIVITY DEPENDENCIES PROCESSES OUTPUT PRODUCTS SERVICES INFORMATION TO CUSTOMERS OUTPUTS RESULT IN OUTCOMES WHICH ARE MEASURES OUTCOMES ARE COMPARED WITH TARGETS AND RESULT IN
PROCESS MECHANICS
INPUTS
PROCESS OUTPUTS
MATERIALS PROCEDURES METHODS DATA PEOPLE WITH SKILLS KNOWLEDGE MANAGEMENT TRAINING EQUIPMENT FINANCE
INPUTS
BUSINESS RULES CONTROLS ACTIVITIES DEPENDENCIES CONSTRAINTS CAPABILITY
OUTPUTS
PRODUCTS SERVICES INFO WASTE
CUSTOMER
VOICE OF PROCESS
VOICE OF THE CUSTOMER
ACTIVITIES IN AN ORGANIZATION
EVERY THING WE DO IN A COMPANY IS A PART OF A LARGER PROCESS WHICH IS EXECUTED TO ACHIEVE BUSINESS RESULTS PROCESS COMPRISES OF SUB PROCESSES SUB PROCESS IS DIDIDED INTO ACTIVITIES WHICH CAN BE // OR IN SEQUENCE ACTIVITIES CAN BE DIVIDED INTO INDIVISIBLE TASKS
PROCESS DECOMPOSITION INTO ACTIVITIES

ORDER TO CASH
ORDER PROCESSING
NET MRP MFG WO
PLAN TO PRODUCE
DELIVER INDENT TO PR RECEIVE CASH OPTIONAL PO TO TENDER TENDER TO PO OR PR TO PO DELY TO ACCEPT ACCEPT TO INVOICE INVOICE TO PAY
PROCURE TO PAY
ACTIVITIES AWARD TO SUPPLIER
DESPATCH PO
APPROVE PO
MULTI LEVEL APPROVAL
WRITE PROCURE DETAILS WITH QTY, RATE, DELVY SCHEDULE,ETC
VALUE AND NON VALUE ADD ACTIVITIES

MANY ACTIVITIES PERFORMED WHILE WORKING AND ARE THE BUSINESS OUTCOMES OF PROCESSES VALUE ADD ACTIVITIES ARE THOSE WHICH CUSTOMER IS WILLING TO PAY FOR NON VALUE ADD ACTIVITIES ARE THOSE ACTIVITIES WHICH THE CUSTOMER WILL NOT PAY FOR NON VALUE ADD ACTIVITIES MAY BE ESSENTIAL eg SAFETY OR NON ESSENTIAL PROCESS IMPROVEMENT NEEDS TO BE DONE ON ESSENTIAL ACTIVITIES TO REDUCE COSTS,TIME AND RESOURCES NON VALUE ADD ACTIVITIES NEED TO BE EITHER ELIMINATED OR MINIMISED AS THESE ACTIVITIES ONLY ADD TO THE COSTS
VALUE ADDED ASSESSMENT
ACTIVITY
REQD TO PRODUC E O/P
CONTRI BUTES TO CUST REQMT
N
REQD TO PRODUC E O/P
Y
REAL VALUE ADD
Y
ESSENTIAL NON VALUE ADD NON VALUE ADD
ACTIVITY MAPPING AS-IS INDENT TO PURCHASE
ACTIVITY MAPPING TO BE TO BE INDENT TO PURCHASE
ACTIVITY MAPPING TO BE INDENT TO PURCHASE
PROCESS WASTE
WASTE MANAGEMENT
WASTE EXISTS EVERYWHERE FROM INDUSTRY TO HUMAN ACTIVITIES IN ANY PROCESS WASTE ACCOUNTS FOR A VERY LARGE AMOUNT OF NON VALUE ADD ACTIVITY MGT NEEDS TO CONTROL ACTIVITIES BETTER THRU TIGHTER CONTROL WASTE MGT IMPROVES COSTS AND PRODUCTIVITY AND REDUCES CYCLE TIMES
LEVELS OF WASTE
FOUR LEVELS OF WASTE -BUSINESS LEVEL WASTES -PLANT LEVEL WASTES -PROCESS AND METHOD WASTES -OPERATING LEVEL WASTES
LEVELS OF WASTE
FOUR LEVELS OF WASTE: -LEVEL 1 refers to business related wastes. It includes wastes due to cross functional issues, poor communication and coordination between vendors, customers and even poor investment decisions -LEVEL 2 refers to plant level wastes. It includes faulty production planning and control, poor layout resulting in un required movement and WIP It includes poor m/c capability resulting in rework, scrap and rejection. It also includes poor maintenance policies
LEVELS OF WASTE
FOUR LEVELS OF WASTE (CONTD): -LEVEL 3 refers to process or method related work and includes issues like excess time spent or setup activities adjustment and alignment. It covers poor workplace design and unsafe methods -LEVEL 4 refers to wastes within processes. Includes issues such as improper postures at workplace and lack of standard operating procedures

Faulty performance measure Poor business policies and short sightedness at top level Poor communication and coordination between vendors and customers Too much emphasis on utilization of resources Excess production Poor product and process design

LONG TERM AND SHORT TERM GOALS NOT COMMENSURATE WITH CAPABILITIES AND CAPACITY SHORT TERM GOALS NOT ALIGNED WITH LONG TERM STRATEGIC GOALS WHICH ENABLE THE REALISATION OF VISION STRATEGIC OBJECTIVES OF EACH FUNCTION NOT IN UNISON WITH CORPORATE OBJECTIVES LACK OF COORDINATION AND UNDERSTANDING WITH STAKEHOLDERS LOP SIDED FINANCING INSTAL OF EXTRA CAPACITY W/O MAXIMISATION OF CURRENT STRATEGIC DIVERSIFICATION IN AREAS WITHOUT OPPORTUNITIES AND CORE COMPETENCE INEFFICIENT PRODUCT LIFECYCLE PLANNING AND MGT
LEVEL 2-PLANT LEVEL WASTES

Play safe tendency Poor production planning and control Poor layout resulting in back tracking and excessive traveling WIP inventory Batch size constraints
LEVEL 2 PLANT LEVEL WASTE

POOR PPC NOT BASED ON MARKET DYNAMICS HIGH INVENTORIES LOW PLANT EFFECTIVENESS AND UNPROFITABLE OPERATIONS HIGH OVERTIME PAYMENTS BUT LOW EMPLOYEE PRODUCTIVITY
LEVEL 3-PROCESS AND METHOD WASTES

Poor sequencing of machines and operations Long changeover times Poor work place design Tendency of temporary storage Incapable and poorly maintained equipment Unsafe methods
LEVEL 3 PROCESS AND METHODS LEVEL WASTE

INCORRECT OR INEFFECTIVE PROCESS METHODS BORNE OUT OF LACK OF SKILLS OR ATTITUDE NEED TO MONITOR AND DO PERIODIC METHOD STUDIES TO MAXIMIZE PROCESS THROUGHPUT WITH MINIMUM EFFORT
LEVEL 4-MACHINE/OPERATOR LEVEL WASTES

Poor housekeeping Excess bending and fatigue Lack of operator training Operator has to frequently fetch material for production
LEVEL 4 OPERATIVE LEVEL WASTE

POOR OPERATIVE CONTROLS RESULTING IN HIGH MFG COSTS HIGH REWORK/REJECT CONTENT UNDULY HIGH REACTIVE MAINTENANCE %
OFFICE WASTES
ERRORS IN DOCUMENTS DOING UNREQUIRED WORK NOT REQUESTED PROCESS OF GETTING APPROVALS AND NEEDLESS LEVELS OF APPROVALS BACKLOG OF WORK UNREQUIRED STATIONERY FILES PAPERS AT WORKPLACE UNCLEAR JOB DESCRIPTIONS RESULTING IN UNDEFINED OUTCOMES EXCESS DEBIT CREDIT NOTES DUE TO ERRONEOUS PO INVOICE OBSOLETE DATABASES TYPOGRAPHICAL ERRORS UNREQUIRED COMMUNICATION

STRUCTURED APPROACH TO DEAL WITH WASTES AND DELAYS WITH VIEW TO ELIMINATION APPROACH SEPARATES WASTE(NON VALUE ADD ACTIVITIES) FROM VALUE ADDITION AND SCRUTINISES ESSENTIAL NON VALUE ADD ACTIVITIES FOR MINIMISATION OF WASTEFUL ACTIVITIES PREREQUISITE FOR TQM

WASTE MAY EXIST IN PROCEDURES POLICIES SYSTEMS AND IS DIFFICULT TO IDENTIFY HIDDEN WASTES AUTOMATION IS NOT THE SOLUTION TO WASTE NEED OF THE HOUR IS TO IDENTIFY REAL WASTES THAT AFFECT BOTTOM LINES WASTE MGT SHOULD BE A CONTINUOUS DRIVE ON THE GUIDELINES OF TQM PERIODIC REVIEW OF POLICIES,PROCEDURES,PROCESSES TO ENSURE PROCESS IMPROVEMENT AND WASTE REDUCTION

DRASTICALLY IMPROVES QLTY, PRODUCTIVITY,FLEXIBILITY AND SAFETY REDUCES CYCLE TIME AND IMPROVES RESPONSIVENESS MAXIMIZES UTILIZATION OF ASSETS AND PROCESSES MINIMISES [PROCESS LOSSES AND COST OF NON CONFORMITY REDUCES PROCESS AND PRODUCT COST AND IMPROVES CONTRIBUTIONS IMPROVES LIQUIDITY BY FREEING MONEY TIED UP IN INVENTORIES AND OTHER WASTES
TOYOTA 7 WASTES
PRODUCTION DEFECTS TRANSPORTATION INVENTORY OVER PRODUCTION WAITING PROCESSING MOTIONS AND EFFORT
OTHER(canon) WASTES

WASTED CAPACITY WASTED ENERGY WASTE FROM LOST OPPORTUNITY WASTE FROM UNREQD EXPENSES WASTE FROM UNUTILISED TALENT WASTE FROM LOSSES DUE TO EFFICIENCY,STARTUP,IDLING, BATCH CHANGEOVER WASTE DUE TO COMMN LOSSES OR INEFFECTIVENESS OF COMMN WASTED PLANNING EFFORTS WASTED INVESTMENTS WASTED OVERSTAFFING WASTE IN DISPOSAL
ELIMINATION OF 3M
3M STAND FOR MUDA MURA AND MURI MUDA MEANS WASTES OF ALL KINDS SUCH AS REWORK,TRANSPORTATION,DELAYS MURA MEANS INCONSISTENCES SUCH AS NON CONFORMANCE TO QLTY AND STD OPERATING PROCEDURES MURI MEANS NON RATIONALITY OR DISCREPANCY ie UNSCIENTIFIC WAY OF DOING THINGS
ELIMINATION OF 3M
3M EXERCISE DONE TO -ELIMINATE WHOLE ACTIVITY -REDUCE STEPS IN ACTIVITY -CHANGE AND SIMPLIFY ACTIVITY -REDUCE THE TIME COST AND FATIGUE INVOLVED IN ACTIVITY
MUDA
MUDA MEANS WASTE WASTE IS ANY ACTIVITY THAT DOES NOT ADD VALUE SUCH ACTIVITIES CONTRIBUTE TO COST OF POOR QUALITY MUDA IS TOTAL COST OF EXTERNAL PRODUCT/SERVICE FAILURE PLUS THE COST OF PREVENTIVE MEASURES MUDA DEFINED IN TOYOTA 7 WASTES AND CANON 9 WASTES ELIMINATING MUDA REDUCES COST OF PRODN , ENHANCES PRODUCTIVITY , REDUCES CYCLE TIME , AND LEADS TO BETTER CUSTOMER SATISFACTION
8 types of Muda
1. Muda of over-production 2. Muda of waiting
3. Muda of transport
4. Muda of processing 5. Muda of inventory 6. Muda of motion 7. Muda of repair/rejects
8. Muda of Untapped Human potential
MURI
MURI MEANS UNREASONABLE OR IRRATIONAL APPROACH TO ANY OPERATION KAIZEN CHECKLIST TRIES TO LOOK INTO IMPROVEMENT BY IDENTIFYING AND ELIMINATING THE UNREASONABLENESS IN AREAS SUCH AS MANPOWER,TECHNIQUE,METHOD,TIME,FACILITIES,TOOLS, MATERIALS,INVENTORY,PLACE,PRODUCTION,,QUANTITY, QUALITY, etc MURI LOOKS FOR IRRATIONALITY WITH FOUR MAJOR APPROACHES
Muri
Muri = Physical Strain Bend to work? Push hard? Lift weight? Repeat tiring action? Wasteful walk? All this is Muri
4 APPROACHES OF MURI
THINGS OR ACTIVITIES THAT ARE EXTREMELY DIFFICULT TO DO AND AT THE MOMENT BEYOND REACH SHOULD BE IDENTIFIED AND ELIMINATED FROM ACTIVITIES DO NOT PURSUE ACTIVITIES THAT DO NOT ADD VALUE IDENTIFY AND REFINE REASONS FOR PERFORMING ACTIVITIES ELIMINATE IRRATIONAL OPERATIONS THAT CAUSE FATIGUE
MURA
INCONSISTENCY IN OPERATIONS DEVIATION FROM STANDARDS LEADING TO INCONSISTENCY MURA CALLS FOR MINIMUM DEVIATION BETWEEN BEST AND WORST PRODUCT BY MINIMIZING RANGE OF STD DEVIATION USING SPC
MUDA (WASTE) EXPLAINED

OVERPRODUCTION WASTE OCCURS WHEN WE PRODUCE WHAT IS UNNECESSARY, WHEN IT IS UNNECESSARY, AND IN UNNECESSARY AMOUNT. INVENTORY WASTE INVENTORY-SYMPTOM OF ILL HEALTH IN FACTORY OPERATIONS. INVENTORY AVOIDS BUT NEVER SOLVES PROBLEMS. CONVEYANCE WASTE IS A RESULT OF POOR LAYOUT, HANDLING, OF MATERIAL ETC. DEFECT PRODUCTION WASTE HUMAN ERRORS CAUSE DEFECTS, DEFECTS ARE WASTE AND ALSO CAUSE WATE OF DETECTION, CORRECTION, CUSTOMER COMPLAINTS ETC. THEY ALSO DISRUPT NORMAL FLOW OF GOODS AND REDUCE PRODUCTIVITY PROCESS-RELATED WASTE EXAMPLES: I. DRILLING MACHINE SCREW HOLES, EVEN AFTER DESIGN HAS CHANGED THE FASTENING METHOD TO WELDING II. USING SIX SCREWS WHERE FOUR MEET THE PURPOSE. OPERATION RELATED WASTE NOT ALL OF WORKERS MOVEMENT IS WORK OR VALUE-ADDING, SUCH WASTE RESULTS FROM POOR EQUIPMENT LAYOUT OR BY POORLY PLACED PARTS, JIGS & TOOLS. IDLE TIME WASTE INCLUDES HUMAN AS WELL AS MACHINE IDLE TIME. GENERALLY IT IS THE TIME OF WAITING FOR SOMETHING.
EFFORTS REQUIRED IN WASTE MGT INITIATIVE

ELIMINATING WASTE REQUIRES A COMPANYWIDE INTEGRATED EFFORT WHICH INCLUDES ALL CORPORATE FUNCTIONS SUCH AS MARKETING,SALES,FINANCE,MANUFACTURING,R&D. INDUSTRIAL ENGG, QUALITY,CUSTOMER SERVICE, DISTRIBUTION,HR ETC WASTE AS SEEN COMPRISES OF MFG AND ADMIN WASTES ADMIN WASTES COULD BE EXCESSIVE COMMUNICATION,UNCONTROLLED DISTRIBUTION OF INFORMATION, DELAYED INFORMATION ,BREAKDOWN IN ADMIN SERVICES, ERRORS IN COMMERCIAL DOCUMENTS,WASTED SALES CALLS,UNPRODUCTIVE MEETINGS ETC COST OF I.T. /INFRASTRUCTURE DOWNTIME A MAJOR ISSUE AND NEED FOR BUSINESS CONTINUITY PLAN
Root cause of waste

Defects
Inadequate Design Inadequate Testing - Poor Matrl - Wrong Proc - Oper Error
Over Production
Over enthusiastic incentive - Wrong Forecast
Excess Inventory
Obsolete Stocks - Wrong Forecast - Customer amendments/cancellation Poor Quality - Market Condition
Unrequired Motions
Over use of paper/distribution - Excess Walking - Excess Motions
Transportation
Layout - wait time to travel
Wait Time
Poor Scheduling - Imbalance in prodn line - Inadequate labor resource
Root cause of waste

Process
Wrong operations or poor material leading to rework or reject Poor process control Poor operating specifications Untrained or de motivated operators
VALUE ENGINEERING
DEFINITION OF VALUE
VALUE IS A WORD USED WITHOUT UNDERSTANDING THE MEANING DIFFERENT DEPTS OF SAME COMPANY HAVE VARIED MEANING DESIGNER RELATES VALUE WITH RELIABILITY MFG RELATES WITH COST OF MFG PURCHASE RELATES WITH COST OF RM SALES RELATES TO THE PRICE CUSTOMER IS WILLING TO PAY
DEFINITION OF VALUE

VALUE IS THE RELATIONSHIP BETWEEN COST AND QLTY VALUE = QUALITY/COST VALUE IS PLACED FOR VARIOUS ATTRIBUTES MORE POPULARLY KNOWN AS FUNCTIONS OF A PRODUCT TWO TYPES OF FUNCTIONS -PRIMARY SECONDARY PRIMARY FUNCTIONS ARE THOSE ATTRIBUTES FOR WHICH A PRODUCT IS PURCHASED AND MEANT TO BE USED eg THE PRIMARY FUNCTION OF A CAR IS TO SAFELY TRANSPORT PEOPLE BETWEEN TWO POINTS WITH FUEL ECONOMY SECONDARY FUNCTIONS ARE THOSE ATTRIBUTES WHICH ARE NOT PRIMARY FUNCTIONS BUT WHICH PEOPLE WISH TO SEE AS ATTRIBUTES OR FUNCTIONSS IN A PRODUCT eg IN A CAR WE ALSO WISH TO HAVE A/C AND OTHER ACCESSORIES
DEFINITION OF VALUE ANALYSIS/ENGINEERING

VA/VE DEFINED AS TECHNIQUE WHICH EXAMINES ALL FACETS OF FUNCTION AND COST OF A PRODUCT IN ORDER TO DETERMINE WHETHER CERTAIN PRODUCT COSTS CAN BE REDUCED OR ELIMINATED WHILE RETAINING ALL FEATURES AND QLTY SOCIETY OF AMERICAN VALUE ENGRS DEFINES VALUE ANALYSIS AS THE SYSTEMATIC APPLICATION OF RECOGNISED TECHNIQUES WHICH IDENTIFY FUNCTION OF PRODUCT/SERVICE,ESTABLISH A MONETARY VALUE FOR THE FUNCTION AND PROVIDE FUNCTION RELIABILITY AT LOWEST COST VALUE ANALYSIS IS A FUNCTIONALLY IORIENTED METHOD FOR IMPROVING PRODUCT VALUE BY RELATING ELEMENTS OF PRODUCT WORTH TO ELEMENTS OF COST OBJECTIVE OF VA IS TO IMPROVE VALUE BY REDUCING COSTS WITHOUT SACRIFING QLTY AND RELIABILITY VE IS A COST PREVENTIVEE TECHNIQUE WHICH ELIMINATES UNREQD COSTS FROM BEING BUILT INTO PRODUCT
VALUE ENGG/ANALYSIS
ENGINEERING IS A PROCESS OF ASSESSMENT OF A PRODUCT DURING DESIGN PHASE ANALYSIS IS ASSESSMENT OF A PRODUCT DURING USAGE OBJECTIVE IS TO ELIMINATE UNREQD FEATURES AND FUNCTIONS IN PRODUCT DESIGN MOST ACTIVITIES PERFORMED IN ANALYSIS PHASE VA TEAM ASSIGNS A VALUE TO EACH FUNCTION AND FINDS COSTS TO DELIVER FUNCTION AND RATIO OF VALUE TO COST IS CALCULATED RATIO IMPROVED BY REDUCING COST OF ITEM OR INCREASING WORTH
VALUE ENGG/ANALYSIS
VALUE ANALYSIS IS A MGT TECHNIQUE FOR REDUCING MFG COSTS AND ///LY IMPROVING QLTY AND RELIABILITY OF PRODUCT VALUE ENGG IS USED TO COVER THE INITIAL DESIGN STAGE VALUE MEANS DIFFERENT THINGS TO DIFFERENT PEOPLE AT DIFFERENT TIME VALUE OF AN ITEM DETERMINED ON THE BASIS OF VARIOUS ASPECTS:
FOUR WAYS TO INCREASING VALUE OF FUNCTION

DECREASE COST AND MAINTAIN PERFORMANCE LEVEL eg NANO INCREASE PERFORMANCE AT SAME COST eg TOOTHPASTE/AERATED DRINKS DECREASE COST AND ENHANCE PERFORMANCE eg PC HARDWARE INCREASE BOTH COST AND PERFORMANCE BUT PERFORMANCE INCREASE > COST INCREASE eg BUFFETS
TYPES OF VALUE
COST VALUE IS SUM OF ALL COSTS INCURRED IN MFG OF PRODUCT eg MATRL LABOUR TOOLING O/H USE VALUE IS THE COST INCURRED TO MAKE PRODUCT FUNCTIONAL eg QLTY COSTS INCURRED TO ENSURE A/C COOLS TO REQD TEMPERATURE ESTEEM VALUE IS THE COST INCLUDED INTO PRODUCT TO ENHANCE CUSTOMER APPEAL Eg IN SOME CASES THE MOTOR CAR ESTEEM VALUE > USE VALUE IN TERMS OF FUEL CONSUMPTION LIKE IN THE CASE OF A MERCEDES BENZ WHICH GIVES ONLY 6 KM/LTR AGAINST THE AVERAGE 1518KM/LTR IN OTHER BRANDED CARS EXCHANGE VALUE IS THE VALUE OF PROPERTIES WHICH ENABLES AN ITEM TO BE EXCHANGED FOR SOMETHING ELSE .EXCHANGE VALUE IS GENERALLY RESALE VALUE. Eg REAL ESTATE EXCHANGE VALUE IS INFLATED BY 20% EVERY YEAR PLACE VALUE IS VALUE OF PROPERTY/EQUIPMENT WHICH VARIES IN PRICE WRT LOCATION eg IN MUMBAI REAL ESTATE IS MORE EXPENSIVE IN WESTERN SUBURBS THAN IN EAST TIME VALUE IS PROPERTY OF PRODUCT/SERVICE RENDERED AT THE RIGHT TIME eg THE TIMING OF AN EMERGENCY OPERATION IS CRITICAL FOR SURVIVAL OF THE PATIENT
VALUE ENGG/ANALYSIS
ECONOMIC WORTH = COST VALUE + EXCHANGE VALUE + USE VALUE + ESTEEM VALUE + PLACE VALUE + TIME VALUE REAL WORTH = ECONOMIC WORTH/COST VALUE REAL WORTH = WORTH/LIFE CYCLE COST FOCUS OF VE TO INCREASE REAL VALUE OF PRODUCT PROCESS OR SERVICE VE/VA GENERALLY RESULTS IN COST REDUCTION
QUESTIONS IN VALUE ANALYSIS

CAN WE DO WITHOUT IT DOES IT DO MORE THAN REQD DOES IT COST MORE THAN IT IS WORTH CAN SOMETHING ELSE SUBSTITUTE IT CAN TWO PARTS BE COMBINED OR CAN ONE COMPONENT BE MADE INTO TWO CAN IT BE MADE IN A LESS COSTLY METHOD WITH LESS COSTLY MATRL CAN IT BE MADE CHEAPER BETTER OR FASTER WHAT NEW PROCESSES CAN WE USE
QUESTIONS IN VALUE ANALYSIS

CAN AN ALTERNATIVE MATRL BE USED CAN ANY DIMENSIONS BR REDUCED TO USE LESS MATRL CAN AMOUNT OF WASTE BE REDUCED CAN PARTS BE STANDARDISED CAN TWO PARTS BE COMBINED IS BUYING CHEAPER THAN MAKING WHAT IS THE COST OF ADHERING TO SPECS WHAT NEW PROCESSES CAN BE USED
WAYS TO INCREASE VALUE BY VE

REDUCE FUNCTIONS WITH CUT CORNERS EXERCISE KEEP FUNCTIONS UNCHANGED BUT REDUCE COSTS INCREASE FUNCTIONS BUT RETAIN COSTS INCREASE FUNCTIONS MORE THAN COST INCREASE
USES OF VALUE ENGINEERING

COST PREVENTION AND ELIMINATION TECHNIQUE TO REDUCE COST OF PRODUCT ENABLES BETTER UNDERSTANDING OF EMPL JOBS BALANCES COST AND PERFORMNCE PREVENTS OVER DESIGN OF COMPONENTS MOTIVATES EMPL TO GIVE CREATIVE IDEAS INCREASES PROFITS AND DEFLATES COSTS HELPS SATISFY CUSTOMERS WITH PRODUCTS
PRINCIPLES OF VALUE ANALYSIS

DO NOT USE A PART THAT DOES NOT CONTRIBUTE TO THE VALUE OF THE PRODUCT DO NOT USE A PART WHOSE COST IS NOT PROPORTIONAL TO ITS USEFULNESS DO NOT PROVIDE ANY FEATURES TO THE COMPONENT OR FINISHED PRODUCT THAT ARE NOT ABSOLUTELY REQUIRED ACCEPT CHANGE IF PART OF REQD QLTY IS MADE BY A PROCESS COSTING LESS THEN USE THE ALTERNATIVE PROCESS USE STANDARDISED PARTS WHEREVER POSSIBLE USE PROPER MFG METHODS TAKING INTO ACCOUNT THE QUANTITIES COST OF COMPONENT USED SHOULD BE PROPORTIONAL TO ITS FUNCTION USE THE MATERIAL BEST SUITED FOR THE PURPOSE PURCHASE THE PART INSTEAD OF IN HOUSE MFG IF SUITABLE SUPPLIER CAN PROVIDE THE PART OF GOOD
WHEN TO APPLY VA
PRODUCTS ARE LOSING THEIR MKT SHARE AND THERE IS DECLINE IN SALES PRODUCTS ARE PRICED HIGHER THAN COMPETITION IN A PRICE SENSITIVE MKT OR PRODUCT COST IS > SALES PRICE OF COMPETITION NEW DESIGNS TO BE UNDERTAKEN RISING MFG COSTS
REASONS FOR UNNECCESARY COSTS

LACK OF RELEVANT INFO LEADS TO WRONG DECISIONS WHICH INCREASE COSTS WRONG BELIEFS FROM ACCEPTING OPINIONS LACK OF IDEAS
DIFFERENCE BETWEEN VE AND OTHER COST REDUCTION TECHNIQUES ORIENTED TRADITIONAL TECHNIQUES ARE POST PRODUCTION
AND CONCENTRATION IS ON THE PART OR ELEMENT IN CONTRAST TO VALUE ANALYSIS WHICH IS FUNCTION ORIENTED OTHER TECHNIQUES TRY TO REDUCE THE COST BY EXISTING METHOD WHEREAS VA NEVER CONSIDERS ANY PROCESS METHOD OR ELEMENT GRANTED AND IT ANALYSES BY FUNCTION RATHER THAN PART OR ELEMENT COST REDUCTION CAN REDUCE THE COSTS UPTO 10% WHEREAS VA CAN REDUCE COSTS UPTO 40-50% WITHOUT SACRIFICING QLTY AND PERFORMANCE VALUE ANALYSIS QUESTIONS THE VERY EXISTENCE OF PARTS OR PROCESS BY ANALYSIS OF ITS DESIGN SPECIFICATIONS, MATRLS AND PROCESS OF MFG COST REDUCTION IS COST ORIENTED AND CONCENTRATES ON FINDING THE CHEAPER COST WHEREAS VALUE ANALYSIS IS FUNCTION ORIENTED AND TRY TO PRODUCE THE PRODUCT AT LOWEST COST WITHOUT SACRIFICING QLTY AND PERFORMANCE
STRATEGIC STEPS IN VALUE ANALYSIS

DETERMINE FUNCTION AND COST OF EACH ELEMENT IN FINISHED PROD CONSIDER ALTERNATIVES THAT FULFIL FUNCTIONS SELECT BEST ALTERNATIVE WHICH INCLUDES MATRL,STANDARDISATION OF DIMENSIONS STRATEGIC CHOICE OF MAKE EXPENSIVE PRODUCTS OR SUBCONTRACT MODIFY DESIGN TO REDUCE COSTS
VA PROCEDURE
IDENTIFY ITEMS TO BE ANALYSED DIFFERENTIATE WHETHER ITEM OR PROCESS IDENTIFY INTERNAL AND EXTERNAL CUSTOMERS IDENTIFY BASIC FUNCTIONS IDENTIFY SECONDARY FUNCTIONS WHICH SUPPORT BASIC TO PRIORITISE DETERMINE VALUE OR IMPERTANCE TO CUSTOMER OF EACH FUNCTION BREAK ITEM/PROCESS INTO CONSTITUENT COMPONENTS BY USING FLOWCHART ASSOCIATE COMPONENTS WITH FUNCTIONS LOOK FOR COMPONENTS WHICH CAN BE MODIFIED OR ELIMINATED
OPTIONS IN VA/VE
MODIFY INTEGRATE SUBSTITUTE SIMPLIFY
EXAMPLES OF VALUE ANALYSIS

MODIFY-MOTOR CAR ENGINES HAVE BEEN MODIFIED TO RUN ON CNG INTEGRATE-AIR CONDITIONER AND HEAQTER INTEGRATED INTO ONE UNIT SUBSTITUTE-INHOUSE WIRING HAS BEEN CHANGED FROM COPPER TO ALUMINIUM OR COKE BOTTLES CHANGED FROM GLASS TO PLASTIC SIMPLIFY-APPLICATION SOFTWARE SIMPLIFIED BY BEING MADE MODULAR.EARLIER ALL MODULES WERE BUNDLED OR COMPLICATED EQUIPMENT MADE MODULAR WHICH SIMPLIFIES MAINTENANCE
WHEN TO USE VA/VE

AIM IS TO EVALUATE REAL VALUE OF PRODUCT/PROCESS FOCUS IS ON SAVING COSTS AIM IS ON INCREASING VALUE OF PROCESS/PRODUCT
BENEFITS OF VALUE ENGINEERING

COST REDUCTION/ELIMINATION TECHNIQUE BALANCES COSTS AND PERFORMANCE PREVENTS OVER DESIGN OF PRODUCT (CUSTOMER FUNCTION DEPLOYMENT) INCREASES PROFITS AND REDUCES COSTS INCREASES CUSTOMER SATISFACTION
Productivity Technique
By Amol Dangore Vivek Agarwal
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Introduction
Definition: Work Study is the systematic examination of the methods of carrying on activities so as to improve the effective use of resources and to set up standards of performance for the activities being carried out.
Work Study succeeds because it is systematic both in the investigation of the problem being considered and in the development of its solution.
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Continue.
If work study results in cutting down the time of performing a certain activity by 20 per cent Merely as a result of rearranging the sequence or simplifying the method of operation Without additional expenditure Then productivity will go up by a corresponding value, that is by 20 per cent.
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WORK STUDY
OPERATIONS MGT IS ABOUT ADDING VALUE IN ACTIVITIES AND PRODUCING RESULTS AS DESIRED BY THE CUSTOMER. ACTIVITIES HAVE INPUTS WHICH ARE IN VARIOUS FORMS. THEY ALSO HAVE BUSINESS RULES AND METHODS BY WHICH THEY HAVE TO BE PERFORMED.THEY ALSO PRODUCE RESULTS WHICH SHOULD CONFORM TO CUSTOMERS REQUIREMENT WORK STUDY DEFINED AS SCIENCE OF EXAMINATION OF HUMAN WORK IN ALL CONTENTS WHICH LEADS TO SYSTEMATIC INVESTIGATION OF ALL FACTORS WHICH AFFECT EFFICIENCY GENERIC FORM OF TECHNIQUES WHICH ARE USED TO EXAMINE HUMAN WORK IN ALL ASPECTS AND WHICH SYSTEMATICALLY LEAD TO THE INVESTIGATION OF ALL
WORK STUDY
WORK STUDY INVESTIGATES AND CRITICALLY EXAMINES WORK DONE AND FINDS THE BEST AND MOST EFFECTIVE WAY OF USING RESOURCES TO AHIEVE BEST QUALITY RESULTS IN THE LEAST TIME AND COST CRUX OF WORK STUDY IS TO OPTIMIZE USAGE OF INPUT RESOURCES AND TO MAXIMIZE PRODUCTIVITY WORK STUDY HELPS IN DECIDING RESOURCE REQUIREMENTS AT THE
Operational Time
Definition: The time taken by a worker or a machine to carry out an operation or to produce a given quantity of a certain product . Basic work content of product and/or operation
Work content added by poor product design or material utilization Work content added by inefficient methods of manufacturing or operation.
Ineffective time resulting from human resources contribution
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Techniques of work study

Method study :The systematic recording and critical examination of ways of doing things in order to make improvements.
Work measurement :The application of techniques designed to establish the time for a qualified worker to carry out a task at a defined rate of working.
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Work Study Relationship

Method Study
To simplify the job & develop more economical methods of doing it
Work study
Work Measurement
To determine how long it should take to carry out
Higher Productivity
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ADVANTAGES OF WORK STUDY

IMPROVED PRODUCTION FLOW HIGHER PRODUCTIVE EFFICIENCY REDUCE MANUFACTURING COSTS FAST AND ACCURATE DELIVERIES BETTER EMPLOYEE RELATIONS BETTER SERVICE TO CUSTOMERS JOB SATISFACTION TO EMPLOYEES BETTER WORKING CONDITIONS HIGHER INCENTIVE BASED WAGES BASED ON HIGHER PRODUCTIVITY
ADVANTAGES OF WORK STUDY

PRODUCTION SMOOTHING DUE TO LINE BALANCING REMOVAL OF BOTTLENECKS LEADING TO REDUCED INVENTORY HIGHER PRODUCTIVE EFFICIENCY REDUCED MFG COST ACCURATE DELIVERY DATES TO CUSTOMER AS PER COMMITMENT BETTER SERVICE TO CUSTOMER
How to apply Work Study

Method Study
Analyzing the specific Methods used in carrying out an operation And simplifying job thru Economical ways
Work Measurement
-Determine the time required to perform the operation and its elements -Comprises of Motion and Time study
METHOD STUDY
METHOD STUDY
DEFINED AS SYSTEMATIC AND SCIENTIFIC ANALYSIS OF PROPOSED METHOD OF DOING A JOB IN ORDER TO DEVELOP A SIMPLE EFFICIENT EFFECTIVE AND LESS FATIGUING PROCEDURE OF DOING THE SAME JOB AT A LESSER COST BY OPTIMIZING INPUT RESOURCES IT USES DIFFERENT PROCESS MAPPING TECHNIQUES TO IDENTIFY AND ERADICATE THE NON VALUE ACTIVITIES OBJECTIVE OF METHOD STUDY IS TO IMPROVE PROCESS OF VALUE ADDITION .THIS IS DONE BY MAXIMIZING VALUE ADDED OPERATIONS AND MINIMIZING OR ELIMINATING DELAY STORAGE
METHOD STUDY
METHOD STUDY INVOLVES THE STUDY OF HOW ACTIVITIES ARE PERFORMED AND ATTEMPTS TO REMOVE NON VALUE ADDED ACTIVITIES AS WELL AS IMPROVE THE PROCEDURE AND WAY IN WHICH THE ACTIVITY IS PERFORMED SO THAT THE TIMING TO EXECUTE MAY BE REDUCED AND THE ACTIVITY IS PERFORMED IN LESSER TIME WITH LESSER EFFORT. Eg DENNIS LILEE BOWLING ACTION AFTER BACK OPERATION
METHOD STUDY
METHOD STUDY IS SYSTEMATIC RECORDING AND CRITICAL EXAMINATION OF WAYS OF DOING THINGS OBJECTIVE OF METHOD STUDY IS TO IMPROVE ACTIVITY ACTIVITY CAN BE IMPROVED THROUGH PROCESS REENGINEERING BY ELIMINATING NVA ACTIVITIES OR BY REDUCING EXISTING TIMINGS OF ACTIVITIES THROUGH BETTER WAYS NEED TO DRAW PROCESS CHARTS AND ACTIVITY CHARTS WITH MOVEMENT,STORAGE,DELAY,INSPECTION,ACTIVITY,DECI SION ALONG WITH TIMINGS
OBJECTIVES OF METHOD STUDY

IMPROVED WORK PROCESS LEADING TO ENHANCED PRODUCTIVITY STANDARDIZED PROCEDURE LEADIND TO CONSISTENCY IN ACTIVITY EXECUTION;HENCE GENERALLY CONSISTENCY IN PERFORMANCE BETTER WORKPLACE LAYOUT SAFER WORKING CONDITIONS IMPROVED PRODUCT QUALITY DUE TO HIGHER QUALITY ASSURANCE IMPROVED WORK ERGONOMICS LEADING TO HIGHER PRODUCTIVITY
Objective of Method Study

Improvement of processes and procedures Improvement in the design of plant and equipment Improvement of layout Improvement in the use of men, materials and machines Economy in human effort and reduction of unnecessary fatigue Improvement in safety standards Development of better working environment.
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HUMAN OPERATIONS ANALYSIS

DETAILED STUDY OF DIFFERENT OPERATIONS INVOLVED IN DOING WORK WITH THE OBJECTIVE TO FIND DEFECTS IN EXISTING METHODS AND TO DEVELP IMPROVED PROCEDURE AIMS AT OPTIMIZING UTILIZATION OF RESOURCES AND ESPECIALLY THOSE PARTS OF HUMAN BODY
METHOD STUDY PROCEDURE

SELECT WORK TO BE STUDIED AND DEFINE OBJECTIVES TO BE ACHIEVED OBJECTIVE MAY BE TO REDUCE COSTS BOTTLENECKS OR TO REDUCE FATIGUE INCURRED BY WORKERS AND TO INCREASE THEIR EFFICIENCY eg CONVEYOR BELT BY FORD RECORD RELEVANT INFORMATION PERTAINING TO EXISTING METHOD IN DETAIL AND DOCUMENT ACTIVITIES BY WAY OF MATERIAL FLOW CHARTS , PROCESS FLOW CHARTS , ACTIVITY FLOW CHARTS,INFORMATION FLOW CHARTS
METHOD STUDY PROCEDURE

INSTAL THE BEST DEVELOPED METHOD MAINTAIN AND CONTINUOUSLY REVIEW AND IMPROVE THE NEW METHOD (ADLI)
Method Study Procedure

1. 2. 3. 4. 5. 6. 7. DEFINE RECORD EXAMINE DEVELOP DEFINE NEW METHOD INSTALL MAINTAIN
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ADVANTAGES OF METHOD STUDY

IMPROVED WORK PROCESS LEADING TO HIGHER PRODUCTIVITY STANDARDIZED PROCEDURE LEADING TO CONSISTENCY IN PERFORMANCE BETTER WORK PLACE LAYOUT AND POSITIONING AND ARRANGING FACILITIES AND MACHINES NEAT AND CLEAN ENVIRONMENT REDUCED FATIGUE IN WORKERS IMPROVES PRODUCT QUALITY ENSURES SAFETY AND MINIMIZES HEALTH HAZARDS AT WORKPLACE
TIME STUDY
TIME STUDY
TIME STUDY CAN BE DEFINED AS THE APPLICATION OF SCIENTIFIC TECHNIQUES TO MEASURE WORK CONTENT OF ACTIVITY IN A NORMAL DEFINED SITUATION AND ESTABLISH TIME REQUIRED TO EXECUTE JOB BY VARIOUS SKILLS AT A DEFINED LEVEL OF PERFORMANE. FALLACY LIES IN DEFINING STD TIME FOR ALL LEVELS OF CAPABILITY AND EXPERIENCE
TIME STUDY
ALSO CALLED WORK MEASUREMENT IT DETERMINES THE TIME TAKEN TO DO A JOB DECIDES MANPOWER REQUIRED (QUANTITY VS QUALITY) DECIDES EQUIPMENT REQUIRED PROVIDES VALUABLE INFO FOR PRODN PLANNING IN TERMS OF TIME ESTIMATION FOR EACH STEP IN THE ROUTING INDICATES REALISTIC LABOR BUDGETING PROVIDES BASE FOR STD COSTING (CHECK CHANGING PARAMETERS) RESULTS IN EFFECTIVE LABOUR CONTROL
TIME STUDY
CONSISTS OF A WIDE VARIETY OF PROCEDURES FOR DETERMINING THE AMOUNT OF TIME REQD UNDER CERTAIN STD CONDITIONS OF MEASUREMENT A TERM WORK MEASUREMENT IS ALSO USED FOR TIME STUDIES
Objective of Work Measurement

To find ineffective time in a process To set standard for output level To evaluate worker's performance To plan work force needs. To determine available capacity To compare work methods To facilitate operations scheduling To establish wage incentive schemes
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USE OF STANDARD TIME

STANDARD TIME IS USED AS A NUMERICAL COEFFICIENT FOR CONVERTING A QUANTITATIVE STATEMENT OF THE WORKLOAD TO A QUANTITATIVE STATEMENT OF THE REQUIRED RESOURCES PLANNED COSTS ARE DERIVED FROM STANDARD TIMES BECAUSE BUDGETS ARE DERIVED FROM THE ACTIVITIES PERFORMED IN STANDARD TIME WHICH REQUIRE MONEY MATERIAL MEN etc. STANDARD TIME IS USED TO DETERMINE LABOR AND EQUIPMENT REQUIREMENTS ESPECIALLY OUTSOURCED EQUIPMENT .IN CERTAIN JOBS STANDARD TIME IS OF CRITICAL IMPORTANCE BECAUSE OF RESTRICTIONS IN DOWN TIME eg AN OIL AND GAS PRODUCTION WELL CAN BE DOWN FOR ONLY 120 HOURS IN A YEAR AND ALSO THEY NEED TO OUTPUT A MINIMUM FLOW OF GAS FAILING

TO ASSIST IN DEVELOPING EFFECTIVE METHODS TO DETERMINE THE NUMBER OF EQUIPMENT A PERSON CAN MANAGE AT A TIME eg WEAVERS 8/16 LOOMS. TIME VALUES SHOULD BE SET IN SUCH A WAY TAKING INTO ACCOUNT AN AVERAGE WORKER WITH A CERTAIN MINIMUM LEVEL OF SKILLS.TODAY THE STD TIMES ARE ERRONEOUSLY CALCULATED ON EITHER VERY HIGH SIDE LEADING TO LOW PRODUCTIVITY FIGURES OR LOW SIDE LEADING TO MISLEADING HIGH PRODUCTIVITY FIGURES. Eg STD TIME 20 MIN ACTUAL TIME 10 MIN PRODUCTIVITY 200% DISTRIBUTION OF WORK AMONG CREW COMPARE METHODS TO SET SCHEDULES

TO SET SUPERVISORY OBJECTIVES TO ASSIST IN COMPARING PLANS WITH ACHIEVEMENT WITH RESPECT TO WORKLOAD AND RESOURCE USAGE FOR TOTAL PRODUCTIVITY MEASUREMENT
ALLOWANCES
ALLOWANCES ARE ADDED TO NORMAL TIME TO ARRIVE AT STANDARD TIME TYPES OF ALLOWANCES INCLUDE PROCESS ALLOWANCE AND PERSONAL ALLOWANCE PROCESS ALLOWANCE ARE ALLOCATED TO COVER ENFORCED IDLE TIME OR SPECIAL CASES WHICH ARE NOT PART OF WORK CYCLE BUT ARE ESSENTIAL FOR PERFORMING WORK eg BEAM CHANGE IN WEAVING OR MACHINE SET UP TIME OR INTERFERENCE ALLOWANCE WHEN WORKER HANDLES MORE THAN ONE MACHINE eg WEAVER HANDLES 8/16 MACHINES PERSONAL ALLOWANCES INCLUDE TIME ALLOWED FOR FATIGUE , CALLS OF NATURE , DIFFICULT WORKING CONDITIONS etc. VARIES FROM 15% TO 30% DEPENDING ON SITUATIONS
WHAT DOES STANDARD TIME RELATE TO

IN WHAT UNITS IS WORKLOAD OR OUTPUT EXPRESSED IN WHAT UNITS ARE STAFF RESOURCES EXPRESSED A STANDARD TIME DETERMINED BY TIME STUDY WAS DEFINED AS INDICATING HOW LONG A GIVEN RATE OF WORK INPUT MUST BE MAINTAINED TO PRODUCE A UNIT OF OUTPUT TAKES INTO ACCOUNT INPUT ISSUES SUCH AS CONDITIONS OF WORK (ILLOGICAL RULE IN CRICKET-BOWL MINIMUM 15 OVERS AN HOUR IN 35 DEGREE CELSIUS WITH 90 %
ADVANTAGES OF TIME STUDY

DETERMINES TIME TAKEN TO DO JOB USING THE MOST OPTIMUM MEANS.HOWEVER THE STANDARD TIME EMPLOYED IS A BIT HAZY SINCE ONE STANDARD IS APPLICABLE TO DIFFERENT LEVELS OF COMPETENCES THEREBY CREATING A UNFAIR ADVANTAGE TO THE EXPERIENCED PERSONS. ALSO THE SAME PERSON PRODUCES DIFFERENT OUTPUTS AT DIFFERENT TIMES BECAUSE OF VARIOUS FACTORS RELATED TO HUMAN
ADVANTAGES OF TIME STUDY

DECIDES MANPOWER SKILLS (AND SHOULD ALSO DECIDE CAPABILITIES) REQUIRED TO DO THE JOB DECIDE EQUIPMENT REQUIRED PROVIDES INFORMATION FOR EFFECTIVE PRODUCTION PLANNING AND MAINTENANCE PROCEDURES AIDS AT CALCULATING REALISTIC DE3LIVERY DATES AND DOES REALISTIC LABOR BUDGETING PROVIDES BASIS FOR STANDARD COSTING FORMS THE BASE FOR INCENTIVE SYSTEMS
MOTION STUDY
MOTION STUDY
ANALYSIS OF AN OPERATION IN TERMS OF INDIVIDUAL MOTIONS OF A WORKER AS WELL AS WORKPLACE LAYOUT AND ERGONOMICS FOR ACHIEVING HIGH PRODUCTIVITY PURPOSE OF MOTION ANALYSIS IS TO DESIGN AN IMPROVED METHOD WHICH ELIMINATES UNNECESSARY MOTIONS AND EMPLOYS HUMAN EFFORTS MORE PRODUCTIVELY OBJECTIVE IS ALSO TO MINIMIZE FATIGUE TO OPERATORS AND AT THE SAME TIME MAXIMIZE PRODUCTIVITY
MOTION STUDY
MOTION STUDY CONSISTS OF A WIDE VARIETY OF PROCEDURES FOR SYSTEMATIC ANALYSIS AND IMPROVEMENT OF WORK PROCESS AND ORDER OF WOR METHODS CONSIDERING RAW MATRL,DESIGN OF PHYSICAL OUTPUTS,SERVICES,TOOLS WORKPLACE AND EQUIPMENT REQUIRED FOR EACH STEP IN THE PROCESS;HUMAN ACTIVITY REQUIRTED TO PERFORM EACH STEP AIM IS TO ESTABLISH AND DESIGN (SOP) CRITERION IS EFFECTIVENESS OF ACTIVITY,ACCURACY,RELIABILITY AND ECONOMY OF A PREFERABLE WORK METHOD
ANALYSIS OF MOTION
ANALYSIS OF AN OPERATION FOR ATTAINMENT OF END OBJECTIVE IS CARRIED OUT IN TERMS OF INDIVIDUAL MOTIONS OF A PERSON AS WELL AS THE WORK PLACE LAYOUT AND ERGONOMICS FOR ATTAINMENT OF HIGHEST LEVEL OF PRODUCTIVITY PURPOSE OF MOTION ANALYSIS IS TO ELIMINATE UNNECESSARY MOTIONS TO REDUCE FATIGUE AND EFFORT AND MAKE HUMAN EFFORT MORE PRODUCTIVE eg WEIGHT LIFTING
STEPS FOR MOTION STUDY

CHART VARIOUS MOTIONS PERFORMED BY OPERATORS IDENTIFY LABORIOUS AND IDLE MOTIONS.ALSO IDENTIFY COMPLEX MOTIONS WHICH ARE DIFFICULT TO PERFORM.OCCASIONALLY PERFORMER EXAGGERATES COMPLEXITY OF MOTION eg SIMPLE CATCH IS MADE TO LOOK DIFFICULT IDENTIFY PRODUCTIVE ,NON VALUE ADD AND IDLE MOTIONS ELIMINATE NON PRODUCTIVE AND UNREQUIRED MOTIONS OR SIMPLIFY COMPLEX MOTIONS eg WEIGHT LIFTING REDESIGN EXISTING OPERATING PROCEDURE BY IMPROVING THE MOTIONS INVOLVED IN WORK TAKING INTO ACCOUNT THE ABOVE OBSERVATIONS IMPART REQUIRED INSTRUCTIONS AND TRAINING TO OPERATORS
PRINCIPLES GOVERNING USE OF HUMAN BODY

BOTH HANDS TO BE USED FOR PRODUCTIVE WORK eg SEVERAL PEOPLE TYPE ON PC USING ONLY FORE FINGER BOTH HANDS SHOULD START AND FINISH THEIR MOTIONS AT THE SAME TIME EXCEPT FOR REST PERIOD TWO HANDS SHOULD NOT BE IDLE AT ONE TIME MOTIONS SHOULD BE SYMETRICAL SIMULTANEOUS MOTIONS SHOULD GENERATE MINIMUM FATIGUE MOTIONS SHOULD BE INCREMENTALLY
PRINCIPLES GOVERNING DESIGN OF WORKSTATIONS

DEFINITE AND FIXED PLACE FOR TOOLS AND MATERIAL NEED FOR LEFT HANDED TOOLS MATRL AND TOOLS TO BE LOCATED TO PERMIT BEST SEQUENCE OF MOTION GOOD ILLUMINATION AND VENTILATION AT WORKPLACE
PRIMARY OBJECTIVES OF MOTION STUDY

MAXIMIZE FINANCIAL ADVANTAGE THRU -LESS DIRECT LABOR EFFORT AND TIME -FEWER STEPS IN PROCESS -MORE PRODUCTIVE LABOR -LESS EQUIPMENT USAGE -LESS SPACE USAGE -LESS SCRAP GENERATED -LOWER OVERALL COSTS -LESSER IDLE TIME AND LESSER FATIGUE -FEWER HAZARDS IN OPERATIONS -
PLANT LAYOUTS
PLANT LOCATIONS
HISTORICALLY CERTAIN INDUSTRIES GREW IN CERTAIN AREAS DUE TO A NUMBER OF FACTORS PLANT LOCATIONS ARE PRIMARILY DECIDED BY PROXIMITY TO THE SOURCE OF RAW MATERIAL THOUGH NOT ANYMORE. OTHER FACTORS WHICH INFLUENCE THE CHOICE OF LOCATION INCLUDE -INFRASTRUCTURE AVAILABILITY -TRANSPORTATION FACILITY -AVAILABILITY OF SKILLED LABOUR AND RAW MATERIAL AND ECONOMICS OF COSTING eg HIGH LABOUR COSTS -AVAILABILITY OF POWER -PROXIMITY TO MARKETS BOTH INPUTS AND FINISHED GOODS - POLITICAL COMPULSIONS FINALLY CERTAIN TECHNICAL ISSUES MAY DETERMINE
Facility Design
Facility layout: Arrangement of machines, storage areas, and/or work areas usually within the confines of a physical structure, such as a retail store, an office, a warehouse, or a manufacturing facility. Factors that influence layout
Volume, weight of items to be produced. Nature of the service to be provided. Cost of the building to house the operation. The product mix that must have a facility. The fragility of the product or component.
What Is Layout Planning

Layout planning is determining the best physical arrangement of resources within a facility
Facility resource arrangement can significantly affect productivity Two broad categories of operations: Intermittent processing systems low volume of many different products Continuous processing systems high volume of a few standardized products
INTRODUCTION
Plant layout planning includes decisions regarding the physical allocation of the economic activity centers in a facility.
An economic activity center is any entity occupying space. The objective of plant layout planning is a more effective work flow at the facility, allowing workers and equipment being more productive.
Facility layout techniques apply to the case where several physical means have to be located in a certain area, either industrial processes or services. The objective of the chapter is not only Plant layout but re-layout also (most common situation for a company). To carry out an appropriate plant layout, its important to take into account the business strategic and tactical objectives
Example: space requirements/cost per m2 in Malls; accessibility/privacy in offices.
INTRODUCTION
To make a decision about layout planning, 4 different questions must have an answer:
Which centers do we have to consider? How much space and capacity is required for each center?
If there is not enough space, productivity may be reduced. Too much space is expensive and may also reduce productivity.
How must the space be configured at each center?

Space quantity, shape and the elements of the work center are related to each other.
Where should each center be located at within the facility?

The allocation of the different centers may affect productivity.
INTRODUCTION
The plant layout process starts at an aggregate level, taking into account the different departments. As soon as we get into the details, the different issues arise, and the original configuration may be changed through a feedback process. Most (if not all of them) layouts are designed properly for the initial conditions of the business, although as long as the company grows and has to be adapted to internal and external changes, a relayout is necessary.
INTRODUCTION
The reasons for a re-layout are based on 3 types of changes:
Changes in production volumes. Changes in processes and technology. Changes in the product.
The frequency of the re-layout will depend on the requirements of the process.
Symptoms that allow us to detect the need for a re-layout:

Congestion and bad utilization of space. Excessive stock in process at the facility. Long distances in the work flow process. Simultaneous bottle necks and workstations with idle time. Qualified workers carrying out too many simple operations. Labor anxiety and discomfort. Accidents at the facility. Difficulty in controlling operations and personnel.
INTRODUCTION
A Good Layout ...

Reduces bottlenecks in moving people or material. Minimizes materials-handling costs and material in process Reduces hazards to personnel. Utilizes labor efficiently. Increases morale. Utilizes available space effectively and efficiently. Provides flexibility. Provides ease of supervision. Facilitates coordination and face-to-face communication where appropriate. Implements safety measures
Lay Out
Types of Plant Layout
Product Layout Process Layout Fixed Position Layout Cellular Layout
Layout for Services
Objectives of Plant Layout

These main objectives are reached through the attainment of the following facts:
Congestion reduction. Elimination of unnecessary occupied areas. Reduction of administrative and indirect work. Improvement on control and supervision. Better adjustment to changing conditions. Better utilization of the workforce, equipment and services. Reduction of material handling activities and stock in process. Reduction on parts and quality risks. Reduction on health risks and increase on workers safety. Moral and workers satisfaction increase. Reduction on delays and manufacturing time, as well as increase in production capacity.
All these factors will not be reached simultaneosly, so the best solution will be a balance among them.
The final solution for a Plant Layout has to take into account a balance among the characteristics and considerations of all factors affecting plant layout, in order to get the maximum advantages. The factors affecting plant layout can be grouped into 8 categories:
Materials Machinery Labor Material Handling Waiting Time Auxiliary Services The building Future Changes
Factors affecting Plant Layout

The factors affecting plant layout can be grouped into 8 categories:
Materials
The layout of the productive equipment will depend on the characteristics of the product to be managed at the facility, as well as the different parts and materials to work on. Main factors to be considered: size, shape, volume, weight, and the physical-chemical characteristics, since they influence the manufacturing methods and storage and material handling processes. The sequence and order of the operations will affect plant layout as well, taking into account the variety and quantity to produce.

Machinery
Having information about the processes, machinery, tools and necessary equipment, as well as their use and requirements is essential to design a correct layout. The methods and time studies to improve the processes are closely linked to the plant layout. Regarding machinery, we have to consider the type, total available for each type, as well as type and quantity of tools and equipment. Its essential as well to know about space required, shape, height, weight, quantity and type of workers required, risks for the personnel, requirements of auxiliary services, etc.

Labor
Labor has to be organized in the production process (direct labor, supervision and auxiliary services). Environment considerations: employees safety, light conditions, ventilation, temperature, noise, etc. Process considerations: personnel qualifications, flexibility, number of workers required at a given time as well as the type of work to be performed by them.
Material Handling
Material handling does not add value to the product; its just waste. Objective: Minimize material handling as well as combining with other operations when possible, eliminating unnecessary and costly movements.

Waiting time - Stock
Objective: Continuous Material Flow through the facility, avoiding the cost of waiting time and demurrages that happen when the flow stops. On the other hand, the material waiting to flow through the facility not always represents a cost to avoid. As stock sometimes provides safety to protect production, improving customer service, allowing more economic batches, etc.
Its necessary then to consider space for the required stock at the facility when designing the layout.
Resting time to cool down or heating up

Auxiliary Services
Support the main production activities at the plant:
Related to labor: Accessibility paths, fire protection installations, supervision, safety, etc. Related to material: quality control. Related to machinery: maintenance and electrical and water lines.
The auxiliary services represent around 30% of the space at a facility. The space dedicated to auxiliary services is usually considered as waste.
Its important to have efficient services to insure that their indirect costs have been minimized.
Types of normally determines the type of Plant Layout The production process
plant layout to be applied to the facility:
Fixed position plant layout
Product stays and resources move to it.

Product oriented plant layout
Machinery and Materials are placed following the product path.

Process oriented plant layout (Functional Layout).
Machinery is placed according to what they do and materials go to them.

Cell Layout
Hybrid Layout that tries to take advantage of different layouts types.
Product Layout
Product A Product B
Step 1
Step 2
Step 3 Step 4
Step 1
Step 2 Step 3
Step 4
Product C
Step 1
Step 2 Step 3 Step 4
7-14
Product Layout
This type of plant layout is useful when the production process is organized in a continuous or repetitive way.
Continuous flow: The correct operations flow is reached through the layout design and the equipment and machinery specifications. Repetitive flow (assembly line): The correct operations flow will be based in a line balancing exercise, in order to avoid problems generated by bottle necks.
The plant layout will be based in allocating a machine as close as possible to the next one in line, in the correct sequence to manufacture the product.
Traditional Process Layout
Process oriented plant layout (Functional Layout)

This type of plant layout is useful when the production process is organized in batches. Personnel and equipment to perform the same function are allocated in the same area. The different items have to move from one area to another one, according to the sequence of operations previously established. The variety of products to produce will lead to a diversity of flows through the facility. The variations in the production volumes from one period to the next one (short periods of time) may lead to modifications in the manufactured quantities as well as the types of products to be produced.
Process Layout
Process Layout
Grouping together of machines and/or workers doing similar tasks. Applicable to both manufacturing and non manufacturing operations. Advantages
Flexibility: equipment and personnel can be used where they are needed. Smaller investment in equipment: duplication is not necessary unless volume is large. Expertise: supervisors for each department become highly. knowledgeable about their functions Diversity of tasks: changing work assignments make work more satisfying for people who prefer variety.
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Fixed-Position Layout
Used when product is large Product is difficult or impossible to move, i.e. very large or fixed All resources must be brought to the site Scheduling of crews and resources is a challenge
Work cells
Definition:
Cellular Layout
Group of equipment and workers that perform a sequence of operations over multiple units of an item or family of items.
Looks for the advantages of product and process layouts:

Product oriented layout: Efficiency Process oriented layout: Flexibility
Group Technology
Grouping outputs with the same characteristics to families, and assigning groups of machines and workers for the production of each family.
Cellular Layout
Process (Functional) Layout Group (Cellular) Layout
T T M M
T T M M
T T D D
CG SG D D
A cluster CG or cell T
SG D SG D
T M
M D
T
M CG SG
M D D
D
CG
Similar resources placed together
Resources to produce similar products placed together
WAGE INCENTIVES
Defining & Understanding Wage Incentives

According to the Commission on Labour, wage incentives are : Extra financial motivations designed to stimulate human effort by rewarding the person, over and above the time rated remuneration, for improvements in the present or targeted results. According to Hummel and Nickerson: It refers to all the plans that provide extra pay for extra performance in addition to regular wages for a job Florence observes: It refers to increased willingness as distinguished from capacity. Incentives do not create but only aim to increase the national momentum towards productivity.
DEFINITION OF WAGE INCENTIVE

INCENTIVE OR REWARD IS ANYTHING THAT ATTRACTS PEOPLES ATTENTION AND STIMULATES HIM TO WORK IT IS A PAYMENT PLAN RELATED DIRECTLY TO OUTPUT WITH A QUALITY RIDER WAGE INCENTIVE IS AN EXTRA FINANCIAL MOTIVATION DESIGNED TO STIMULATE HUMAN EFFORT BY REWARDING THE PERSON OVER THE AND ABOVE TIME/PIECE RATED WAGES OBJECTIVES OF INCENTIVE PLANS ARE -TO IMPROVE PROFIT OF FIRM THRU REDUCTION IN UNIT COST OF LABOR -AVOID OR MINIMIZE ADDITIONAL CAPITAL INVESTMENT FOR EXPANSION OF PRODUCTION CAPACITY -INCREASE WORKERS EARNINGS WITHOUT INCREASING WAGE STRUCTURE -SECURE BETTER MANPOWER UTILIZATION INCENTIVES ARE PIECE BASED OR QUALITY BASED
Objectives of Wage Incentives

To improve the profit of a firm through a reduction in the unit costs of labour and materials or both;
To avoid or minimize additional capital investment for the expansion of production capacity; To increase a workers earnings without dragging the firm into a higher wage rate structure regardless of productivity; To use wage incentives as a useful tool for securing a better utilization of manpower, better production scheduling and performance control, and a more effective personnel policy.
Classification Of Incentives
Labour vs. Management
Incentives may differ depending on whether the employee provides only labour or labour plus management to the operation With a managerial incentive, the employee has control over much of the day today decisions Labour incentives can be divided further into skilled or semi-skilled labour Physical vs. Economic Incentives can be based on physical production or a share of the income
Classification Of Incentives
Gross vs. Net
Income incentives can be further divided into incentives that are based on gross income or net income. Gross income incentives are usually easier to figure, but net income incentives tie the incentive to profits. Farm vs. Enterprise Incentives can be based on the entire farm business or an individual enterprise such as hogs or dairy. Whether an incentive is based on the performance of the whole farm or just one enterprise depends on the employees responsibilities.
Types of Incentives
Day work Worker is paid the same constant hourly rate (guaranteed minimum wage GMW), regardless of performance
Piecework (incentive with 100% participation) Worker is paid directly for each piece produced (i.e. directly proportional to performance) Standard hour plan Day work up to 100% performance, piecework (or a sharing plan) above 100% performance
Types of Incentives
Measured day work A progressive record of a worker's performance is used determine base pay for the next pay period. Regardless of the person's performance during that period, that person will receive the new base rate. Ex. Worker performance = actual output/expected output = 175/160 = 1.09 New base rate = base rate 1.09 = Rs. 100 1.09 = Rs. 100.90 If the worker's performance deteriorates, the new base rate also drops. However, some companies will maintain a lower threshold (at least the GMW), below which the base rate can not drop. With this plan, day-today pressures are taken off the worker. However, the incentive is not as strong as for other plans, and it requires extra bookkeeping.
Types of Incentives
Group incentive schemes Group output is measured and used to determine each group members pay
Especially useful for work cells or situations where individual performance can't be easily measured (e.g. shipbuilding, construction, etc.) These schemes have advantages in allowing greater flexibility, reducing competition and encouraging group spirit On the other hand, the individual incentive is reduced and better workers may become discouraged
Examples of Typical Incentives

Piece-rate pay for the job being done
Allowing workers to go home early, with full pay, when they finish a job
End-of-season bonus for employees who stay to the end

Quality or production incentive
Bonus for reducing production costs

Profit sharing.
Examples of Payments or Benefits which are not Incentives

Most mandated benefits such as unemployment insurance, workers compensation
Non - mandated benefits that do not fluctuate, such as housing Wage increases, vacation, or rewards that, once earned, are seldom lost Pay tied to time worked (except for bonuses for attendance, difficult shifts, and likewise).
Key considerations for an incentive program

The incentive is not a substitute for wages but an addition to a fair and equitable wage. It should be large enough to provide a proper incentive. As a rule, it should average 15 to 20 percent of the base wage. The incentive should be based on performance levels that are observable, measurable, and controllable by the employee. The objective of the incentive is to motivate employees to improve their performance level. Incentive payment should be paid promptly and regularly. The incentive plan should be reviewed regularly and modified as the employee gains skills or is assigned new duties and responsibilities.
JOB EVALUATION
DEFINITION OF JOB EVALUATION

SALARIES AND WAGES ARE ISSUES OF CONCERN FOR EMPLOYER AND EMPLOYEE EMPLOYER WANTS TO ESTABLISH FAIR AND EQUITABLE PAY STRUCTURE JOB EVALUATION IS A TECHNIQUE WHICH DETERMINES THE WORTH OF A JOB AND IN TURN ENABLES THE ESTABLISHMENT OF A SALARY HIERARCHY JOB EVALUATION IS DIRECTED TOWARDS RATING THE JOB INVOLVES JOB DESCRIPTION AND JOB ANALYSIS INVOLVES ANALYSIS OF TIME SPENT ON JOB BY PERSON
OBJECTIVES OF JOB EVALUATION

SECURE AND MAINTAIN COMPLETE ACCURATE AND IMPERSONAL DESCRIPTION OF EACH DISTINCT JOB PROVIDE PROCEDURE FOR DETERMINING RELATIVE WORTH OF EACH JOB DETERMINING RATE OF PAY FOR EACH JOB REMOVE INEQUALITY IN WAGE STRUCTURE PROVIDES CLEAN BASIS FOR COLLECTIVE BARGAINING ON WAGE STRUCTURE
JOB ANALYSIS
BASIC PROCEDURE USED TO DEFINE DUTIES , RESPONSIBILITIES AND ACCOUNTABILITY OF A JOB. IT INVOLVES -DETAILED DESCRIPTION OF JOB AND CAPABILITY IN VARIOUS ATTRIBUTES WHICH GO TOWARDS MAKING THE JOB DESCRIPTION SUCCESSFUL -DETERMINING DEPENDENCY AND RELATIONSHIP OF JOB WITH OTHER JOBS IN THE ORG -EXAMINING KNOWLEDGE QUALIFICATION FOR THE JOB
JOB ANALYSIS
JOB ANALYSIS IS A PROCESS THRU WHICH JOB DESCRIPTION AND JOB SPECS ARE DETERMINED AND EVALUATION IS PERFORMED JOB DESCRIPTION IS A DESCRIPTION OF THE JOB CONTENT ENVIRONMENT AND CONDITIONS OF WORK.IT SHOULD CLEARLY DEMARCATE THE BOUNDARIES OF AUTHORITY AND RESPONSIBILITY JOB SPECIFICATION STATES THE MINIMUM ACCEPTABLE PERSONAL PROFILE IN TERMS OF SKILLS ,KNOWLEDGE ,EXPERIENCE AND CAPABILITIES. IT IS A TECHNIQUE THAT SYSTEMATICALLY DETERMINES THE RELATIVE WORTH OF JOBS IN RELATION TO OTHER JOBS IN THE ORG
JOB ANALYSIS
JOB ENRICHMENT IS INCREASING DEPTH OF A JOB SO THAT EMPLOYEES EXPERIENCE GREATER JOB AUTONOMY THRU MPLOYEE EMPOWEMENT AND HENCE ALSO TEND TO GET MORE INVOLVED IN THEIR JOBS JOB INVOLVEMENT IS THE DEGREE TO WHICH EMPLOYEES INVOLVE THEMSELVES IN THE JOB AND INVEST TIME AND ENERGY AND VIEW WORK AS A CENTRAL PART OF THEIR LIFE
LIMITATIONS OF JOB EVALUATION

AT TIMES VERY COMPLICATED AND UNLESS APPRAISER KNOWS THE INS AND OUTS OF THE PROCESS,IT MAY BE POSSIBLE THAT HE UNDER/OVER ESTIMATES THE COMPLEXITY OPPOSITION BY TRADE UNIONS
TOTAL EMPLOYEE INVOLVEMENT AND EMPOWERMENT
TOTAL EMPLOYEE INVOLVEMENT
EMPLOYEE INVOLVEMENT IS A MATTER OF ASKING PEOPLES OPINION BEFORE MAKING DECISIONS THAT AFFECT THEM EMPLOYEE INVOLVEMENT INVOLVES FORMING GROUPS LIKE QLTY CIRCLE,TPM CIRCLE ETC ALL EMPLOYEES ENCOURAGED TO GIVE CREATIVE AND INNOVATIVE SOLUTIONS (KAIZENS) DEVELOPING MUTUAL TRUST RESPECT BETWEEN EMPLOYER AND EMPLOYEE-EMPL PARTICIPATION IN MGT INVOLVES GIVING OWNERSHIP OF QLTY TO WORKERS ,LISTENING TO THEIR IDEAS AND EMPOWERING THEM TO MAKE MORE DECISIONS IN THE BETTERMENT OF QLTY CONFLICT SITUATIONS TACKLED DIRECTLY CROSS FUNCTIONAL TRAINING AND GREATER CUSTOMER FOCUS EMPHASISE IMPORTANCE OF QLTY IN COMPANY ADVANTAGE BASE INCENTIVES ON QLTY RATHER THAN QUANTITY TEI = LEADERSHIP + TEAM + EMPOWERMENT + COMMITMENT + COMMUNICATION + CONSENSUS
TOTAL EMPLOYEE INVOLVEMENT

VOLUNTARY INVOLVEMENT TEI IS A STRATEGIC LING TERM STRATEGY TEI A MUST FOR CUSTOMER SATISFACTION
REQUIREMENTS OF TOTAL EMPLOYEE INVOLVEMENT

SYNERGY ACROSS THE ORGANISATION WITH EMPL AND SUPPLIERS ALIGNED WITH ORG MISSION AND VALUES EMPLOYEES AND SUPPLIERS KNOW THE CUSTOMER NEEDS AND WANTS AND ARE AWARE OF THEIR ROLE ORG STRATEGIES GOALS AND PLANS ARE THE OUTCOME OF TOTAL INVOLVEMENT OF ALL STAKEHOLDERS CRITICAL ELEMENT IS EMPOWERMENT PROCESS OWNERSHIP BY EVERYBODY AVAILABILITY OF INFORMATION AND KNOWLEDGE MOTIVATION OF EMPLOYEES AND RECOGNITION OF THEIR KNOWLEDGE MINIMISATION OF WASTE TRANSPARANCY IN SHARING IDEAS CONTINUOUS IMPROVEMENT IS A LONG TERM STRATEGY MUTUAL TRUST BETWEEN EMPLOYERS AND EMPLOYEES GROUP ACTIVITIES PART OF WORK CULTURE PERFORMANCE MEASURES BASED ON QLTY AND QTY
PRIMARY OUTCOMES OF TEI

CONFORMANCE OF INFORMATION ACCEPTANCE OF ROLES AND RESPONSIBILITIES CONTRIBUTION IN PROBLEM SOLVING COMMITMENT TO SOLVING PROBLEMS COOPERATION BETWEEN GROUPS TO RESOLVE PROBLEMS INVOLVEMENT AT PLACE OF WORK IN ISSUES RELATED TO THE WORKPLACE ACCOUNTABILITY OF ACTIONS AT WORKPLACE WITH LEAST SUPERVISION OWNERSHIP IN RUNNING WORKPLACE AND RESPONSIBILITY FOR TARGETS,QLTY,CLEANLINESS AND SAFETY
EMPOWERMENT
EMPOWERMENT MEANS GIVING POWER TO LINE LEVEL PEOPLE TO DO WHAT IS REQD TO SATISFY CUSTOMERS AND TRUSTING THE JUDGEMENT OF EMPLOYEES NATURAL EXTENSION OF EMPLOYEE INVOLVEMENT INVOLVES WORKERS PARTICIPATION IN DECISION MAKING EMPOWERMENT ADVOCATED BY DEMING OBJECTIVE OF EMPOWERMENT IS TO TAP THE INTELLECTUAL ENERGY OF ALL EMPLOYEES
IMPORTANCE OF EMPOWERMENT
EMPLOYEES FEEL THEY ARE GIVEN THE OPPORTUNITY TO TAKE DECISIONS AND HENCE IDENTIFY CLOSER WITH THE COMPANY THEY BELIEVE THEIR OPINIONS COUNT THEY GET COMMITED TO QUALITY THEY CONNECT THEIR WORK TO THE COMPANYS GOALS,MISSION AND VISION
HOW TO EMPOWER EMPLOYEES

PROVIDE A CLEAR ROLE FOR EACH EMPLOYEE PROVIDE ADEQUATE TRAINING AND EMPOWERMENT SHOULD INCLUDE RESPONSIBILITY AND AUTHORITY ALLOW CREATIVITY AND INNOVATION ALLOW PEOPLE TO EXERCISE THEIR JUDGEMENT WITHOUT FEAR ENCOURAGE CONTINUOUS LEARNING AND IMPROVEMENT RECOGNISE GOOD WORK DONE
FAILURE OF EMPOWERMENT
EMPOWERMENT IS USED AS A TOOL TO MAKE WORKERS VULNERABLE USED AS A MANIPULATIVE TOOL TO CRITICISE AND VICTIMISE MANAGERWS ABDICATE RESPONSIBILITY AND BLAME OTHERS FOR FAILURE NO FEEDBACK CONTROL SYSTEM
7 BASIC SQC TOOLS
The Basic Quality Control Tools

Seven Basic Quality Control (QC) Tools -CHECK SHEETS -HISTOGRAMS -PARETO ANALYSIS -SCATTER DIAGRAMS -RUN CHARTS -PROCESS FLOWCHART -CAUSE AND EFFECT ANALYSIS
Seven Tools for TQM
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CHECK SHEETS
SIMPLE TOOLS FOR DATA COLLECTION DATA SHEETS USE COLUMNAR FORMS TO RECORD DATA
Checklist
Simple data check-off sheet designed to identify type of quality problems at each work station; per shift, per machine, per operator
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Checksheet for Recording Complaints
Checksheet for Group Sizes in a Restaurant
HISTOGRAM
GRAPHICALLY SHOWS FREQUENCY OR NUMBER OF OBSERVATIONS OF A VARIABLE RANGE OF HORIZONTAL SCALE SHOULD EXTEND OVER THE FULL RANGE OF ACTUAL OBSERVED VALUES INTERVALS MUST BE OF EQUAL WIDTH THERE MUST NOT BE TOO MANY OR TOO FEW INTERVALS HISTOGRAMS DO NOT SUGGEST CAUSES OF VARIATION NOR DO THEY SHOW DATA VARIATION OVER TIME DATA SHOULD BE INDICATIVE OF TYPICAL PROCESS CONDITIONS AND LARGE ENOUGH TO PROVIDE GOOD CONCLUSIONS
Histograms
A chart that shows the frequency distribution of observed values of a variable like service time at a bank drive-up window Displays whether the distribution is symmetrical (normal) or skewed
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Bar Chart of Daily Units Produced
PARETO ANALYSIS
PARETO DISTRIBUTION IS ONE IN WHICH THE CHARACTERISTICS OBSERVED ARE ORDERED FROM LARGEST FREQUENCY TO SMALLEST OFTEN USED TO ANALYSE DATA COLLECTED IN CHECK SHEETS
Pareto Analysis
Technique that displays the degree of importance for each element
Named after the 19th century Italian economist

Often called the 80-20 Rule Principle is that quality problems are the result of only a few problems e.g. 80% of the problems caused by 20% of causes
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Pareto Analysis of Defects (Total Defects = 75) 100% 97%

70 60 50 40 30 20 10 0
Scratches
88%
93%
100% 80% 60% 40%
Frequency (Number)
12 5 4
Contamination
2
Misc.
20% 0%
72%
Porosity
16% 5% 4% Causes, by percent total defects
Nicks
3%
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Cumulative Percent
54
72%
SCATTER DIAGRAM
GRAPHICAL COMPONENTS OF REGRESSION ANALYSIS POINT TO IMPORTANT RELATIONSHIPS BETWEEN VARIABLES
Scatter Diagrams
A graph that shows how two variables are related to one another Data can be used in a regression analysis to establish equation for the relationship
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Scatterplot of Customer Satisfaction and Waiting Time in an Upscale Restaurant
RUN CHART
SHOWS RESULT OF INSPECTION TAKEN AT PRESCRIBED INTERVALS LINE GRAPH WHERE DATA PLOTTED AGAINST TIME RESULTS ARE PLOTTED AGAINST TIME TO SEE IF EXCESSIVE RESULTS OR PATTERNS EXIST CONSTRUCTING CHART INVOLVES FOLLOWING STEPS: -COLLECT DATA -EXAMINE RANGE OF DATA -PLOT POINTS ON CHART AND CONNECT THEM -COMPUTE AVERAGE OF ALL PLOTTED POINTS AND DRAW AS A HORIZONTAL LINE THROUGH DATA
Process Chart
Shows sequence of events in process Depicts activity relationships Has many uses
Identify data collection points Find problem sources Identify places for improvement Identify where travel distances can be reduced
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PROCESS FLOWCHART
USED TO HELP ANALYSE A PROCESS OR PIN POINT A PROBLEMBY SEQUENTIALLY SHOWING RELEVANT STEPS IN A PROCESS AND HOW THEY ARE INTER RELATED ALL ACTIVITIES MUST BE SHOWN INCLUDING NON VALUE ADD
Process Chart Example

SUBJECT: Request tool purchase Dist (ft) Time (min) Symbol Description D Write order
D On desk
75 D To buyer
D Examine = Operation; = Transport; = Inspect; D = Delay; = Storage

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Method Drill
Cause and Effect Diagram Example

Manpower
Slow
Tired Overtime
Old Lathe Too many defects
Wood Steel Material
Machinery
280
Cause-and-Effect Diagrams
Called Fishbone Diagram Focused on solving identified quality problem
281
Cause-and-Effect Diagram for Manufacturing
Exhibit S6.8
Cause-and-Effect Diagram for Service
A Framework for Applying Different Quality Control Tools
QUALITY CIRCLES
QUALITY CIRCLE
PARTICIPATORY MGT PROCESS IN WHICH A SMALL GROUP OF PEOPLE AT GRASS ROOT LEVEL ARE INVOLVED QC IS A QLTY,PRODUCTIVITY,SAFETY IMPROVEMENT TECHNIQUE QC IS A HRD AND A PROBLEM SOLVING TECHNIQUE AND IS BASED ON THE FACT THAT SUGGESTIONS AFFECTING WORKPLACE SHOULD BEST COME FROM PEOPLE WHO WORK THERE QC IS A GROUP OF PEOPLE FROM DIFFERENT WORK AREAS WHO MEET ON A REGULAR BASIS FOR RESOLVING PROBLEMS RELATED TO QLTY , PRODUCTIVITY, COST REDUCTION,SAFETY,CUSTOMER SERVICE QC IDENTIFIES PROBLEMS OR OPPORTUNITIES FOR FURTHER IMPROVEMENT THRU ANALYSIS OF DATA RELATED TO WORK PEOPLE EXPERIENCE AUTONOMY AT PLACE OF WORK AND CONTROL DECISIONS THAT AFFECT THEM
Quality Circle
Presentation
Implementation Monitoring
Organization
8-10 members Same area Supervisor/moderator
Training
Group processes Data collection Problem analysis
Solution
Problem results
Problem Identification
List alternatives Consensus Brainstorming
Problem Analysis
Cause and effect Data collection and analysis
CHARACTERISTICS OF QC
SMALL GROUPS FORMED IN WORKPLACE WITH MEMBERSHIP BEING VOLUNTARY MEMBERS TRAINED IN PROVBLEM SOLVING TECHNIQUES ENABLES MEMBERS TO USE HIDDEN TALENTS,SKILLS ENHANCES JOB SATISFACTION THRU CHALLENGES FACED BY WORKERS QC EFFORTS RECOGNISED BY MGT MINIMISES BOREDOM IN WORKPLACE
OBJECTIVES OF QC
IMPROVE QLTY AND PRODUCTIVITY THUS CONTRIBUTING TO IMPROVING AND DEVELOPING ERNTERPRISE REDUCE COSTS OF PRODUCTS BY WASTE REDUCTION,SAFETY,EFFECTIVE UTILIZATION OF RESOURCES,MINIMIZING DEFECTS AND ELIMINATING NON VALUE ADDED ACTIVITIES IDENTIFY AND SOLVE WORK RELATED PROBLEMS MAXIMIZE CREATIVE INTELLIGENCE OF PEOPLE DEVELOP INDIVISUALS AND ASSISTANCE IN SELF ACTUALIZATION INCREASE EMPLOYEE COMMITMENT AND LOYALTY SHARING OF IDEAS AND EXPERTISE
QC OPERATION CYCLE
BASIC PURPOSE OF QC IS TO IDENTIFY AND SOLVE WORK RELATED PROBLEMS EACH PROBLEM PASSES THRU STAGES SUCH AS: -IDENTIFICASTION SELECTION ANALYSIS -IDENTIFICATION OF SOLUTION WITH ALTERNATIVES -EVALUATION OF RISKS AND PROBABILITY -SELECTION OF SOLUTION -PREPARE ACTION PLANS WITH DESIRED OUTCOMES AND RETURNS -PREPARE BUDGETS FOR RESOURCES DURING IMPL -ALLOCATE RESOURCES TO PROJECT -IMPLEMENTATION,REVIEW AND FOLLOW UP
QC METHODOLOGY
WORKER PARTICIPATION IN QC ON VOLUNTARY BASIS FACILITATORS PROVIDED TO ASSIST TEAMS TRG PROVIDED FOR SUPERVISORS AND TEAM MEMBERS PROJECTS INITIATED BY ALL MEMBERS QC ISSUES CHOSEN BY MEMBERS
STRUCTURE OF QC
STEERING COMMITTEE WHICH INCLUDES TOP MGT(CEO,VP,GM,HOD) COORDINATORS(I/F BETWEEN TOP MGT AND LINE OPERATORS) FACILITATORS(SHIFT MGR) CIRCLE LEADERS(SR.FOREMAN) CIRCLE MEMBERS(LINE LEVEL WORKERS) INVITEES AND NON MEMBERS
QC AND EMPLOYEE EMPOWERMENT

EMPLOYEES UNDERSTAND WHAT IS REQD OF THEM TOOLS REQD FOR EXECUTION OF A JOB ARE AVAILABLE TO EMPLOYEES PEOPLE KNOW THE GOALS AND CRITICAL SUCCESS FACTORS
QC IN ASHOK LEYLAND
SELECTION OF PROBLEM WITH MATERIAL LOSS IN WKSHOP QC FORMED TO SOLVE PROBLEM AND MINIMIZE MATRL WASTAGE AND CONSUMPTION FIGURES RELATED TO LOSSES BEFORE/AFTER QC IMPL BEFORE IMPL AFTER IMPL EXP CONS YRLY 105KG 105KG ACTUAL CONS YRLY 210KG 165KG LOSS KG 105KG 60KG LOSS RS 1.785LACS RS 1.02 LAC RS
QC IN ASHOK LEYLAND
USING QC CAUSES RELATED TO MAN,M/C,MATRL,METHOD DETECTED CAUSES RELATED TO MAN :-LACK OF KNOWLEDGE OF MATRL IMPROPER WK INSTR -EXCESS OPER LACK OF KNOWLEDGE OF OPS/TOOLS CAUSES RELATED TO MACHINES -SUB OPTIMUM CONDITIONS FRICTIONAL WEAR OF PARTS MISALIGNMENT OF PARTS CAUSES DUE TO METHODS -IMPROPER MATRL HANDLING/STORAGE -LACK OF PROPER STD OPER INSTR CAUSES RELATED TO MATERIALS -IMPROPER SPECS TO SUPPLIERS INADEQUATE INSP METHODS REASONWISE % ATTRIBUTABLE FOR LOSS -MAN 35.7% -M/C 28.6% -METHODA 21.4% -MATERIAL 14.3%
OBSERVATIONS POST QC IN ASHOK LEYLAND

IMPROVED INTER PERSONAL RELATIONSHIP AND TEAMWORK ENHANCEMENT OF KNOWLEDGE BASE IN WORKERS MINIMIZED MATERIAL WASTAGE RESULTING IN MONETARY GAINS
BENEFITS OF QC IN BHEL
PERIODIC MEETING OF SHOP FLOOR WORKERS TO SOLVE THEIR WORK RELATED PROBLEMS AND DEVELOP MUTUAL TRUST AND COOPERATION BETWEEN MGT AND WORKERS AND INVOLVES WORKERS IN DECISION MAKING PROCESS IN THEIR AREAS QC LEADS TO ENHANCED PRODUCTIVITY DEVELOPS KNOWLEDGE MGT CULTURE AND PEER KNOWLEDGE IS SHARED
BENEFITS OF QC IN BHEL
QC EFFORTS IMPROVES QLTY OF PRODUCTS AND SERVICES TO CUSTOMER PRODUCTIVITY IMPROVEMENT RESULTS IN REDUCED TIME TO DELIVER AND REDUCED MFG COSTS ENSURES BETTER HOUSE KEEPING QC INCREASES PROFITABILITY BY REDUCTION OF WASTE ENRICHED QLTY OF WORK LIFE BETTER INTER PERSONAL COMMN
QC IN TOYOTA
WIDE USAGE OF QC MEETING ONCE A WEEK FOR 1 HR PEOPLE ENCOURAGED TO GIVE SUGGESTIONS PRINCIPLE OF KAIZEN FOLLOWED PROBLEMS ADDRESSED INCLUDE SAFETY,COST REDN,QLTY,PRODUCTIVITY,EQPT PERFORMANCE CERTAIN AREAS ARE OFF LIMIT EG WAGES,COMPANY OPERATING PRINCIPLES,HR POLICIES,SUPPLIER SELECTION,SALES AND MKTNG POLICIES AND PERSONALITIES HOWEVER PRIVATE SUGGESTIONS IN ABOVE AREAS COULD BE OFFERRED AS KAIZEN CREATION OF ANGER VENTING ROOM
ERGONOMICS
ERGONOMICS
The word Ergonomics comes from the Greek words Ergos--(work) and Namos-- (natural law).
DEFINITION OF ERGONOMICS
APPLICATION OF THE HUMAN BIOLOGICAL SCIENCES IN CONJUNCTION WITH ENGG SCIENCES TO THE WORKER AND HIS WORKING ENVT TO OBTAIN MAX SATISFACTION FOR WORKER AND ENHANCE PRODUCTIVITY OBJECTIVE IS TO ENSURE WORKER SATISFACTION AND ENHANCE PRODUCTIVITY ERGONOMICS ACHIEVES THE ABOVE BY STUDY OF CONDITIONS IN WHICH PEOPLE WORK EFFECTIVELY AND COMFORTABLY IT ENTAILS MAKING WORKING CONDITION SYNERGETICAL TO HUMAN ACTIVITIES
DEFINITION OF ERGONOMICS
ALSO CALLED HUMAN ENGINEERING DEFINED AS THE SCIENTIFIC STUDY OF RELATIONSHIP BETWEEN MAN AND HIS WORKING ENVIRONMENT ERGONOMICS IMPLIES FITTING THE JOB TO THE WORKER COMBINES THE KNOWLEDGE OF PSYCHOLOGIST ANATOMIST AND BIO METRICIAN
ERGONOMICS
Definition:
u Ergonomics is an interdisciplinary approach
toward adapting the manmade environment around man, rather than man around the environment.
ERGONOMICS
Definition:
u Ergonomics is the study of how human beings relate to their work environment. The result of ergonomics is the adaptation of the workstation design and work tools to suit the individual performing a particular job function. The application of ergonomic principles to workstation design can result in increased effectiveness, work quality, health and safety, and job satisfaction.
SCOPE OF ERGONOMICS
SUGGEST BEST WAY OF USING HUMAN BODY THRU METHOD STUDY SUGGEST BEST WAY OF ARRANGING WORKPLACE SUGGEST THE BEST DESIGN OF TOOLS AND EQUIPMENT
OBJECTIVES
Provide basic training regarding the identification, evaluation, and control of ergonomic exposures and hazards. This will include: The role of ergonomics Ergonomics-related injuries and their causes Proper workstation arrangement Controlling ergonomic hazards
OBJECTIVES OF ERGONOMICS STUDY

OPTIMIZE INTEGRATION OF MAN AND MACHINE IN ORDER TO INCREASE PRODUCTIVITY AND QUALITY INVOLVES DESIGN OF -WORK PLACE BEFITTING THE NEEDS AND REQUIREMENT OF WORKERS -EQUIPMENT CONTROLS IN SUCH A WAYTO
ENVIRONMENTAL ASPECT OF ERGONOMICS

DAYLIGHT TO BE REINFORCED WITH ARTIFICIAL LIGHT DEPENDING ON THE NATURE OF WORK PROPER VENTILATION IN PLACE DUST AND FUME COLLECTORS AND DISPATCHERS SHOULD BE ATTACHED TO MACHINES eg SCENE IN TEXTILE MILLS REFLECTIONS TO BE AVOIDED TEMERATURE AND HUMIDITY CONTROL TO BE IN PLACE NEED TO REDUCE NOISE EMISSION LEVELS
TOTAL QUALITY MANAGEMENT
DEFINITION OF QUALITY
-JURAN-QLTY IS FITNESS FOR USE -CROSBY-CONFORMANCE TO REQMT FROM THE USERS POINT OF VIEW QLTY IS MEETING NEEDS AND WANTS OF THE USER. USER NOT ONLY EXPECTS PRODUCT/SERVICE TO MEET HIS FUNCTIONAL REQUIREMENTS-PRIMARY&SECONDARY BUT ALSO HIS EMOTIONAL REQUIREMENTS QUALITY MEANS -DEGREE OF EXCELLENCE -CONFORMANCE WITH REQUIREMENTS -ABILITY OF FUNCTIONALITIES TO SATISFY STATED OR IMPLIED NEEDS -FREEDOM FROM DEFECTS IMPERFECTION -SATISFYING AND DELIGHTING CUSTOMERS QUALITY IS PRODUCT/PROCESS/SERVICE ORIENTED
DEFINITION OF QUALITY
QUALITY IS - DEFINED BY CUSTOMER - MEASURE OF ACHIEVEMENT OF CUSTOMER SATISFACTION. - FULFILING CUSTOMER NEEDS & WANTS - VALUE FOR MONEY - DEFECTLESS PRODUCT TRADITIONAL WAY IN WHICH QUALITY IS EXPRESSED QUANTITATIVELY IS AQL (ACCEPTABLE QUANTITY LEVEL) WHICH IS EXPRESSED AS A % OF DEVIATION FROM STD. E.G. 1% AQL ON AN ORDER OF 1000 PRODUCT QTY TO BE MFG IS 10 DEFECTIVE OR PRODUCT NUMBERS NOT CONFORMING TO SPECIFICATIONS. AQL IS OFTEN FORCED ON SUPPLIERS BY CUSTOMERS ANOTHER MEASURE OF QUANTITATIVE EXPRESSION OF QUALITY IS SIGMA.
IMPORTANCE OF HIGHER QUALITY

INCREASED CUSTOMER SATISFACTION MORE SALEABLE PRODUCTS MEET COMPETITION INCREASED MKT SHARE SECURE PREMIUM PRICES REDUCE ERROR RATES
IMPORTANCE OF HIGHER QUALITY

REDUCE REWORK AND WASTE REDUCE FIELD FAILURES AND WARRANTY CHARGES REDUCE CUSTOMER DISSATISFACTION REDUCE INSPECTION SHORTEN TIME TO MARKET INCREASE ASSET UTILIZATION
KEY FACTORS IN ACHIEVING QUALITY

DEFINE CRITICAL SUCCESS FACTORS MANDATORY REQUIREMENTS OF BEING A SUPPLIER BY CHOICE COMPANY WIDE APPROACH TO QUALITY CUSTOMER SATISFACTION MEASURES V/S INTERNAL MEASURES EFFECTIVENESS
QUALITY BARRIERS
LACK OF TOP MGT COMMITMENT POOR UNDERSTANDING OF QLTY FUNCTIONAL BOUNDARIES CUSTOMER EXPECTATIONS SPEED OF ACTION GAP BETWEEN PROCESS EXPECTATION AND ACHIEVEMENT VENDOR CAPABILITY COST
NEED TO IMPLEMENT TQM

BUSINESS FACTORS AND CHANGING CIRCUMSTANCES SLOW ECONOMIC GROWTH AND SEVERE COMPETITION ACHIEVE LEADERSHIP IN COST,QLTY DELIVERY ELIMINATE DEFECTS FROM PRODUCT/SERVICE
NEED TO IMPLEMENT TQM

SLOW ECONOMIC GROWTH AND SEVERE COMPETITION INEFFECTIVE NEW PRODUCTS LAUNCHED CONCERNS ABOUT HOW TO ACHIEVE LONG TERM GOALS OF QLTY,COST,DELIVERY CHRONIC DEFECTS OR SUB EFFICIENCES IN PROCESS TO GET STARTED WE NEED TO -HAVE CUSTOMER FOCUS AND IMPLEMENT TOOLS SUCH AS QLTY FUNCTION DEPLOYMENT,BPI,CONTINUOUS IMPROVEMENT BENCHMARKING ETC TO MANAGE TQM EFFECTIVELY WE NEED TO IMPLEMENT PERFORMANCE MEASUREMENT SYSTEMS SUCH AS BALANCED SCORECARD,MALCOLM BALDRIDGE ETC
QUALITY MANAGEMENT PROCESS

ASSESS ORGANISATION VISION, MISSION, CRITICAL SUCCESS FACTORS IDENTIFY CUSTOMER SEGMENTS AND UNDERSTAND, ANTICIPATE THEIR NEEDS & WANTS DEFINE BUSINESS PROCESSES WITH CAPABILITIES RULES & MEASURES TO MEET SHORT TERM & LONG TERM GOALS. MANAGE BUSINESS PROCESSES THROUGH CONTROL OF EFFICIENCIES & EFFECTIVENESS THROUGH BENCH MARKING & ROOT CAUSE ANALYSIS AS WELL AS MEASURING VOICE OF CUSTOMERS. EFFECT BUSINESS PROCESS IMPROVEMENT ON A CONTINUOUS BASIS.
8 DIMENSIONS OF QUALITY LEVELS

CUSTOMERS HEAVILY INFLUENCED BY 8 DIMENSIONS IN DETERMINING QUALITY LEVELS. - PERFORMANCE: OPERATING CHARACTERISTICS - FEATURES: SECONDARY CHARACTERISTICS THAT SUPPLEMENT BASIC CHARACTERISTICS. - RELIABILITY: PROBABILITY OF PRODUCT FAILING WITHIN SPECIFIED PERIOD OF TIME. - CONFORMANCE: DEGREE TO WHICH PRODUCT DESIGN AND OPERATING CHARACTERISTICS MATCH PRE ESTABLISHED STANDARDS - DURABILITY: MEASURE OF PRODUCTS LIFE - SERVICEABILITY: SPEED AND COMPETENCE OF REPAIR - AESTHETICS: HOW A PRODUCT LOOKS - PERCEIVED QLTY: ASSESSMENT OF STDS RELYING ON COMPARISON BETWEEN PRODUCT BRANDS
TOTAL QUALITY MANAGEMENT

MEETING CUSTOMER REQMNT AT MINIMUM COST INVOLVES UNDERSTANDING EXTERNAL/INTERNAL CUSTOMERS AS WELL AS UNDERSTANDING THE BUSINESS IN TERMS OF FUNCTIONAL ANALYSIS AND QUALITY COSTS INVOLVES IMPLEMENTATION AND MONITORING OF QUALITY PARAMETERS USING INITIATIVES SUCH AS ISO 9000,ISO 14000,OSHAS 18000,CMM ,CMM-P ,TS 16949,SA 8000 CONTINUOUS QUALITY IMPROVEMENT THROUGH MGT COMMITMENT,EMPLOYEE INVOLVEMENT,QLTY MEASUREMENT AND ERROR PREVENTION USAGE OF QLTY TOOLS SUCH AS SPC,QFD AND BENCHMARKING
8 QUALITY MGT PRINCIPLES

CUSTOMER FOCUS CONTINUAL IMPROVEMENT MUTUALLY BENEFICIAL SUPPLIER RELATIONSHIPS INVOLVEMENT OF PEOPLE FACTUAL APPROACH SYSTEMS APPROACH PROCESS APPROACH LEADERSHIP
CUSTOMER FOCUS
ORGS DEPEND ON CUSTOMERS AND SHOULD UNDERSTAND CURRENT AND FUTURE NEEDS, MEET CUSTOMER REQUIREMENTS AND STRIVE TO EXCEED EXPECTATIONS COMMUNICATION WITH CUSTOMERS CUSTOMER CARE MANAGEMENT COMMITMENT
CONTINUAL IMPROVEMENT
CONTINUAL IMPROVEMENT OF ORG OVERALL PERFORMANCE SHOULD BE A PERMANENT OBJECTIVE CONTINUAL IMPROVEMENT REFLECTED THRU REQMNT ADDRESSING: -IMPROVEMENT PROCESSES -IDENTIFYING PROCESSES -REVIEWING DOCUMENTATION OF PROCESSES
MUTUALLY BENEFICIAL SUPPLIER RELATIONSHIPS

ORG AND SUPPLIERS ARE INTERDEPENDENT AND A MUTUAL BENEFICIAL RELATIONSHIP ENHANCES ABILITY OF BOTH TO CREATE VALUE MUTUALLY BENEFICIAL SUPPLIER RELATONSHIP IS REFLECTED IN REQUIREMENT ADDRESSING -EVALUATION OF SUPPLIERS -CONTROL OF SUPPLIERS -ANALYSIS AND REVIEW OF SUPPLIER DATA
PEOPLE INVOLVEMENT
PEOPLE AT ALL LEVELS ARE ESSENCE OF ORG AND THEIR FULL INVOLVEMENT ENABLES ABILITIES TO BE USED FOR ORG BENEFIT INVOLVES: -PARTICIPATION IN DESIGN REVIEWS -DEFINING OBJECTIVES RESPNSBLTS AUTHORITIES -CREATING ENVT OF MOTIVATION -INTERNAL COMMUNICATION -IDENTIFYING COMPETENCY NEEDS
FACTUAL APPROACH
MGT BY FACT IS CORNERSTONE VALUE FOR EFFECTIVE PLANNING OPERATIONAL DECISION MAKING AT ALL LEVELS EMPLOYEE INVOLVEMENT EMPOWERMENT AND LEADERSHIP DATA ON WHICH DECISIONS ARE BASED SHOULD BE FACTUAL ACCURATE TIMELY RELIABLE AND CONSISTENT DATA SHOULD NOT BE BASED ON INTUITION OR GUT FEEL EFFECTIVE DECISIONS BASED ON ANALYSIS OF DATA
FACTUAL APPROACH
PRINCIPLE IS REFLECTED THRU REQMNT ADDRESSING: -REVIEWS MEASUREMENT AND MONITORING TO OBTAIN FACTS -CONTROL OF MEASURING PROCESSES -ANALYSIS TO OBTAIN FACTS FROM INFO -RECORDS FOR DOCUMENTING FACTS -APPROVAL BASED ON FACTS
SYSTEMS APPROACH
IDENTIFYING UNDERSTANDING AND MANAGING INTERRELATED PROCESSES AS A SYSTEM CONTRIBUTING ORG EFFECTIVENESS AND EFFICIENCY IN ACHIEVING OBJ SYSTEMS APPROACH REFLECTED THRU THE REQMNT ADDRESSING: -ESTABLISHMENT IMPLEMENTATION AND MAINTENANCE OF MGT SYSTEM -INTERCONNECTING INTERRELATING AND SEQUENCING OF PROCESSES AND ESTABLISHMENT OF LINKS BETWEEN PROCESSES -ESTABLISHING MEASUREMENT PROCESSES
PROCESS APPROACH
DESIRED RESULT ACHIEVED MORE EFFICIENTLY WHEN RELATED RESOURCES AND ACTIVITIES MANAGED AS A PROCESS PROCESS APPROACH IS ABOUT MANAGING PROCESSES -THAT HAVE A CLEARLY DEFINED OBJ THAT IS BASED ON NEEDS -THAT ARE DESIGNED TO ACHIEVE OBJ THRU TASKS THAT USE CAPABLE RESOURCES HUMAN,PHYSICAL,INTELLECTUAL,INFORMTNL AND FINANCIAL -PRODUCE OUTPUTS THAT SATISFY CUSTMRS -MEASURE REVISE CONTINUALLY IMPROVE PROCESS EFFICIENCY AND EFFECTIVENESS
PROCESS APPROACH PRINCIPLES

IDENTIFY A PROCESS DEFINE PROCESS INPUTS AND OUTPUTS PROVIDE INFRASTRUCTURE AND RESOURCES FOR PROCESSES TO FUNCTION
LEADERSHIP
ESTABLISHES UNITY OF PURPOSE AND DIRECTION FOR ORG LEADERS SHOULD CREATE AND MAINTAIN INTERNAL ENVT IN WHICH PEOPLE ARE FULLY INVOLVED IN ACHIEVING ORG OBJECTIVE LEADERSHIP PRINCIPLES INVOLVE -SETTING OF OBJECTIVES -PLANNING - INTERNAL COMMN -CREATING EFFECTIVE WORKING ENVT
COMPONENTS OF LEADERSHIP
Failures in an org are faults of systems controlled by mgt. Work must be analysed and improved Process must be standardised to minimize variation in output Customer focus external and internal Improved relations with suppliers
Emphasis on process improvement Total employee commitment
Emphasis on process improvement Total employee commitment
USING PRINCIPLES OF QLTY MGT

PRINCIPLES CAN BE USED IN VALIDATING DESIGN OF PROCESSES IN VALIDATING DECISIONS IN AUDITING SYSTEMS AND PROCESSES PROCESS AUDIT CAN BE CARRIED OUT BY SEEKING ANSWERS TO THE FOLLOWING QUESTIONS:
QUALITY GAINS BY XEROX

SELF ASSESSMENT DONE USING MBNQA FRAMEWORK RESULTANT IMPROVEMENT INCLUDED: -DEFECT REDUCTION FROM 10000PPM TO 300 PPM -PRODUCT PERFORMANCE INCREASED BY 40% -CUSTOMER SATISFACTION INCREASED BY 38% -LABOUR OVERHEAD REDUCED BY 50% -MATERIAL OVERHEAD REDUCED BY 40%
EDWARD DEMING
STRESSES ON IMPROVING QLTY IN MFG THRU USE OF SQC TECHNIQUES AND SHOWED HOW PRODUCTIVITY PROFITABILITY ROI CAN BE IMPROVED THRU QLTY IMPROVMNT QLTY OF DESIGN,QLTY OF CONFORMANCE,QLTY OF SALES AND QLTY OF SERVICE APPROACH PROPOSED THRU 14 PRINCIPLES OF QLTY MGT WHICH FOCUS ON -CONFORMANCE TO REQUIREMENTS -TOP MGT COMMITMENT TO QLTY -PROCESS DESIGN AND CONTROL -CONTINUOUS CORRECTION OF QLTY PROBLEMS -EMPHASIS ON QLTY RATHER THAN COST -EMPLOYEE PARTICIPATION IN QLTY MGT -QUALITY INFDORMATION SYSTEMS -SYSTEM OF PREVENTION AND NOT APPRAISAL OF QUALITY -ZERO DEFECT AS THE IDEAL PERFORMANCE STANDARD -PRICE OF NON CONFORMANCE AS A MEASURE OF QUALITY
14 PRINCIPLES OF DEMING
CREATE STRATEGY TOWARDS IMPROVEMENT OF PRODUCT WITH AN AIM TO BE COMPETITIVE CREATE LEADERSHIP FOR CHANGE MGT ELIMINATE NEED FOR INSPECTION BY BUILDING QLTY INTO PRODUCT AWARD BUSINESS ON QLTY NOT PRICE COST REDN THRU CONTINUOUS IMPROVEMENT OF QLTY CONTINUOUS TRG FOR EMPLOYEES QLTY MGT SHOULD BE AN IMPORTANT CRITERIA FOR PERSONNEL APPRAISAL ENCOURAGE PEOPLE TO CONTRIBUTE EFFECTIVELY BREAK DOWN INTER DEPT BARRIERS ELIMINATE SLOGANS AND CLICHES IN WORKPLACE CORELATE WORK STDS TO QLTY STDS TARGETS SHOULD INCLUDE QUANTITATIVE AND QUALITY MEASURES CONSTITUTE SELF IMPROVEMENT PROGRAMS INVOLVE EVERYBODY IN ORG TO ACCOMLISH BUSINESS PROCESS QLTY IMPROVEMENT
Deming Wheel: PDCA Cycle

4. Act
Institutionalize improvement; continue cycle.
1. Plan
Identify problem and develop plan for improvement.
3. Study/Check
Assess plan; is it working?
2. Do
Implement plan on a test basis.
DEMING PDCA
PDCA IS PLAN DO CHECK ACT PLAN -IDENTIFY PROBLEM BY FACTS AND DATA -COLLECT DATA AND DETERMINE GOALS TO BE ACHIEVED -ANALYSE PROBLEM AND POSSIBLE CAUSES AND ISOLATE ROOT CAUSE DO -REMEDIAL STEPS FOR ERADICATION OF ROOT CAUSE OF PROBLEM CHECK -CHECK,MEASURE,ANALYSE AND MONITOR RESULTS ACT -STANDARDISE IMPROVEMENTS -CONTINUOUS REVIEW AND IMPROVEMENT
JOSEPH JURAN
DEFINES QUALITY AS FITNESS FOR USE FITNESS ACHIEVED THRU QUALITY OF DESIGN,QLTY OF CONFRMNCE AVAILABILITY AND SERVICE DETAILED 3 STEPS FOR QLTY CTRL -QLTY CTRL:GAIN CONFORMANCE THRU PREVENTION OF DEFECTS -QLTY IMPROVEMENT:CONTINUOUS IMPROVEMENT OF QLTY AND INCREASED ADHERENCE TO CONFORMANCE -SETTING GOALS,ESTABLISHING PLANS FOR MEETING GOALS AND EXECUTING PROJECTS TO ATTACK PROBLEMS
JOSEPH JURAN
JURAN EMPHASISES ON QLTY PLANNING,QLTY THRU PRODUCT DESIGN,QLTY AUDIT,QLTY COSTS TEN STEPS TO QLTY IMPROVEMENT:
JURAN 10 STEPS FOR QLTY IMPROVEMENT

BUILD AWARENESS OF NEED FOR IMPROVEMENT SET GOALS FOR IMPROVEMENT ORGANISE TO REACH GOALS PROVIDE CONTINUOUS TRG CARRY OUT CONSTANT SEARCH FOR SOLUTIONS REPORT AND DOCUMENT PROGRESS GIVE RECOGNITION COMMUNICATE RESULTS KEEP SCORE MAKE IMPROVEMENT PART OF THE REGULAR SYSTEMS AND PROCESSES OF COMPANY
JURAN PROCESS FOR QLTY IMPROVEMENT

ESTABLISH NEED FOR IMPRVMNT AND IDENTIFY AREAS ORGANISE DATA AND FACTS DIAGNOSE CAUSES OF PROBLEMS IDENTIFY AND PROVIDE REMEDIES FOR CAUSES ENSURE THAT REMEDIES SOLVE PROBLEM ONCE AND FOR ALL CONTINUOUSLY IMPROVE
JOSEPH JURAN
DEFINES QUALITY AS FITNESS FOR USE FITNESS ACHIEVED THRU QUALITY OF DESIGN,QLTY OF CONFRMNCE AVAILABILITY AND SERVICE DETAILED 3 STEPS FOR QLTY CTRL -QLTY CTRL:GAIN CONFORMANCE THRU PREVENTION OF DEFECTS -QLTY IMPROVEMENT:CONTINUOUS IMPROVEMENT OF QLTY AND INCREASED ADHERENCE TO CONFORMANCE -SETTING GOALS,ESTABLISHING PLANS FOR MEETING GOALS AND EXECUTING PROJECTS TO ATTACK PROBLEMS
JOSEPH JURAN
JURAN EMPHASISES ON QLTY PLANNING,QLTY THRU PRODUCT DESIGN,QLTY AUDIT,QLTY COSTS TEN STEPS TO QLTY IMPROVEMENT:
JURAN 10 STEPS FOR QLTY IMPROVEMENT

BUILD AWARENESS OF NEED FOR IMPROVEMENT SET GOALS FOR IMPROVEMENT ORGANISE TO REACH GOALS PROVIDE CONTINUOUS TRG CARRY OUT CONSTANT SEARCH FOR SOLUTIONS REPORT AND DOCUMENT PROGRESS GIVE RECOGNITION COMMUNICATE RESULTS KEEP SCORE MAKE IMPROVEMENT PART OF THE REGULAR SYSTEMS AND PROCESSES OF COMPANY
JURAN PROCESS FOR QLTY IMPROVEMENT

ESTABLISH NEED FOR IMPRVMNT AND IDENTIFY AREAS ORGANISE DATA AND FACTS DIAGNOSE CAUSES OF PROBLEMS IDENTIFY AND PROVIDE REMEDIES FOR CAUSES ENSURE THAT REMEDIES SOLVE PROBLEM ONCE AND FOR ALL CONTINUOUSLY IMPROVE
JURANs TRILOGY
QUALITY PLANNING A PROCESS FOR PRESENTING THE QUALITY GOALS AND PREPARATIONS TO MEET THESE GOALS QUALITY CONTROL THE PROCESS OF ENSURING THAT GOALS ARE ACHIEVED QUALITY IMPROVEMENT PROCESS OF BREAKING THROUGH TO HIGHER LEVELS OF QUALITY AND MEETING THE NEEDS OF CUSTOMERS FOE SUPERIOR PERFORMANCE
JURAN STAGES OF QUALITY PLANNING

Set up a vision , mission and a long term goal Define value systems that will guide the org Break mission statement into annual short term goals

Identify the customer at each stage of the process Determine customer needs and expectations Develop product/service features in line with customer needs and expectations Establish quality goals to meet customer and supplier needs at minimum combined cost Develop resources to provide the needed features Ensure resources are capable of meeting quality goals under operating conditions right first time

Develop systems and processes to produce these product features Prove process capability and hand over the plan at operative level Findings of Juran on planning -20% deficiencies are normally inherent due to bad quality planning -The best quality control can do is to maintain 20% deficiencies and not allow deterioration -Quality planning integrates attainment of mission and milestones of progress with routine activities
JURANS 7 STAGES OF QUALITY CONTROL

Choose control parameters-what to control Define units of measure Establish standards of performance Create methods of measurement Measure performance Interpret the results actual against standard Take action on the deviation
JURANS 8 STEPS FOR IMPROVEMENT

IDENTIFY NEEDS IDENTIFY PROJECTS ORGANIZE FOR PROJECTS ORGANIZE FOR DIAGNOSIS DISCOVER CAUSES ENSURE ACCEPTANCE OF REMEDY IMPLEMENT CHANGE HOLD GAINS
AJAY PIRAMAL GROUP MAHINDRA AND MAHINDRA OTIS ELEVATORS MUKAND INDUSTRIES TATA GROUP BOMBAY DYEING MARICO LTD PUNJAB TRACTORS LTD
INDIAN REFERENCES OF DEPLOYMENT OF JURAN TRILOGY
JURAN MANAGING FOR QUALITY(PLANNING)

ESTABLISH QUALITY GOALS IDENTIFY CUSTOMERS DETERMINE THEIR NEEDS DEVELOP FEATURES WHICH RESPOND TO THEIR NEEDS DEVELOP PROCESSES TO PRODUCE THESE FEATURES ESTABLISH PROCESS CONTROLS
JURAN MANAGING FOR QUALITY(CONTROL)

EVALUATE ACTUAL PERFORMANCES COMPARE ACTUAL PERFORMANCE TO QUALITY GOALS ACT ON GAP
JURAN MANAGING FOR QUALITY(IMPROVEMENT)

ESTABLISH INFRASTRUCTURE IDENTIFY IMPROVEMENT PROJECTS ESTABLISH PROJECT TEAMS WITH RESOURCES DIAGNOSE CAUSES AND FIND REMEDIES ESTABLISH CONTROLS
QUALITY ASSURANCE
PRIMARY CONCERN IS QUALITY ASSURANCE EMPHASIS ON PRODUCTION LINE AND QUALITY FROM THE FIRST STAGE QUALITY SYSTEMS DEVELOPMENT IMPLEMENTATION OF QFD, COST OF QUALITY, FMECA, VALUE ANALYSIS MOTTO IS DO THE RIGHT THING ALWAYS ELIMINATE NON VALUE ACTIVITIES AND FUNCTIONALITIES
QUALITY ASSURANCE
QUALITY ASSURANCE IS A PREVENTIVE BASED SYSTEM WHICH IMPROVED PRODUCT/ SERVICE BY ELIMINATING THE ROOT CAUSE OF PROBLEM LASTING AND CONTINUOUS IMPROVEMENT IN QUALITY CAN BE ACHIEVED BY DIRECTING ORG EFFORTS TOWARDS PLANNING AND PREVENTING PROBLEMS FROM OCCURING AT SOURCE QA FOCUSES ON PROVIDING CONFIDENCE THAT QLTY REQMNTS WILL BE FULFILED (ISO 9000:2000)
QUALITY ASSURANCE
ADDL FEATURES REQD WHEN PROGRESSING FROM QC TO QA ARE QMS TO INCREASE CONFORMITY, SEVEN QLTY CONTROL TOOLS, SPC, FAILURE MODE EFFECT ANALYSIS AND QLTY COSTS ACCENT IS ON PREVENTION OF NON CONFORMANCE EMPHASIS IS ON DESIGN IMPROVEMENT, PROCESS CONTROL IMPROVEMENT, ETC. QA IS A PREVENTION BASED SYSTEM WHICH INCREASES PRODUCTIVITY BY EMPHASISING ON DESIGN ASPECTS OF PRODUCT / SERVICE
QUALITY ASSURANCE
BY INTEGRATING QLTY INTO PLANNING & DESIGN STAGE IT STOPS NON CONFORMITY FROM OCCURING PROACTIVE APPROACH WHICH LOOKS AT PROCESS CONFORMITIES RESULTING IN PRODUCT CONFORMITIES SIX SIGMA ADVOCATES A METHODOLOGY CALLED PDCA QLTY CREATED AT DESIGN STAGE CHANGING FROM DETECTION TO PREVENTION REQUIRES NEW OPERATING PHILOSOPHY SUCH AS CROSS FUNCTIONAL TEAMS AND ROOT CAUSE ANALYSIS
COST OF QUALITY
MOST IMPORTANT CONSIDERATION IN TQM PROVIDES ABILITY TO ENHANCE CORPORATE PROFIT COST OF QLTY IS CARDINAL FOR JUDGEMENT OF PROCESS EFFECTIVENESS QLTY COSTS ARE DIRECTLY PROPORTIONAL TO THE QLTY CONFORMANCE OF THE PRODUCT MEASUREMENT OF COSTS HELPS TO HIGHLIGHT IMPORTANCE OF PRODUCT QLTY;FORMS BASIS OF DECISION MAKING;IDENTIFIES AREAS NEEDING IMPROVEMENT;MEASURES EFFECTS OF ACTIONS TAKEN; QLTY COSTS ARE CATEGORIZED INTO 4 MAJOR CATEGORIES-PREVENTION COSTS;APPRAISAL COSTS;FAILURE COSTS(INTERNAL AND EXTERNAL)
QLTY COSTING
QUALITY COSTS ARE INCURRED DURING THE ENTIRE PRODUCT LIFECYCLE eg DESIGNING,IMPLEMENTING,OPERATING,MAINTAINING, COSTS INCURRED IN MAKING CONTINUOUS IMPROVEMENT TO PRODUCT/PROCESS AND SUSTAINING QLTY COSTS INCURRED IN PRODUCT/SERVICE FAILURE QLTY COSTS CAN RANGE FROM 5% TO 25% OF SALES ALMOST 90% TO 95% OF THESE COSTS COME FROM APPRAISAL AND FAILURES REDUCING FAILURE COSTS BY ELIMINATING CAUSES OF FAILURE CAN LEAD TO REDUCTION OF APPRAISAL COSTS USAGE OF ACTIVITY BASED COSTING THRU COST DRIVERS MAKES IT EASIER TO GATHER QLTY RELATED COSTS ABC BREAKS DOWN COSTS INTO ELEMENTS CALLED COST DRIVERS eg m/c set up FOR EACH COST DRIVER AN OVERHEAD RATE IS DETERMINED COST DRIVERS RESULT IN MORE ACCURATE COSTING AND ENABLES QLTY COST ASSOCIATED WITH AN ACTIVITY TO BE IDENTIFIED
APPRAISAL COSTS
COSTS INCURRED TO MEASURE EXTENT OF CONFORMANCE AND INCLUDE COSTS MENTIONED BELOW -MEASURING,INSPECTING,TESTING AND AUDITING PERFORMANCE TO DETERMINE CONFORMANCE WITH STDS -QUALIFICATION TESTS FOR DESIGN REQUIREMENTS -EVALUATING PURCHASED ITEMS AND INSPECTION COSTS OF INCOMING MATERIAL -COST OF STORAGE OF MATERIAL AWAITING INSPECTION -EMPLOYEE AND EQUIPMENT PERFORMANCE -IN PROCESS INSPECTION AND CONTROL -FINAL TESTING AND INSPECTION -PRODUCTION TRIALS -MATERIAL CONSUMED DURING INSPECTION AND TESTING -FIELD PERFORMANCE TESTING -MAINTENANCE AND CALIBRATION OF EQUIPMENT -AUDIT OF PREVENTIVE SYSTEM TO ENSURE EFFECTIVENESS
PREVENTION COSTS
AIMED AT PREVENTING DEFECTS AND BUILDING ACCEPTABLE QLTY INTO PRODUCTS AND SERVICES INCLUDES TRAINING, DESIGNING PROCEDURES, VENDOR ASSURANCE EXERCISES,PROCESS CAPABILITY BUILDING ,TRAINING AND CONSUMER RESEARCH ORIENTED AT IMPROVING QLTY,PLANNING QUALITY ASSURANCE PREVENTION IS AVOIDABLE ACTIVITY AND SHOULD BE REPLACED BY TQM WHICH ADVOCATES COST OF BUILDING ACCEPTABLE QLTY PREVENTIVE COSTS INCLUDE DEVELOPMENT AND MAINTENANCE COSTS AS WELL AS QLTY PLANNING WHICH INCLUDESCOSTS INCURRED IN MFG PROCESS ,PROCESS RELIABILITY, PROCEDURE MANUALS,VENDOR DEVELOPMENT COSTS ,ADMIN COSTS,TRAINING COSTS, AND QLTY AUDIT COSTS
FAILURE COSTS
TWO CATEGORIES: INTYERNAL FAILURE COSTS AND EXTERNAL FAILURE COSTS INTERNAL FAILURE COSTS ARE COSTS INCURRED BECAUSE OF DEFECTS IN PRODUCT BEFORE SHIPMENT TO CUSTOMER AND INCLUDES COSTS SUCH AS: -COST OF SCRAPPING PRODUCT -COST OF REWORK -COST OF LOSS OF PRODUCTIVE TIME LOSS DUE TO DEFECTS SALE -LIABILITY INSURANCE COST OF OPPORTUNITY LOSS EXTERNAL FAILURE COSTS REPRESENTS COSTS INCURRED AFTER DELIVERY TO CUSTOMER AND INCLUDES HEADS SUCH AS COST OF COMPLAINT HANDLING,COST OF REPLACEMENT,WARRANTY COST OF REPAIRS AND EXTENDED WARRANTY,COST OF ADDITIONAL CLAIMS TO BE PAID TO CUSTOMER TO COVER LITIGATION COSTS AND PENALTY COSTS,LOST CUSTOMERS,BAD DEBT,SALES RETURNS
INDICATIVE COSTS OF QUALITY

Quality costs in Cimmco machines was 4% of turnover In Bharat Dynamics it was 11% of the cost of production and 4.4% of turnover. Staff time spent on quality related issues was failure(23%), prevention (20%) and appraisal (7%) Quality costs in a reputed textile mill has been reduced from 13% to 8% of - TO 3 yrs
BREAKUP OF QLTY COSTS ATN ASHOK LEYLAND

TOTAL QLTY COST IS 8.2% OF REV EXTERNAL COSTS IS 0.2% QLTY ASSURANCE IS 71.1% QLTY INSPECTION IS 12.8% QLTY CONTROL IS 15.9%
COST OF QUALITY IN RETAIL AS % SALES

RETURNS TO MANUFACTURER SECONDS REWORK INSPECTION 7.7% 17.9% 10.3% 64.1%
COST OF QUALITY
MANY ORG ARE UNAWARE OF HOW MUCH IT COSTS THEM TO PRODUCE NON QLTY COST OF QLTY DOES NOT SHOW UP IN PROFIT/LOSS STATEMENTS IT COULD COST COMPANIES AS MUCH AS 40-50% OF SALES TURNOVER TO GET THINGS RIGHT TQM HAS NOTHING TO DO WITH COST REDUCTION MEASURE THE INTANGIBLES IN THE SERVICE AREAS FIRST THAT IS WHERE THE REALWASTE IS EVIDENT
COST OF QUALITY
80-85% OF THE PROBLEMS ORIGINATE FROM NON MFG AREAS COST OF QLTY IS COMPOSED OF THE COST OF ERRORS AND REWORK COST OF INSPECTION AND COST OF PREVENTION REWORK AND INSPECTION COSTS CAN BE REDUCED THRU INCREASE IN ACTIVITIES OF PREVENTION ALL FUNCTIONS SHOULD IDENTIFY COQ MEASURES
TQM IN MARKETING
TQMMAR INVOLVES CONTINUOUS IMPROVEMENT IN THE MARKETING FUNCTION COMPANY OPERATIONS MUST BE COORDINATED AND MATCHED WITH NEEDS OF CUSTOMERS EVERYBODY WHO WORKS FOR THE COMPANY MUST PARTICIPATE IN A TOTAL MARKETING ENVIRONMENT
TQM MARKETING PROCESS
CLARIFY THE VISION IN RELATION TO MKT OPPORTUNITIES eg WHAT SORT OF BUSINESS WE WISH TO BE IN SET TANGIBLE GOALS TO EXPRESS WHAT THE COMPANY WANTS TO ACHIEVE eg LOW COST PRODUCER CHALLENGE DEVELOP AWARENESS AND KNOW OF WHERE COMPANY IS NOW,HOW SITUATION HAS EVOLVED AND WHAT TRENDS ARE OPEN IN THE FUTURE eg COMPARITIVE PERCEPTION BETWEEN CUSTOMERS AND SALESMEN MAINTAIN BUSINESS ACTIVITIES TO ENSURE THAT STRATEGIES AND TACTICS ARE MUTUALLY REENFORCING eg APPLY DEMING PDCA CYCLE IN STRATEGIC PLANNING AND DEPLOYMENT SET DYNAMIC STANDARDS TO CREATE CLEAR AND CONSISTENT OPERATING MILESTONES WHICH ARE RELEVANT TO CHANGING DYNAMICS OF MKTPLACE PLANNED IMPLEMENTATION DESIGNED TO ENSURE STRATEGIES AND POLICIES ARE PUT INTO PLACE THROUGH MARKETING PLANNING SYSTEMS ESTABLISH SOUND FEEDBACK CONTROL SYSTEMS TO REPORT ANALYZE AND RECTIFY THREATENING AND OUT OF CONTROL SITUATIONS
TQM IN PURCHASING
ORGANIZATIONWIDE PARTICIPATION IN THE IMPROVEMENT OF THE LOGISTIC PROCESS TO MEET THE NEEDS OF THE CUSTOMER IN MFG COMPANIES AROUND 50% OF PRODUCT COST COMES FROM MATERIAL COST IN SUPPLY CHAIN AREA PURCHASE QLTY IS CONSIDERED PARAMOUNT TO THE PROFITABILITY OF THE BUSINESS AND HENCE ACCENT ON PURCHASE QLTY PURCHASING NEEDS TO BE HENCE CONSIDERED AS A STRATEGIC FUNCTION
TQM IN PURCHASING
PURCHASING EFFECTIVENESS PURCHASING EFFICIENCY
PURCHASING EFFECTIVENESS
PURCHASING PRICE/COST DIMENSION PURCHASING QUALITY DIMENSION PURCHASING LOGISTICS DIMENSION
PRICE/COST DIMENSION
MATERIAL COSTS/PRICES COMPARISON COORDINATION TRANSPORTATION
QUALITY DIMENSION
SPECIFICATIONS REJECTS PURCHASING ENGINEERING REWORK PRODUCTION STOPS
LOGISTICS DIMENSION
LEAD TIMES ORDER QUANTITY INVENTORIES VENDOR PERFORMANCE DELIVERY PERFORMANCES
PURCHASING EFFICIENCY
PURCHASING ORGANIZATION DIMENSION -WORKLOAD ORDERS/QUOTATIONS -PROCEDURES -INFORMATION SYSTEM -MANAGEMENT -EXPERTISE
TQM IN HR
NEED TO DEFINE HR CAPABILITIES AND CAPACITY REQUIRED TO ACHIEVE SHORT AND LONG TERM GOALS HR QLTY RANGES FROM EFFECTIVE TRANSLATION OF ORG STRATEGIC GOALS TO HR LONG TERM AND SHORT TERM TARGETS AND TRANSLATE THEM INTO EFFECTIVE
PREREQUISITES FOR TQM IN HR

EMPLOYEE INVOLVE,EMPOWER HUMAN CAPITAL INCREASE RECRUIT AS PER COMPETENCE REQMNT QUALITY OF RELATIONSHIP WITH STAKEHOLDERS MOTIVATION OF EMPLOYEES TURNOVER CONTAINMENT
PREREQUISITES FOR TQM IN HR

TRAINING NEED TO BREACH SKILL GAPS WORK CULTURE SUCCESSION PLANNING CAREER DEVELOPMENT SAFETY AND HEALTH
TQM IN FINANCE
Effective risk management Expenditure control with respect to budget Reduced cost of operations Effective internal controls adhering to clause 49 , sox 404 and sas 70 Reduced cost of capital thru judicious borrowing Effective working capital management and minimized debts
CASE STUDY OF TQM IMPLEMENTATION AT ASHOK LEYLAND ASHOK LEYLAND HAS CHOSEN A TQM MODEL WHICH IS BASED
ON THE FOLLOWING PILLARS - TOTAL QUALITY CONTROL - JUST IN TIME - TOTAL PRODUCTIVE MAINTENANCE MODEL DESCRIBED IN THEIR PURSUIT OF WORLD CLASS MFG PURSUIT STEPS - CHANGE MGT & WORKER INVOLVEMENT / OWNERSHIP - BENCHMARKING OF TQM GOALS - CREATION OF SKILLS / MULTI SKILLS FOR TQM - CREATION OF PROCESSES FOR MONITORING OF IMPROVEMENT AND QUALITY CONTROL - IMPLEMENTATION OF INITIATIVES SUCH AS 5S, AUTONOMOUS MAINTENANCE, DESIGN FOR QUALITY, KAIZEN etc AIMED AT MAXIMISING THROUGHPUT OF PROCESSES AS PER CUSTOMER REQMNT.
CASE STUDY OF TQM IMPLEMENTATION AT ASHOK LEYLAND ACHIEVEMENT

- INCREASE IN OEE BY 6% SINCE JUNE 2005 - DECREASE IN INVENTORY BY 12% BUT NO STOCKOUTS. APPROX. RS. 3.0 LAKHS / VEHICLE - 6200 KAIZENS IMPLEMENTED SINCE JAN 1, 2005. - ZERO DEFECTS ACHIEVED IN 3 SHOP FLOORS - SUCCESSFUL IMPLEMENTATION OF AUTONOMOUS MAINTENANCE AND POKA YOKE RESULTING IN ENHANCED SALE OF 8%. - 75% ELIMINATION OF WASTE
TQM INITIATIVES IN VIKRAM CEMENT

INITIATIVES PRACTISED INCLUDE: - BUSINESS PROCESS IMPROVEMENT (CONTINUOUS IMPROVEMENT) - KAIZEN IN WORKPLACE - LIFE CYCLE COST MGT - JUST IN TIME - ZERO DEFECT - SPARE PARTS MGT - PROCESS CAPABILITY IMPROVEMENT THROUGH MEASUREMENT, ROOT CAUSE ANALYSIS, ETC. - FAILURE MODE EFFECT ANALYSIS - PLAN DO CHECK ACT - VALUE ANALYSIS - STATISTICAL PROCESS CONTROL - QUALITY FUNCTION DEPLOYMENT - TOTAL PRODUCTIVITY MAINTENANCE - CORPORATE SOCIAL RESPONSIBILITY PERFORMANCE MEASUREMENT SYSTEMS INCLUDE - BALANCED SCORECARD - EUROPEAN FOUNDATION FOR QUALITY MGT
TQM IN GODREJ INDUSTRY

CUSTOMER SATISFACTION THRU QUALITY FUNCTION DEPLOYMENT PDCA CYCLE MANAGEMENT BY FACT-5W + 1H APPROACH=WHAT,WHY,WHO,WHEN,WHERE + HOW TOTAL EMLOYEE INVOLVEMENT TOTAL WASTE ELIMINATION TOTAL QUALITY CONTROL CII-EXIM BUSINESS EXCELLENCE MODEL SUPPLIER DEPARTMENTAL PURPOSE ANALYSIS KEY BUSINESS PROCESS IMPROVEMENT SMALL GROUP ACTIVITY QUALITY CIRCLES KAIZEN 5S HOUSE KEEPING + TPM SIX SIGMA ENVIRONMENTAL HEALTH SAFETY COMMITTEES ISO 9000 CONTINUOUS COMPETENCY DEVELOPMENT
BENEFITS FOR GODREJ INDUSTRY

INCREASED CUSTOMER FOCUS CONTINUOUS IMPROVEMENT MINDSET BETTER PRODUCT QUALITY BETTER SYSTEMS AND PROCEDURES BETTER CROSS FUNCTIONAL TEAMWORK INCREASED PLANT RELIABILITY WASTE ELIMINATION IN OFFICES AND FACTORIES
TQM IN SERVICE SECTOR

SERVICE SECTOR IS ALL ABOUT INTERACTING WITH CUSTOMERS HENCE CONCEPT OF SERVICE QUALITY TQM IS A MEASUREMENT OF QUALITY PERFORMANCE TO APPLY TQM TO SERVICE SECTOR REQUIRES ANALYSIS OF CHARACTERISTICS OF SERVICE OPERATIONS SERVICE IS AN ACT OR PERFORMANCE THAT ONE PARTY OFFERS TO ANOTHER, AND IS INTANGIBLE AND DOES NOT RESULT INTRANSFER OF OWNERSHIP OF A TANGIBLE ASSET SERVICE IS PROVIDED TO A CUSTOMER INTERNAL AND EXTERNAL
DIMENSIONS OF SERVICE QUALITY
CUSTOMER PERCEIVED SERVICE QUALITY IS VIEWED AS A RESULT OF TECHNICAL (OUTPUT) QLTY AND FUNCTIONAL (PROCESS) QLTY. TECHNICAL REFERS TO TRADITIONAL QC IN MFG FUNCTIONAL IS WAY SERVICE IS DELIVERED THRU PROCESS IN WHICH CUSTOMER IS A PARTICIPANT CUSTOMER EVALUATES QLTY DURING OR AFTER SERVICE TEN DETERMINANTS OF SERVICE QUALITY - TANGIBLES SERVICE SHOULD BE A TANGIBLE FACILITY OR ADVICE RENDERED TO CUSTOMER - RELIABILITY CONSISTENCY OF PERFORMANCE AND ABILITY TO HONOUR PROMISED - RESPONSIVENESS READINESS AND TIMELINESS TO PROVIDE SERVICE
DIMENSIONS OF SERVICE QUALITY

- COMPETENCE POSSESSION OF REQD SKILLS AND KNOWLEDGE TO PERFORM SERVICE - COURTESY POLITENESS, RESPECT OF CONTACT PEOPLE - CREDIBILITY TRUST WORTHINESS AND HONESTY - SECURITY FREEDOM FROM DANGER & RISK - ACCESS APPROACHABILITY - COMMUNICATION KEEPING CUSTOMERS INFORMED IN LANGUAGE THEY UNDERSTAND LISTENING TO CUSTOMERS - UNDERSTANDING CUSTOMER MAKING REPORTS TO UNDERSTAND NEEDS AND WANTS
SERVICE PERFORMANCE GAP

COMPANY PERCEPTION OF SERVICE OUTCOME SHOULD MATCH CUSTOMER EXPECTATION IF IT FAILS TO DO SO THERE IS A SERVICE GAP OVERALL GAP BETWEEN EXPECTATION AND PERCEIVED PERFORMANCE IS DETERMINED BY IMPORTANT GAPS WHICH INCLUDE INFO, DESIGN, COMMN 1. GAP BETWEEN CUSTOMER EXPECTATION AND MGT PERCEPTION OF EXPECTATION. 2. GAP BETWEEN MGT PERCEPTION OF CUSTOMER EXPECTATION AND COMPANY QLTY SPECIFICATIONS 3. GAP BETWEEN SERVIE QLTY SPECS AND ACTUAL SERVICE DELY 4. GAP BETWEEN ACTUAL SERVICE DELY AND EXTERNAL COMMUNICATION ABOUT SERVICE 5. GAP BETWEEN CUSTOMER EXPECTATION AND PERCEIVED SERVICE

CRITERIA USED BY CUSTOMERS IN JUDGING SERVICE - TANGIBLE PHYSICAL EVIDENCE POTENTIAL / DELVD - RELIABILITY HONOURING PROMISES. GETTING IT RIGHT - FEATURES ADDL PERFORMANCE OF SUPPLEMENTARY SERVICES - RESPONSIVENESS READINESS TO PROVIDE SERVICE ESPECIALLY AGILITY (OUTSIDE SPECS) - COMMUNICATION KEEPING CUST INFORMED IN LANGUAGE THEY UNDERSTAND - CREDIBILITY HONESTY TRUST - TIMELINESS PROVIDE CORRECT SERVICES IN TIME - SECURITY PHYSICAL & FINANCIAL - FLEXIBILITY ABILITY TO PROVIDE NON STD SERVICES - COMPETENCE POSSESSION OF CORE COMPETENCE - EFFECTIVENESS ACHIEVES DESIRED RESULT

- COURTESY POLITENESS, RESPECT - UNDERSTANDING KNOWING THE CUST NEEDS & WANTS - ACCESS ERASE OF APPROACH & CONTACT - PERCEPTION REPUTATION OF QLTY LEVEL - FUNCTION PERFORM PRIMARY FUNCTION - CONFORMANCE SATISFACTION OF PRESET REQMNT
ROLE OF TOTAL QUALITY IN SERVICE

ESTABLISH SERVICE GOALS THAT SUPPORT BUSINESS AND PRODUCT LINE OBJECTIVES IDENTIFY AND DEFINE CUSTOMER EXPECTATIONS FOR SERVICE QUALITY AND RESPONSIVENESS TRANSLATE CUSTOMER EXPECTATIONS INTO CLEAR DELIVERABLE SERVICES ,FEATURES
ROLE OF TOTAL QUALITY IN SERVICE

SET UP EFFICIENT RESPONSIVE INTEGRATED SERVICE DELIVERY SYSTEMS AND ORGS MONITOR AND CONTROL SERVICE QLTY AND PERFORMANCE PROVIDE QUICK COST EFFECTIVE RESPONSE TO CUSTOMER NEEDS EFFICIENT COMPLAINT MGT CUSTOMER RELATIONSHIP BUILD
REASONS FOR IMPLEMENTING TQM

PRODUCTS/SERVICES DONT MEET CUSTOMER REQUIREMENT CUSTOMER EXPECTATIONS ARE CONSTANTLY INCREASING AND ARE DIFFICULT TO MEET CURRENTLY HIGH QUALITY DEFECTS AND COSTS ATMOSPHERE OF INDIFFERENCE IN ORG WITH PEOPLE FEELING THAT QLTY IS JOB OF INSPECTION PRODUCT DELIVERY TIME IS HIGH AND DOES NOT MEET THE CUSTOMER EXPECTATION
RESULTANT BENEFITS OF TQM

GREATER CUSTOMER LOYALTY AND RETENTION LOWER EMPLOYEE ATTRITION GREATER QUALITY OUTPUTS FOCUS ON MARKET NEEDS AS WELL AS INDIVISUAL CUST NEEDS IMPROVED MARKET SHARE FACILITATES QLTY PERFORMANCE IN ALL PROCESSES THRU REMOVAL OF NON VALUE ADD ACTIVITIES GREATER PRODUCTIVITY AND LOWER QLTY COSTS HIGHER PROFITABILITY THRU DECREASED COST OF QUALITY REDUCED WARRANTY COSTS BETTER BUSINESS RESULTS POSITIVE WORK CULTURE IN ORGANISATION HIGHER EMPLOYEE MORALE COMMAND OF SOCIAL RESPECT GAIN IN TANGIBLE BENEFITS SUCH AS PRODUCTIVITY IMPROVEMENT ,REDUCED QLTY COSTS,INCREASED PROFITABILITY AND IN INTANGIBLE ASSETS SUCH AS EFFECTIVE TEAM WORK,IMPROVEMENT IN RELATIONS,CUSTOMER SATISFACTION AND ENHANCED PROBLEM SOLVING CAPACITY
ROADBLOCKS IN TQM IMPLEMENTATION

NO FORMAL STRATEGY OR METHOD LACK OF EFFECTIVE COMMUNICATN INADEQUATE TRG AND FOCUS ON QLTY LACK OF TOP MGT COMMITMENT AND INCOMPATIBLE STRUCTURES AND ISOLATED INDIVIDUALS LACK OF COMPETENCE OF LEADERS INADEQUATE DATA SYSTEMS AND ANALYSIS THRU UNAVAILABILITY OF PROPER TOOLS NO CUSTOMER FOCUS LACK OF PROPER SYSTEMS AUDIT LACK OF CROSS FUNCTIONAL EFFORTS EMPHASIS ON QUICK FIXES INABILITY TO CHANGE CULTURE IMPROPER PLANNING INEFFECTIVE MEASUREMENT TECHNIQUES LACK OF EMPOWERMENT FAILURE TO CONTINUALLY IMPROVE
REASONS FOR TQM FAILURE

LACK OF TOP MGT COMMITMENT IMPLEMENTATION OF CHANGES ARE NOT EXTERNALLY FOCUSED OR CUSTOMER FOCUSED LACK OF FOCUS ON CRITICAL BUSINESS PROCESSES;NO SUPPORT FOR LONG TERM IMPROVEMENT
REASONS FOR TQM FAILURE

LACK OF PROPER MEASURES ESPECIALLY AT STRATEGIC LEVEL WEAK CHANGE AND MINDSET MGT PROCESS
POKA YOKE
POKAYOKE

TECHNIQUE USED TO PREVENT ERRORS BEING CONVERTED TO DEFECTS QA APPROACH NON STATISTICALLY DRIVEN BASED ON ASSUMPTION THAT MISTAKES WILL OCCUR UNTIL PREVENTIVE MEASURES ARE TAKEN AFTER EVERY OPER PRODUCT ANALYSED FOR COMPLETENESS OF SPECS AND ADHERENCE TO QLTY AND IF EXCESS VARIATION PROCESS STOPPED SOURCE OF MISTAKE TO BE KNOWN ANALYSED AND CORRECTED EMPHASIS ON SOURCE ANALYSIS WHICH CHECKS FOR FACTORS WHICH CAUSE MISTAKES AND SOLUTIONS FOUND AND APPLIED TO PREVENT REOCCURENCE FORMIDABLE TOOL FOR ACHIEVING ZERO DEFECT ENCOURAGES WORKERS TO BECOME SENSITIVE TO QLTY ISSUES AND AVOIDS PASSING RESPONSIBILITY TO QLTY DEPT ENCOURAGES A BUILT IN QLTY CHECK SYSTEM DRASTICALLY REDUCES REWORK AND REJECTS AND OVERALL LEAD TIME
REASONS FOR ERRORS

HUMAN ERRORS OR ATTITUDE MACHINE MALFUNCTION OR POOR INPUT MATRL UNCLEAR OPERATING INSTRUCTION OR PROCEDURES
STEPS IN POKA YOKE

DETECTING DEFECT PREVENTING OCCURRENCE OF DEFECT PURPOSE IS TO STOP PROCESS WHEN CONDITIONS EXIST THAT CAUSE PROBLEMS AND PREVENT NON CONFORMING WIP FROM GOING DOWNSTREAM TWO TYPES OF POKAYOKE REGULATORY-DEVICES WHICH GIVE FOREWARNING AND SHUT DOWN PROCESS BEFORE ACCIDENT WHEN ABNORMALITY DETECTED EG PHOTOCOPIER SETTING POKAYOKE-DEVICES THAT CHECK THAT SETTINGS ARE OK BEFORE MAIN RUN
TECHNIQUES USED IN POKAYOKE

5S CAUSE EFFECT DIAGRAMS ROOT CAUSE ANALYSIS
ADVANTAGES OF POKAYOKE
REMOVES DEFECTS FROM SOURCE FASTER DEFECT DETECTION IMPROVES ENVT SAFETY ENSURES IMMEDIATE FEEDBACK IMPROVES EQPT EFFECTIVENESS AND RELIABILITY PROMOTES WORK CULTURE FOR PERFECTION
FMEA Failure Mode Effects Analysis
Agenda
Why does it always seem we have plenty of time to fix our problems, but never enough time to prevent the problems by doing it right the first time?
412
Failure Mode:
The manner in which a system fails.
Failure Modes
Premature operation Failure to operate on time Intermittent operation Failure to cease operation on time Loss of output or failure during operation Degraded output or operational capability Unique failure conditions
Failure Mode and Effects Analysis

A technique employed by engineers to improve system performance.
Failure Modes and Effects Analysis (FMEA)
FMEA is an inductive (bottom-up) engineering analysis method. It is intended to analyze system hardware, processes, or functions for failure modes, causes, and effects. Its primary objective is to identify critical and catastrophic failure modes and to assure that potential failures do not result in an adverse effect on safety and system operation. It is an integral part of the design process. It is performed in a timely manner to facilitate a prompt action by design organization and project management.
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FAILURE MODE EFFECT ANALYSIS

ENGG TECHNIQUE USED TO DEFINE IDENTIFY AND ELIMINATE KNOWN/POTENTIAL FAILURES PROBLEMS,ERRORS WHICH OCCUR ALL PROBABLE FAILURE MODES WITH THEIR CAUSES AND RESULTS LISTED WITH LIKELIHOOD OF FAILURE DONE BEFORE PRODUCT REACHES CUSTOMER IN BUSINESS PROCESSES THE DIRECT/INDIRECT FINANCIAL/NON FINANCIAL IMPACT COMPUTED FMEA AIMS TO ASSESS WHETHER EFFECTS OF FAILURE MODE ARE CRITICAL CONSIDERATIONS LIKE SEVERITY OF FAILURE,LIKELIHOOD OF FAILURE AND DETECTABILITY (FORESEEN THRU DEGRADATION,INSPECTION)
Failure Mode & Effects Analysis (FMEA)

FMEA is a systematic method of identifying and preventing system, product and process problems before they occur FMEA is focused on preventing problems, enhancing safety, and increasing customer satisfaction Ideally, FMEAs are conducted in the product design or process development stages, although conducting an FMEA on existing products or processes may also yield benefits
FMEA is a Tool
FMEA is a tool that allows you to: Prevent System, Product and Process problems before they occur reduce costs by identifying system, product and process improvements early in the development cycle Create more robust processes Prioritize actions that decrease risk of failure Evaluate the system,design and processes from a new vantage point
A Systematic Process
FMEA provides a systematic process to: Identify and evaluate
potential failure modes potential causes of the failure mode
Identify and quantify the impact of potential failures Identify and prioritize actions to reduce or eliminate the potential failure Implement action plan based on assigned responsibilities and completion dates Document the associated activities
Failure Modes, Effects, & Criticality Analysis

Virtually same as FMEA Identifies criticality of components Emphasizes probability of failure Criticality components
Failure effect probability Failure mode ratio Part failure rate Operating time
Failure Modes, Effects, and Criticality Analysis (FMECA)

A FMECA is similar to a FMEA; however, a FMECA provides information to quantify, prioritize and rank failure modes.
It is an analysis procedure which identifies all possible failure modes, determines the effect of each failure on the system, and ranks each failure according to a severity classification of failure effect.
MIL-STD-1629A, Procedures for Performing a FMECA, discusses the FMECA as a two-step process:
Failure Modes and Effects Analysis (FMEA). Criticality Analysis (CA).
Criticality analysis can be done quantitatively using failure rates or qualitatively using a Risk Priority rating Number (RPN). CA using failure rates requires extensive amount of information and failure data. A RPN is relatively simple measure which combines relative weights for severity, frequency, and detectability of the failure. It is used for ranking high risk items.
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Failure Modes, Effects, and Criticality Analysis (FMECA) Example
Part name/ Part number
Potential Causes (failure Failure modes Mechanism)

1. Bellows fracture/fatigue 2. Flange/duct fracture 3. Seal failure
Effects
Fire and Explosion
Fire and Explosion Fire and Explosion Fire and Explosion Fire and Explosion
Risk Priority Rating Sev Freq Det RPN
Recommended Risk Priority Rating Improvement Sev Freq Det RPN
Turbine Exhaust External Duct Assembly leakage of hot exhaust P/N gas (System 10206-0002-102 A and/or B)
4. Seal surface defect 5. Improper torque
6. Contamination Fire and during assembly Explosion 7. Improperly lockwired Fire and explosion
423
METHODOLOGY OF FMEA

IDENTIFY PROCESS CHARACTERISTICS IN EACH OPERATION DEFINITION OF WHAT IS FAILURE-TOTAL,PARTIAL WITH EFFECTS FIND OUT ALL POSSIBLE FAILURE MODES AND ANALYSE EFFECTS ESTIMATE SERIOUSNESS OF FAILURE MODES AND EFFECT TO CUSTOMER BY RATING FAILURE IN TERMS OF RISK PRIORITY NUMBER FIND OUT ROOT CAUSE OF FAILURE SUGGEST ACTIONS TO IMPROVE DETECTION AND ELIMINATE FAILURE MODE OR REDUCE OCCURRENCE AND IMPACT FAILURES ADDRESSED BASED ON RPN OBJECTIVE OF FMEA TO ANTICIPATE FAILURES INTER RELATIONSSHIP BETWEEN FAILURES DRAWN THRU FAULT TREE ANALYSIS USING AND/OR GATES FTA/FMEA DEVELOPED BY BELL LAB AND WIDELY USED BY US DEFENCE UNDER THE INITIATIVE RCM 1
Failure Mode and Effects Analysis

1. Define failure mode.
2. Identify cause of failure. 3. Identify effects of failure. 4. Corrective action.

Items in a typical FMEA sheet for the Shuttle program: Nomenclature and function Failure mode and cause Failure effect on subsystem Failure effect on element Failure effect on mission/crew and reaction time Failure detection Redundancy screens Correcting action/timeframe/remarks Criticality
427
Strategy to Improve
Try to eliminate the failure mode.
Minimize the severity of the failure. Reduce the occurrence of the failure mode.
Improve the detection.
KEY DEDUCTIONS OF FMEA

PROCESS RELIABILITY AND UPTIME ROOT CAUSE FAILURE ANALYSIS CAUSE EFFECT CHAIN OF FAILURES WITH PATTERNS PROCESS EFFECTIVENESS AND EFFICIENCY CUSTOMER COMPLAINTS AND RETURN DATA ANALYSIS
CATEGORIES OF FMEA
SYSTEM FMEA USED TO ANALYSE COMPONENTS/SUBSYSTEMS IN EARLY STAGE OF DESIGN CONCEPT DONE THRU COP AID SIMULA DESIGN FMEA USED TO ANALYSE PRODUCTS/PARTS BEFORE THEY ARE RELEASED TO MFG THRU CAE-CAD PROCESS FMEA APPLICABLE IN ANALYSIS OF FAILURE MODES CAUSED BY PROCESS DEFICIENCES SEVICE FMEA USED TO ANALYSE SERVICES BEFORE THEY REACH THE CUSTOMER THRU ENSURING OF QLTY AND RELIABILITY OF SERVICE
FMEA Process
Define system & analysis scope Construct block diagrams Assess each block for effect on system List ways that components can fail Assess failure effects for each failure mode Identify single point failures Determine corrective actions Document results on worksheet
What Must be done before FMEA Begins!

Understand your Customer Needs Develop & Evaluate Product/Process Concepts
Getting Started on FMEA
=QFD
Ready?
Determine Effects of The Failure Mode
=Brain Storming
Create an Effective FMEA Team
=4 to 6 Consensus Based Multi Level Experts
= What we Define the FMEA are and are Scope not working
Determine Product or Process Functions 432
Develop and Drive 7 Action Plan
Severity Rating
Determine Failure Modes of Function
Occurrence Rating
Determine Causes of The Failure Mode
Determine Controls
Calculate & Assess Risk
6 6
Detection Rating
OUTPUT OF FMEA
POTENTIAL LIST OF FAILURE MODES POTENTIAL LIST OF CRITICAL CHARACTERISTICS AND EFFECTS POTENTIAL LIST OF FAILURE MODES PRIORITIES RANKED BY RPN POTENTIAL LIST OF PARAMETERS TO BE TESTED FOR A PROCESS SHORT AND LONG TERM PROCESS CAPABILITIES
The FMEA Worksheet

Product or Process Failure Mode Failure Effects S O E Causes C Controls V C D R Actions E P / Plans T N Resp. & p Target S Complete E Date V p O C C p p D R E P T N
1
Determine Product or Process Functions
3
Determine Effects of The Failure Mode
5
Determine Controls
7
Develop and Drive Action Plan
Determine Failure Modes of Function
Severity Rating
Determine Causes of The Failure Mode Occurrence Rating
Detection Rating
Calculate & Assess Risk
If an FMEA was created during the Design Phase of the Program, USE I Create an Action Plan for YOUR ROOT CAUSE and Re-Evaluate the RPN Accordingly
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PROCEDURAL STEPS IN FMEA ANALYSIS

IDENTIFY ALL COMPONENTS AND ASSEMBLIES OF THE SYSTEM LIST ALL POSSIBLE FAILURE MODES OF A SYSTEM WITH PROBABILITIES AND CAUSEEFFECT CHAIN DIAGRAM ESTIMATE EFFECTS EACH FAILURE MODE HAS ON PROCESS/PRODUCT LIST ALL POSSIBLE CAUSES OF EACH FAILURE MODE CALCULATE RPN=PROBABILITY*SERIOUSNESS*DIFFICULTY OF DETECTION
RISK PRIORITY NUMBER

HELPS IN DEFINING CRITICALITY OF FAILURE GOAL OF FMEA TO REDUCE RPN RPN=SEV* OCCUR*DET SEV 1=NO EFFECT SEV 10=HAZARD OCCURRENCE PROBABILITY 1-9 WITH 1 BEING REMOTE AND 9 CERTAIN FAILURE DETECTION IS POSSIBILITY AND EASE OF DETECTION WITH 1 BEING EASILY DETECTED AND 4 BEING DETECTED ONLY AFTER CAUSE EFFECT AND ROOT CAUSE ANALYSIS
SEVERITY CODES

1 NO EFFECT 2 VERY SLIGHT EFFECT ON PERFORMANCE. NON VITAL FAULTS OBSERVED.CUST NOT ANNOYED 3 SLIGHT EFFECT ON PERFORMANCE.CUST SLIGHTLY ANNOYED 4 MINOR EFFECT ON PERFORMANCE.FAULT DOES NOT REQUIRE IMMEDIATE ATTENDANCE.CUST OBSERVES MINOR EFFECT ON PERFORMANCE.NON VITAL FAULTS OBSERVED 5 MODERATE EFFECT ON PERFORMANCE.CUST DISSATISFIED.FAULT REQUIRES REPAIRS 6 SIGNIFICANT DEGRADATION OF PERFORMANCE BUT SYSTEM OPERATIONAL.CUST DISCOMFORT.NON VITAL PART INOPERABLE 7 MAJOR PERFORMANCE RETARDATION BUT SYSTEM OPERATIONAL. SUBSYSTEM INOPERABLE.CUST VERY DISSATISFIED 8 EXTREME SITUATION.SYSTEM INOPERABLE BUT SAFE CUST VERY DISSATISFIED 9 SERIOUS POTENTIAL HAZARD GRADUAL WHOLE FAILURE.SAFETY ENDANGERED 10 CATASTROPHIC HAZARDOUS EFFECTS SAFETY RELATED FAILURES.
OCCURRENCE PROBABILITY
RATING 1 2 3 4 5 6 7 8 9 CHANCE LIKELY 10**-8 REMOTE 10**-7 ISOLATED 10**-6 OCCASIONAL 10**-5 MODERATE LOW 10**-4 MODERATE HIGH 10**-3 RSNABLE PROBABLTY 10**-2 HIGH PROBABLTY 10**-1 IMMINENT 100% FAILURE
DETECTION RATING
1 FAULT OBVIOUS 2 FAULT DISCOVERED AFTER INSPECTION 3 FAULT DICOVERED AFTER FAILURE ANALYSIS 4 FAULT DISCOVERED AFTER PERFORMING CAUSE EFFECT AND ROOT CAUSE ANALYSIS
FMEA Scoring
Severity
Severity of Effect Extreme
May endanger machine or operator. Hazardous without warning May endanger machine or operator. Hazardous with warning Major disruption to production line. Loss of primary function, 100% scrap. Possible jig lock and Major loss of Takt Time Reduced primary function performance. Product requires repair or Major Variance. Noticeable loss of Takt Time Medium disruption of production. Possible scrap. Noticeable loss of takt time. Loss of secondary function performance. Requires repair or Minor Variance Minor disruption to production. Product must be repaired. Reduced secondary function performance. Minor defect, product repaired or "Use-As-Is" disposition. Fit & Finish item. Minor defect, may be reprocessed on-line. Minor Nonconformance, may be reprocessed on-line. No effect
Rating
10 9 8
High
7
6 5 4 3 2 1
440
None
Low
Moderate
Occurrence
Very High
Likelihood of Occurrence
Failure is almost inevitable
FMEA Scoring Failure Capability

Rate
1 in 2 1 in 3 1 in 8 1 in 20 1 in 80 1 in 400 1 in 2000 1 in 15k < .33 > .33 > .51 > .67 > .83 > 1.00 > 1.17 > 1.33 > 1.50 > 1.67
(Cpk) Rating
10 9 8 7
High
Process is not in statistical control. Similar processes have experienced problems.

Process is in statistical control but with isolated failures. Previous processes have experienced occasional failures or out-of-control conditions.
Moderate
6 5
4 3
Process is in statistical control.

Low
Process is in statistical control. Only isolated failures associated with almost identical processes. 1 in 150k Failure is unlikely. No known failures associated with almost identical processes. 1 in 1.5M
2
1
441
Remote
Detection
Very Low
Likelihood that control will detect failure
FMEA Scoring
Rating
No known control(s) available to detect failure mode.
10
Low
Controls have a remote chance of detecting the failure.
9
8
Moderate
7
Controls may detect the existence of a failure
6 5 4 3 2 1
Controls have a good chance of detecting the existence of a failure The process automatically detects failure. Controls will almost certainly detect the existence of a failure.
442
Very High
High
RPN or Risk Priority Number
The Calculation !
Severity x Occurrence x Detection= RPN
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FMEA CHART AT ASHOK LEYLAND

PROCESS-PROJECTION WELDING POTENTIAL FAILURE MODES: -THREAD TIGHT NUT DAMAGE -NUT MISSING POTENTIAL EFFECTS OF FAILURE -FITMENT PROBLEM SEVERITY 9 POTENTIAL CAUSES OF FAILURE: -CURRENT FLUCTUATION -IMPROPER WELDING OCCURRENCE 8 DETECTION METHOD-PROCESS CHECKING DETECTION 3 RPN 216
Benefits of FMEA
Contributes to improved designs for products and processes. Higher reliability Better quality Increased safety Enhanced customer satisfaction Contributes to cost savings. Decreases development time and re-design costs Decreases warranty costs Decreases waste, non-value added operations Contributes to continuous improvement

Benefits: The FMEA provides a systematic evaluation and documentation of failure modes, causes and their effects. It categorizes the severity (criticality category) of the potential effects from each failure mode/failure cause. It provides input to the CIL (Critical Items List). It identifies all single point failures. The FMEA findings constitute a major consideration in design and management reviews. Results from the FMEA provide data for other types of analysis, such as design improvements, testing, operations and maintenance, and analysis of mission risk.
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Fault Tree Analysis
FAULT TREE ANALYSIS
WELL ESTABLISHED TECHNIQUE FOR FINDING FAILURE RELATIONSHIP AND IS FAULT ORIENTED WHERE IT LOOKS AT ALL POSSIBLE WAYS IN WHICH A PRODUCT COULD FAIL FOCUSES ON RELATIONSHIPS BETWEEN FUNCTIONAL EFFECTS AND PRODUCT COMPONENT AND IS DONE TOP DOWNWARDS AND BEGINS BY IDENTIFYING THE TOP UNDESIRABLE EVENTS IN THE SYSTEM BASIC STEPS INVOLVED IN PERFORMING FTA : -ESTABLISHING SYSTEM DEFINITION -CONSTRUCTING FAULT TREE - EVALUATING FAULT TREE QUALITATIVELY -COLLECTING DATA SUCH AS FAILURE RATES REPAIR RATES AND FAILURE PROBABILITY AND MTBF -RECOMMENDING CORRECTIVE MEASURES WHEREAS FMEA CONSIDERS FAILURE OR INDIVIDUAL COMPONENTS OF SYSTEM ONE AT A TIME AND NOTING FAILURE CONSEQUENCES FROM BOTTOM UP FTA IS REVERSE OF FMEA USES OR /AND GATES FOR DRILLING DOWN
Fault-Tree Analysis (FTA)

FMEA and FMECA are bottom-up approaches to reliability analysis. FTA is top-down and yields a graphic portrayal of events that might lead to failure. There are various symbols used in FTA: Gate Symbol Gate Name AND gate OR gate Causal Relations Output event occurs if all the input events occur simultaneously. Output event occurs if any one of the input events occur.
Inhibit gate
Input produces output when conditional event occurs.
Fault-Tree Analysis (FTA)

Gate Symbol Gate Name
Priority AND Gate
Causal Relations
Output occurs if all the input events occur in the order
from left to right.
Exclusive OR Gate
Output event occurs if one, but not both, of the input events occur.
n inputs
m-out-of-n gate
Output event occurs if m-out-of-n input events occur.
Qualitative Fault Tree Analysis (FTA)

X-34 Hydraulic System Example
Inadequate Power to Pump Package 1 Motor
MTR-1-PWR Page X
Pump Package 1 Motor Controller Off / Low
Inadequate / No Power to Pump Package 1 Motor Controller
MTR-CTRL-1-OFF
MTR-CTRL-1-PWR
Pump Package 1 Motor Controller Fails Off / Low (Component Failure) MTR-CTRL-1-FOF
Pump Package 1 Motor Controller Commanded Off / Low (Software / Pressure Transducer Error) MTR-1-CTRL-CMD-OFF
Pump Package 1 Battery Failure (Loss of Charge / Inadequate Charge) PMP-PKG-1-BAT-F
Pump Package Relay Fails / Commanded Off
PMP-PKG-1-REL-OFF
Page XX Pump Package 1 Relay Fails Off Pump Package 1 Relay Commanded to "Off" Position
PKG-1-REL-FOF
PMP-PKG-1-CMD-OFF
Quantitative Fault Tree Analysis (FTA)

X-33 Methane Ground Storage and Loading Example
Inability to Load Methane (CH4)
NO-LOAD-CH4
CH4 Not Supplied Through Manual Valve V-1537

VIA-VLV-1537
Loss / Blockage of CH4 in Loading Line (Post V-1537)

LOAD-LINE
Valve V-1557 Fails Open
Valve V-1537 Fails Closed
CH4 Vented Through Load Line

CH4-LOAD-VNT
CH4 Transfer Blocked Through Load Line

CH4-LOAD-BLK
VLV-1557-OP
VLV-1537-CL
3.90E-04 Solenoid Operated Valve SOV-1549 Mech. Fails Open

SOV-1549-MECH-OP
3.90E-04 Solenoid Operated Valve SOV-1549 Solenoid Fails Open

SOV-1549-SOL-OP
Relief Valve RV1552 Open

RV-1552-OP
Solenoid Operated Valve SOV-1561 Fails Closed

SOV-1561-MECH-CL
Check Valve CV1548 Fails Closed

CV-1548-CL
6.50E-06
3.90E-04
3.90E-05 Solenoid Operated Valve SOV-1561 Mech. Fails Closed Solenoid Operated Valve SOV-1561 Solenoid Fails Closed
SOV-1561-SOL-OP
2.86E-08
452
SOV-1561-MECH-OP
6.50E-06
3.90E-04
Fault-Tree Analysis Steps

Generic Fault-Tree Analysis Steps are:
1. Define the top or primary event. This is the failure condition under study. 2. Establish the boundaries of the FTA. 3. Study the system to see how the various elements relate to one another and to the primary event. 4. Construct the fault tree, starting with the primary event and working downward. 5. Analyze the fault tree to identify ways of eliminating events that lead to failure. 6. Prepare a corrective action and contingency plans for preventing and/or dealing with failures. 7. Implement the plans. 8. This is iterative return to step one.
Root cause analysis of failure
Getting to the "Root" of the Problem

Sometimes the thing we think is a problem is not the real problem, so to get at the real problem, probing is necessary Root Cause Analysis is an effective method of probing it helps identify what, how, and why something happened Definition of root cause:
Specific underlying cause Those that can reasonably be identified Those that management has control to fix
ROOT CAUSE ANALYSIS OF FAILURE

UNDERTAKEN TO SEARCH FOR ROOT OF PROBLEM EFFECTIVE RCA IS ABOUT SEEKING SOLUTIONS THAT CONTROL CAUSES OF PROBLEMS LOOK FOR CAUSES FROM EFFECTS EACH CAUSE OR SET OF CAUSES CAUSE THE NEXT EFFECT(S) SOLUTION IS ATTACHED TO THE CAUSE THAT PREVENTS THE PROBLEM FROM REOCCURING UNDERSTANDING CAUSE EFFECT RELATIONSHIP IS VITAL IN EFFECTIVE MAINTENANCE PROGRAM TECHNIQUE FOR FAULT ANALYSIS WHICH TRACES ROOT CAUSE IS CALLED 5-WHY ANALYSIS
ROOT CAUSE ANALYSIS OF FAILURE

SEARCH ROOT CAUSE OF PROBLEM EACH CAUSE PRODUCES 1 OR MORE NEXT EFFECTS SOLUTION IS ONE THAT PREVENTS CAUSE FROM REOCCURING QUESTION WHY 5 TIMES MAY LEAD TO ROOT CAUSE OF PROBLEM
Root Cause Analysis Technique Five Whys

Five Why's refers to the practice of asking, five times, why the problem exists in order to get to the root cause of the problem
Employee turnover rate has been increasing
Why?
Why?
Why?
Why?
Why?
Employees are leaving for other jobs
Employees are not Employees feel satisfied that they are underpaid
Other employers are paying higher salaries
Demand for such employees has increased in the market
ROOT CAUSE ANALYSIS

Eroding Profits
Reduced Sales
Rising costs
Poor Cash flow
Contd /-
ROOT CAUSE ANALYSIS

Reduced Sales
Poor customer service
Increased competition
Uncompetitive pricing
Contd /-
ROOT CAUSE ANALYSIS

Poor customer service Increased competition Uncompetitive pricing
Delayed delivery
Poor quality
Incorrect shipment
5 Why Analysis Effects

Cost of failure/non-conformity
ROOT CAUSE ANALYSIS

PROBLEM IS REDUCED SALES CAUSE 1:WHY?CUSTOMERS REJECTED PRODUCT CAUSE 2:WHY?QUALITY WAS POOR CAUSE 3:WHY?INCORRECT RM CAUSE 4:WHY?RM NOT AS PER SPECS CAUSE 5:ROOT CAUSE:NO PROCEDURES IN PLACE TO CERTIFY SPECS GIVEN TO SUPPLIER
STAGES IN ROOT CAUSE ANALYSIS

UNDERSTANDING THE PROBLEM DATA COLLECTION AND REVIEW DATA ASSESSMENT ANALYSIS AND ROOT CAUSE DETERMINATION CORRECTIVE ACTION TAKEN CORRECTIVE ACTION REPORTING AND ANALYSIS
PROBLEM-CONVEYOR BELT GOT CUT ALONG WIDTH WHY BELT CUT--FOREIGN MATRL STUCK WHY FOREIGN MATRL STUCKENTRAPPED AROUND ROUTE WHY ENTRAPPEDMATRL NOT SCREENED WHY MATRL NOT SCREENEDINADEQUATE PROCESS CONTROL ROOT CAUSEWHY INADEQUATE PROCESS CONTROL SCREENING FACILITY NOT AVAILABLE
5 WHY ANALYSIS OF CONVEYOR BELT AT ASHOK LEYLAND
QUALITY FUNCTION DEPLOYMENT
METHODOLOGY WHERE ALL KNOWLEDGE ABOUT NEEDS AND WANTS OF CUST ARE INCORPORATED INTO ALL STAGES OF DESIGN,MFG,DELVY AND SERVICES QFD IS METHODOLOGY WHERE ALL REQMNT ARE UNDERSTOOD AND INCORPORATED FOR BENEFIT OF CUSTOMERS QFD EMPLOYS A STEP BY STEP APPROACH FROM CUSTOMER NEEDS AND EXPECTATIONS THRU 3 PLANNING PHASES OF: -PRODUCT PLANNING PRODUCT DEVELOPMENT -PROCESS DELIVERY AND SERVICES QFD IS PROCEDURE WHICH HELPS TO BUILD QLTY INTO UPSTREAM PROCESSES AND INTO NEW PRODUCT DEV VOICE OF CUSTOMER IS CARDINAL TO QFD IMPORTANT TO DETERMINE WHO ACTUALLY IS THE CUSTOMER INTERNAL OR EXTERNAL LEVELS OF CUSTOMER EXPECTATIONS: -BASIC FUNCTIONAL EXPECTATION PERFORMANCE EXPECTATIONS -SERVICE EXPECTATIONS -INVESTMENT PROTECTION EXPECTATIONS -MINIMUM COST OF OWNERSHIP

CUSTOMER REQUIREMENTS AND PERCEPTIONS PRODUCT PLANNING(TRANSLATION OF REQMNT INTO FUNCTIONAL FEATURES AND SPECIFICATIONS) DESIGN REQUIREMENT TRANSLATED INTO DESIGN ATTRIBUTES AND ENGINEERING MEASURES PART DEPLOYMENT AND CHARACTERISTICS PROCESS PLANNING- OPERATIONAL STEPS AND MEASURES OPERATIONAL TASKS,MEASURES,CONDITIONS CONTROLS DEPLOYED THRU PRODUCT PLANNING, PART DEVELOPMENT,PROCESS PLANNING,PRODUCTION PLANNING,SERVICE PLANNING VARIOUS DEGREES OF PLANNING INVOLVED IN QFD INCLUDE: -PRODUCT PLANNING -PART DEVELOPMENT -PROCESS PLANNING -PRODUCTION PLANNING -SERVICE PLANNING -
LEVELS OF CUSTOMER EXPECTATION

BASIC FUNCTIONAL EXPECTATIONS PERFORMANCE EXPECTATIONS SERVICE EXPECTATIONS INVESTMENT PROTECTION EXPECTATIONS MINIMISED COST OF OWNERSHIP EXPECTATIONS
QFD PROCESS

REQUIRES THAT COMPANY ADOPT A CUSTOMER ORIENTED PHILOSOPHY QFD HAS MULTIPLE MATRICES FOR TRANSLATRING CUSTOMER NEEDS INTO PRODUCT REQMNT AND SYSTEM SPECS PHASES EMPLOYED ARE: -CONVERTING CUSTOMER REQMNT INTO TECHNICAL REQMNT -CONVERTING TECHNICAL REQMNT INTO CHARACTERISTICS OF KEY PARTS OF PRODUCT -CONVERTING CHARACTERISTICS OF KEY PARTS INTO THE PROCESS TO MFG OF THESE PARTS -CONVERTING CHARACTERISTICS OF THE MFG PROCESS INTO DETAILED PRODN PROCEDURES AND CONTROL METHODS 1 CUSTOMER REQUIREMENT TECHNICAL ATTRIBUTES -CUSTOMER PERCEPTIONS -ENGINEERING MEASURES 2 DESIGN MATRIX -TECHNICAL ATTRIBUTES -PRODUCT FEATURES MEASURES 3 OPERATING MATRIX PRODUCT FEATURS -PROCESS STEPS MEASURES -PROCESS STEPS 4CONTROL MATRIX -PROCESS STEPS OPERATIONAL TASKS,CONDITIONS,CONTROLS MEASURES
IMPLEMENTING THE QFD PROCESS-SEQUENCE OF ACTIONS OBTAIN CUSTOMER NEEDS AND PERCEPTIONS
TRANSLATE CUSTOMER NEEDS INTO PRODUCT/ SYSTEM REQMNT & SPECS MEASURES OF CUSTOMER NEEDS ARE TRANSLATED INTO DESIGN ATTRIBUTES AND ENGINEERING MEASURES DESIGN ATTRIBUTES ARE TRANSLATED INTO PRODUCT/SERVICE FEATURES REQUIRED FEATURES ARE BASED DIRECTLY ON MEASURES OF CUSTOMER NEEDS FEATURES ARE THEN USED TO DEFINE PROCESSES AND OPERATING CONDITIONS THAT ARE REQUIRED TO DELIVER VALUE TO CUSTOMER CONTROLS ARE DEFINED FOR OPERATING CONDITIONS HOUSE OF QLTY DESIGN MATRIX OPERATING MATRIX CONTROL MATRIX
BENEFITS OF QFD
PROMOTES BETTER UNDERSTANDING OF CUSTOMER DEMANDS AND COMPLAINTS AND SIMPLIFIES REMEDIAL ACTION PROMOTES BETTER UNDERSTANDING OF DESIGN INTERACTIONS INVOLVES MFG IN DESIGN PROCESS IMPROVES DOCUMENTATION OF DESIGN AND DEVELOPMENT PROCESS REDUCES NUMBER OF ENGG CHANGES BRINGS NEW DESIGNS TO MARKET FASTER REDUCES OVERALL COSTS OF DESIGN AND MFG FACILITATES IDENTIFICATION OF CAUSES OF CUSTOMER COMPLAINTS AND MAKES IT EASIER TO TAKE PROMPT ACTION INCREASES CUSTOMER SATISFACTION USEFUL TOOL FOR IMPROVING PRODUCT QLTY MINIMIZES REJECTS AND REWORK MINIMIZES CUSTOMER CLAIMS SUBSTANTIALLY
BENEFITS OF QFD
INREASES THE ASSURANCE OF MEETING VOICE OF CUSTOMER WITH A NEW PRODUCT PROVIDES A MECHANISM TO TARGET SELECTED AREAS WHERE COMPETITIVE ADVANTAGE WOULD HELP INCREASE MARKET SHARE QFD REDUCES NUMBER OF ENGG CHANGES AS WELL AS ENGG COSTS IDENTIFIES CONFLICTING DESIGN REQUIREMENTS FOCUSES COMPANY ACTIVITIES ON CUSTOMER ORIENTED OBJECTIVES REDUCES PRODUCT DEVELOPMENT CYCLE REDUCES COST OF ENGG , MFG AND SERVICE IMPROVES QLTY OF PRODUCTS AND SERVICES
SMED(SINGLE MINUTE EXCHANGE OF DYES)
Traditional Setup Practices

Material movement occurs after the machine is turned off.
Completed products are transferred to next operation. Raw material is moved after the machine is stopped.
Detection of defects or missing equipment is noticed when the machine is running.
Setup tooling delivered after the changeover has begun. Defective product identified after internal setup has begun.
Defective tooling, fixtures, setup instruments are noticed after the machine is turned on.
The operator notices that equipment is missing after internal setup has begun.
474
WHAT IS SMED
MEHOD DEVELOPED BY SHINGO AIM OF APPLYING SMED METHODOLOGY IS TO SYSTEMATICALLY REDUCE TIME LOST IN PRODN FOR MACHINE SETUPS FROM HOURS TO MINUTES APPLIES TO ALL PRODN ACTIVITIES AND IS AN IMPORTANT INITIATIVE IN THE LEAN MFG AREA VERY RELEVANT IN THE DAYS OF INCREASED REQUESTS FOR CUSTOMISED PRODUCTS AT SHORT NOTICE SMED LEADS TO REDUCED LEADTIMES
Definition of Changeover Time

The time taken from the last good product on one run to the first good product on the next run.
The Best Setup is
No Setup
477
Setup reduction methodology

Many key ideas developed by Shigeo Shingo Shingo called it SMED Single minute exchange of dies Means single digit, i.e. Less than 10 minutes Example: 1000-ton press Before: 4 hr After: 3 min Improvement: 98.7%, or a factor of 80
478
Set-up time Reduction

Why do set-up reduction activities? Lower set-up times More frequent set-ups Smaller batch sizes Shorter lead times
Competitive advantage
How will Quick Changeover help to improve our process?

A reduction in changeover time gives us :
a reduction in inventory a reduction in leadtime a reduction in waste and improvements in yield and quality
Quick Changeover techniques will make us more competitive in a marketplace which is becoming more and more demanding.
Setup reduction
Typical setup activities
Prepare Attach machine parts Measure, center Adjust 30% 5% 15% 50%
481
BATCH CHANGEOVER ACTIVITIES

IN CLASSICAL CHANGEOVER BETWEEN TWO BATCHES THE FOLLOWING ACTIVITIES TAKE PLACE: -FINISH ACTUAL BATCH -DISMOUNT OLD TOOLS -STOP MACHINE -CHANGE TOOLS -ADJUST MACHINE TO NEW REQMNT -START MACHINE -TRIALS -PROCESS NEW BATCH CHANGEOVER SEQUENCE GENERALLY DONE WITHOUT STD METHOD OR PROCEDURES AND DURATION DEPENDS ON INDIVISUAL SKILLS CHANGEOVERS CAUSE PRODUCTIVITY LOSS AND CREATES TEMPTATIONS FOR LARGER EBQ
4 Main Stages of Changeover

Adjust Setting -ments Change
Actual
Prep
Typical Setup Process:

Operation
Preparation (before & after) checking dies, jigs, raw material, Removing blades, jigs, and mounting fresh ones,( ink, sleeve) Centering, setting parameters circulating water, pressure) Trial runs and final adjustments
portion of Time 30%
5%
15%
50%
APPROACH OF SMED
SETUP TIME REDUCTION IS OF CRUCIAL IMPORTANCE FOR PROFITABILITY APPROACH OF SMED IS TO REDUCE OUTPUT AND QLTY LOSSES DUE TO CHANGEOVER SMED APPROACH IS RECOMMENDED BY JIPM TO REDUCE SETUP LOSSES
EMPLOYEE PARTICIPATION IN MANAGEMENT
Continuum of Employee Participation
No Involvem ent
Receive Informati on
Joint Consultati on
Joint Employe Decision- e Control Making
Source: Blyton and Turnbull
Linkages within High Performance Work Systems

HR Practices and operating systems designed and bundled to enhance Ability Motivation Opportunity
Expanded employee potential and increased discretionary effort
Improved company performance
Improved systemic response to employee effort
Improved worker outcomes
Supportive company, industry and societal context
Employee Involvement
Employee Involvement includes:
Teamworking (including self-managing teams) Team Briefing Downward communications Two-way communications Suggestion schemes Problem-solving groups Financial participation (includes profit sharing schemes and ESOPs)
And Engagement?
Engagement is an idea whose time has come.it represents an aspiration that employees should understand, identify and commit themselves to the objectives of the organisation they work for..(however).HR professionals need to recognise that engagement is a strategic issues that cannot simply be left to manage itself (CIPD 2005, 2006)
An illustration of the assumed links between engagement and other factors is contained on the next slide
Opps for upward feedback
Employee Engagement
Feeling informed
Engagement
Mgt commitment to organisation

Managers fairness re: issues
Performance
Intention to Stay
Treating employees With respect
What Does Evidence Tell Us?

Management control involvement on managements terms? Emphasis on top-down communications unitarist More communication and consultation far less negotiation Is management listening? Management cultures is knowledge still power?
CREATIVITY BASED TECHNIQUES
New Challenge
A company manufactures glassware. The last step of the process is to wrap glasses individually in used newspapers and then place them in a specially designed box. The box is then sealed. Management notices low productivity with this last step, observing that workers occasionally stop to read the newspapers? What can management do to increase productivity?
Envisioning Techniques
Linear
step-by-step; scenario planning, etc.
Intuitive
brainstorming
Stimulants to Work Creativity*

1) FREEDOM in deciding work to do or how to do it 2) CHALLENGE to work hard on important projects 3) RESOURCES needed to do the work 4) ENCOURAGEMENT from a supervisor who is a good work model, sets appropriate goals, supports and has confidence in the work group 5) WORK GROUP SUPPORTS such as diverse skills, people who communicate well, are open to new ideas, constructively challenge one anothers work, trust and help each other, and feel committed to their work 6) ORGANIZATIONAL ENCOURAGEMENT in a culture that supports creativity and communicates a shared vision of organization
Obstacles to Work Creativity

1) ORGANIZATIONAL IMPEDIMENTS such as internal political problems, harsh criticism of new ideas, destructive internal competition, avoidance of risk and overemphasis on the status quo 2) WORKLOAD PRESSURES such as extreme time pressure, unrealistic expectations, or distractions
CREATIVE PROBLEM SOLVING
500
CREATIVE PROBLEM SOLVING
What is creative problem solving?
501
Some Additional Thoughts

The creative person uses information to form new ideas. The real key to creative problem solving is what you do with the knowledge. Creative problem solving requires an attitude that allows you to search for new ideas and use your knowledge and experience. Change perspective and use knowledge to make the ordinary extraordinary and the usual commonplace.
502
DEFINITION
Creative problem solving is - looking at the same thing as everyone else and thinking something different.
503
LETS TALK ABOUT:
z Why dont we think creatively more often? z What are the barriers that get in our way?
504
BARRIERS THAT GET IN OUR WAY

Time Why change? Usually dont need to be creative Habit Routine Havent been taught to be creative
What are some other barriers that get in our way?
505
MENTAL BLOCKS
Mental blocks are reasons (attitudes) why we dont think something different.
506
CREATIVE PROBLEM SOLVING PROCESS

STEP 1. State what appears to be the problem.
The real problem may not surface until facts have been gathered and analyzed. Therefore, start with what you assume to be the problem, that can later be confirmed or corrected.
507

STEP 2. Gather facts, feelings and opinions.
z What happened? z Where, when and how did it occur? z What is its size, scope, and severity? z Who and what is affected? z Likely to happen again? z Need to be corrected? z May need to assign priorities to critical l elements.
508

STEP 3. Restate the problem.
The real facts help make this possible, and provide supporting data. The actual problem may, or may not be the same as stated in Step 1.
509
STEP 4. Identify alternative solutions.

Generate ideas. Do not eliminate any possible solutions until several have been discussed.
510
STEP 5. Evaluate alternatives.
z Which will provide the optimum solution? z What are the risks? z Are costs in keeping with the benefits? z Will the solution create new problems?
511
STEP 6. Implement the decision!

z Who must be involved? z To what extent? z How, when and where? z Who will the decision impact? z What might go wrong? z How will the results be reported and verified
512
STEP 7. Evaluate the results.

z Test the solution against the desired results. z Make revisions if necessary.
513
TOOLS & TECHNIQUES

BRAINSTORMING Purpose: To generate a large number of ideas in a short period of time.
514
Brainstorming
Getting Ideas Before You Write
To successfully compete organizations will need to:
Increase the number and quality of their innovations Select the most competitive innovations from the pool of generated options
What is brainstorming?
Brainstorming is a means of generating ideas. Brainstorming can be used to identify alternatives, obtain a complete list of items and to solve problems. There are a variety of brainstorming techniques. The common principle of brainstorming is to set aside the restrictive thinking processes so that many ideas can be generated.
517
Creativity is ...
A state of doing, not being

If you want to be creative you need to do creative things
Brainstorm - What is it?
A sudden inspiration, idea, or plan.

(Webster)
You can use brainstorming in a project when:
When to use brainstorming?
Developing the solution definition, particularly in identifying alternative solutions. Identifying all potential risks on a project. Developing the Work Breakdown Structure (identifying all the deliverables and work items). Dealing with difficult problems that arise during the course of the project.
520
BRAINSTORMING
Rules for Brainstorming:
The more ideas the better! No discussion No idea is a bad idea Build on one anothers ideas Display all ideas
521
Brainstorming
Principles for generating ideas
have clearly defined subject try to maintain criticism free setting when ideas generated,
ideas flow freely, not be hampered by critical comments or attacks from other group members
all ideas receive approval

or neither praised nor criticized
Brainstorming
Principles for generating ideas
related atmosphere sufficient time small group leader or not?
Brainstorming can:

Why use brainstorming techniques?
break through traditional thinking about a problem. generate new ways of thinking. provide an environment for building on new ideas. reduce the tendency to prematurely discard new ideas. facilitate team building. encourage team problem solving.
524
The brain storming process has two fundamental stages:

Divergence, or generating ideas & Convergence, or evaluating ideas.
DIVERGENT V/S CONVERGENT THINKING
Creativity flourishes when divergent thinking is separated from convergent thinking.
Tools for Brainstorming Use the divergent rules to create and capture these ideas:Brainstorming
Goals in Idea Capture
Create as many ideas as possible Get input from as many good minds as possible
Goals in Idea Analysis

Select right ideas Analyze ideas
Step 1: Defining the problem

What is the paradigm that you are working with??
What you think is the problem, is probably not the problem.

Generate lots of problem statements - dont try to solve the problem right away, rather try to solve the right problem. This step is probably the most important:
if this is done poorly all the work following this is irrelevant.
Step 2: Planning
The basic questions you should consider before doing a brainstorming session: Who should I invite to participate ?
When should I hold the meeting?

Where should I hold the brainstorming session ? Why should I use Brainstorming?
And
What should I brainstorm?
Following answering those questions you must consider:
How should I do the Brainstorming session?
In identifying the right people for Brainstorming consider including whom??:

Users of the product
Customers/sponsors
Potential Team participants

Open and creative individuals
Subject Matter Experts, Generalists
Step 2: Why it is critically important to involve the users??: The Railway Paradox Problem Statement: When railroads are asked to establish new stops on the schedule, they study the requirements, by sending someone to the (requested stop) at the designated time to see if someone is waiting for the train. Of course, nobody is there because no stop is scheduled, so the railroad turns down the request because there is no demand.
Step 2: Conclusion:
Decision makers must talk to the ultimate users of the product to establish the true need for the product or the improvement.
Step 2: Planning: Why should I use Brainstorming??
Brainstorming is used to examine all the options available needed to solve the defined problem
It is used to help ensure that you are solving the problem in the best manner possible.
Step 2: Planning: When should I hold the

meeting?
Select a time that is not in time conflict with other activities Hold the Session only after the Problem has been defined Chose a time and duration that can accommodate the Participants
Participants should not be under time pressure in doing a brainstorm
Do not allow interruptions

People leaving the meeting to do something urgent No phone interruptions
Step 2: Planning:What should I brainstorm?
A clear and written definition of the real problem. Set criteria and their importance
Step 3: Conducting Brainstorming Session

Techniques to Improve Quality of Brainstorming Session Output
Basic Rules in How to Conduct a Brainstorming Session
Make sure the team understands and agrees to the problem at hand. Select a discussion Leader (Facilitator) Select a scribe whose job is to write without censorship ideas given by participants. Lay down the rules of divergent thinking.
No criticism, no negative reactions, etc (see below) No Analysis of the ideas Be patient with silence Allow mutation and growth of ideas
Basic Rules in How to Conduct a Brainstorming Session How do you know you are doing the right thing? Heres a summarycheck list.
No criticism or debate of ideas Let the imagination soarthe wilder the idea the better Need for a safe uncritical and friendly meeting Be patient with silence Test: if no one is laughing, it is not a good session Go for quantity (but dont go hog wild either) Mutate and combine ideas (build not destroy) Do your brainstorming in a manner suitable for you and your team but observe the basic rules! Only Later Concentrate ideas to manageable number using methods
Hints on Open your mind to new ideas

When you always do what youve always done, you always get what you always got. - Socrates
How else can I do this?

What If? How can I use something that doesnt fit with this at all? Careful, cautious people, always casting about to preserve their reputations, can never effect a reform. Susan B. Anthony
What if you get stuck? What should I do??

Forced Connections
When your mind goes blank try selecting an unrelated word, object or picture and ask,
When you look at this ____, what ideas do you get for how to solve the problem
Scamper
Ask yourself, what might you substitute, combine, adapt, magnify/minimize, put to other uses, eliminate, or reverse.
Gap Analysis
How many gaps can you fill/eliminate/simplify?
Analyzing Results of Brainstorming Session: Making the final list. Methods used:
Voting with a threshold All participants are given 5 votes (say)
Participant can vote any way they want for the posted ideas Idea with most votes from group gets included This cycle could be repeated with a second thresholding vote
Voting with campaign speeches

Give (say) 3 votes per person. Tally all votes. Ideas with 1 or more votes get considered. Select a person who did not vote for the idea to promote the idea (positively) Repeat voting after the speeches Ref: D.C Gause & G.M
Weinber: Exploring Requirements: Quality before Design
Creativity Promoting Environment

Freedom To approach the work or problem in ones own way. Challenging Work The individuals skills are challenged. Sufficient Resources Access to data or the ability to create it. Sufficient time to do the work
Supervisory Encouragement of Creativity Acceptance of dumb ideas Acceptance of mistakes Supportive Work Group Peer support and acceptance Culture of acceptance of new ideas Organizational Encouragement of Creativity
Factors that shape climate:Obstacles to Creativity

Organizational Impediments
Structure of organization Not allowed to make a mistakemust always look good Idea stealing by superiors or peers Business Culture
Bottom line is all important Quarterly Financial Report must look good Short term focus vs long term view Risk aversion Politics of organization
Workload Pressures (individual, team, organization)

We dont have time for that. But some how we all have lots of time to do the work over and over again !!!
Right Braining
Use of drawing to spur right-brain artistic ideas Establish the important attributes of what you want to design visually or graphically Sketch (quickly) each attribute Then, pair randomly the various individual pictorial attributes Continue until all attributes are included.
Ref: D.C Gause & G.M Weinber: Exploring Requirements: Quality before Design
Right Brain Methods

Right side of brain: visual, graphical Left side of brain: verbal, analytical All ideas so far are largely left brain ideas Techniques:
Use mapping tools: sketches, drawings, maps, cartoons, etc.
Ref: D.C Gause & G.M Weinber: Exploring Requirements: Quality before Design pg 123
Braindrawing
Use pictures sketches etc to capture ideas Does not use words in description
Ref: D.C Gause & G.M Weinber: Exploring Requirements: Quality before Design
Delphi Method 1
Process 2:
Questionnaire is distributed to the members. Each member jots down as many ideas as possible All items are collected and redistributed by the coordinator to the participants. They again add to the ideas or modify by variation. This continues until a stable set of ideas result.
Problem
very expensive, time consuming and tainted by peer influence
(1) Rand Corp late 1960s (2) P H Francis: Principles of R&D Management pg 169
Setting the scene

Explain the brainstorming technique. Specify the rules. Loosening up: use a free thinking exercise and/or a practice brainstorming session*. For example: how could safety of taxi drivers be improved?
* The facilitator provides exercises and determines when the participants are ready to proceed with the technique.
549
BRAINSTORMING GUIDELINES
Remember Creative Thinking
1. Practice question: How Do We Motivate Our Local Optimist Club Members?

Re-state the question to keep the process going
What did you mean by that?!!!
2. Clarify understanding. Once all the ideas have been generated (it may take approximately 5 to 6 minutes), review ideas offered.
550
BRAINSTORMING GUIDELINES
Lets combine ideas!!!
3. Combine items that are similar and/or eliminate duplicates.
Are we done yet?
4. Completion.
551
MIND MAPPING
Definition : A visual picture of a group of ideas,
concepts or issues.
Purpose :
Unblock our thinking.
See an entire idea or several ideas on one sheet of paper. See how ideas relate to one another. Look at things in a new and different way. Look at an idea in depth.
552
Limitations
Brainstorming
discussion generally succumbs to influence of few individuals due to status, personality & other forces
Post idea generation

analysis is separate function, apart from idea generation ranking of ideas by group members task force to review suggestions & make recommendations group leader to choose
NOMINAL GROUP TECHNIQUE
What is NGT?
Basic process:
Team members silently write down ideas Ideas are shared and discussed Team members vote
Nominal Group Technique (NGT)

nominal refers to process in which individuals are together in a group,
in name only since verbal exchange is excluded or limited
reflects silent and independent generation of ideas
Why use NGT?

Helps eliminate biases and peer-pressure Encourages participation from all team members All opinions are heard and weighted equally
What inhibits people?

They dont want conflict. They dont want to be criticized.
Advantages
More unique ideas More participation Members have greater sense of contribution Time-efficient Better decisions Productive
Disadvantages
Addresses only one problem at a time Mechanical Requires preparation Hard to combine ideas at the end for even better output
Best to use NGT when

Some members are very vocal. People work better in silence. Some members are reluctant to participate. There is concern that enough ideas will be generated. Some participants are new to the team. The issue is controversial and the discussion could become heated.
Stages
Preparation
Introduction Idea Generation
Idea Sharing
Discussion Voting/Ranking
Preparation
A team is assembled to include participants from varying areas. Materials needed:
Pen and paper for each member Flip chart Markers Tape Sticky notes (optional)
Preparation: members
Members can be heterogeneous, unlike a focus group
heterogeneous groups can be more creative there can be communication difficulties
individuals should be able to speak a common language
if have doctors and patients, doctors should not use medical jargon could have a variety of social scientists
Preparation: members
members in an NGT should be
interested in the problem have either experience or education which makes them a resource to the group flexible so they can openly explore various points of view
selection bias
if suspect, try a different mixture of participants in future groups
Introduction
A facilitator introduces themselves, explains the NGT process. The key problem or question is presented, explaining the purpose of the meeting. Telling team members about problem sooner allows them to come prepared.
Introduction
Role of Facilitator: A facilitator is chosen from among group members. Their responsibilities include:
Helping group avoid conflict Encouraging participation Keeping time Facilitating rounds Recording ideas
Idea Generation
Individuals silently and independently write down as many ideas as possible during pre-determined time period. (usually 10 minutes)
Idea Sharing
There are various approaches to idea sharing, but the same principles apply:
Everyone has equal chance to share their ideas All ideas shared are recorded on flip chart, except repeat ideas There is no discussion during this stage
Discussion
c Now ideas are disussed. Members can ask for details or clarification. The purpose is clarification not changing peoples opinions. Ideas are not eliminated. Ideas can be re-worded.
Discussion
Facilitator tries to keep all members involved, continue the flow of discussion, and not get caught on any point for too long. This phase typically lasts 3040 minutes.
Discussion
If there are many ideas (over 40), there can be an elimination stage before voting. Members can choose to eliminate their own ideas, or combine ideas together. Alternatively, idea elimination can require approval by all members.
Voting/Ranking
Voting or ranking determines the NGTs output. Facilitator should number the ideas to make voting easier. Members either vote anonymously, with the facilitator totaling points, or they can publicly write their votes on the flipchart.
Voting/Ranking
Voting method 1: Members can vote for ideas based on a chart like the following:
Number of ideas Less than 20 20-35 Over 35 Number of votes 4 6 8 Value of votes 1, 2, 3, 4 1, 2, 3, 4, 5, 6 1, 2, 3, 4, 5, 6, 7, 8
Points for each idea are totaled after all members vote.
Voting/Ranking
Voting method 2: Members rank all ideas, with the highest number as the most favored idea. Points are totaled after all members rank ideas. The idea with the most points wins.
Voting/Ranking
If the top 5 ideas are all within several points of each other, a second round of votes will best determine the real winner. Repeat the voting stage using only the top 5 ideas.
Visibility
Throughout the process, all charts should remain visible. Tape them to the walls around the room.
Example of NGT
The faculty at X-University is concerned that the students are not getting internships and jobs. A team is created involving faculty, students, and recruiters. The goal is to identify the cause of this problem. After this NGT process, the faculty will create an action plan based on the outcome.
Example of NGT
Statement of Problem: Why arent students getting internships and job offers?
Example of NGT
Individual idea generation:
The job market is slow. Poor interview skills. Theyre not networking.
Not enough recruiters come. Their resumes are weak. Students are unwilling to relocate. Students are unprepared. No internships prevents them from getting jobs later on. The career fair is not productive. Everyone wants to stay instate.
Example of NGT
Idea Sharing:
Example of NGT
Discussion:
Should we combine unwilling ness to relocate with students wanting to stay instate?
Is the career fair not productive because there are too many people or too few? Can we re-word that to say, There arent job opportunities through the career fair?
What do you mean by poor interview skills? Does that include lack of training?
Example of NGT
Idea # Rank
Voting/ranking:
1. Unwilling to relocate 2. Poor interview skills 3. Weak resumes 4. Career fair doesnt offer very many job opportunities 5. Students arent networking. 6. Not enough recruiters. 7. Bad job market
3
4 7 2 1 5 6
7
6 5 4 3 2 1 Idea # 1 Rank 3+1+1=5 4+2+3=9 7+6+7=20 6+3+6=15 2+4+2=8
List of ideas
Individual rankings Combined points
2 3 4 5
6
7
1+5+4=10
5+7+5=17
Definition:
In summary: NGT allows groups to reach optimal solutions by generating ideas privately, sharing ideas, discussing, and voting. It eliminates biases and groupthink. Members can participate equally with less intimidation. Try using NGT for your organizations future questions and challenges.
Advantages
different group processes for independent idea generation, feedback & voting increased attention to each idea increased opportunity for each individual to assure her or his ideas are heard avoids arguments & extraneous interactions
Limitations
cross-fertilization of ideas diminished because of structure imposed by NGT
reduced flexibility,
structure is imposed on meeting
puts people on the spot to produce something
composition of group is important, need minimal level of education

bringing people together may be cost-prohibitive, but consider the use of video or web-conferencing
SYNECTICS

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PRODUCTIVITY TECHNIQUES

ASSET ENERGY SUSTAINABILITY INDEX

SOURCE ANNUAL REPORT OF HERO HONDA 2009-2010

PARTIAL PRODUCTIVITY ADVANTAGES

PARTIAL PRODUCTIVITY DISADVANTAGES

PROBLEM WITH TRADITIONAL LABOR PRODUCTIVITY

PROBLEM WITH TRADITIONAL LABOR PRODUCTIVITY

TOTAL FACTOR PRODUCTIVITY

EXAMPLE OF TOTAL FACTOR INDEX

ADVANTAGES OF TOTAL FACTOR PRODUCTIVITY

DISADVANTAGES OF TOTAL FACTOR PRODUCTIVITY

ADVANTAGES OF TOTAL PRODUCTIVITY

DISADVANTAGES OF TOTAL PRODUCTIVITY

AMERICAN PRODUCTIVITY CENTRE MODEL

APPLICATIONS OF PRODUCTIVITY TECHNIQUES

AREAS OF PRODUCTIVITY TECHNIQUES

AREAS OF PRODUCTIVITY TECHNIQUES

CAUSES OF POOR PRODUCTIVITY

MATERIAL BASED PRODUCTIVITY TECHNIQUES

PEOPLE BASED PRODUCTIVITY TECHNIQUES

PRODUCT BASED PRODUCTIVITY TECHNIQUES

TASK BASED PRODUCTIVITY TECHNIQUES

ILO APPROACH TO PRODUCTIVITY IMPROVEMENT

REDUCTION IN INEFFECTIVE TIME

SURVEY RESULTS ON PRODUCTIVITY

COMMON MFG RATIOS

COMMON SERVICES RATIOS

HARD METRICS IN PRODUCTIVITY

SOFT METRICS IN PRODUCTIVITY

SUMANTHS TOTAL PRODUCTIVITY MODEL

IMPLEMENTATION PROCESS FOR TOTAL PRODUCTIVITY MGT

STEP 1 MISSION STATEMENT

FACTORS TO BE CONSIDERED IN MISSION STATEMENT

CHARACTERISTICS OF GOOD MISSION STATEMENT

STEP 2 TPM ANALYSIS

STEP 3 MANAGEMENT GOALS

STEP 4 FISHBONE ANALYSIS

Cause-and-Effect Diagram for Manufacturing

STEP 5 ACTION PLANS

STEP 6 PRODUCTIVITY QUALITY TEAM TRAINING

STEP 7 IMPLEMENTATION OF ACTION PLANS

STEP 8 MGT GOALS ACHIEVED

STEP 9 TOTAL PRODUCTIVITY GAIN SHARING

STEP 10 NEW GOALS

HOW PRODUCTIVITY CAN BE IMPROVED

BENEFITS OF TOTAL PRODUCTIVITY MGT

Shoichiro Toyoda President, Toyota

1995 Corel Corp.

These are things the customer is NOT willing to pay for.

MUDA MURI MURA

Common Causes of Waste

Common Causes of Waste

Defectives - Rework or Replace

Where is the Waste?

Transportation poor layout, poor flow

All processes have waste.

Types of Waste (Muda) in Toyota production system

Overproduction Waiting Transportation Inventory Motion Overprocessing Defects

TRANSPORTATION AND MATERIAL HANDLING

ROOT CAUSE OF TOYOTA WASTES

ROOT CAUSE OF TOYOTA WASTES

REMEDIES FOR TOYOTA WASTES

TOTAL WASTE REDUCTION