Manufacturing Strategy MGSC 602 Prof' Saibal Ray

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Manufacturing StrategyMGSC 602Prof. Saibal Ray

• Module 1 - Designing, Managing and Improving
  Operations Processes
• Module 1 Introduction
• Handout 2
• Session 2

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Types of Processes explored in this module

• Elemental Processes
• Grinding
• Hamburger Grilling
• Data-Entry
• Bypass-graft operation
• Compound Processes combine elemental processes
• Gearbox production process
• Fast-food production
• Insurance policy setup
• Heart disease treatment

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Other Levels of Processes not addressed
explicitly in this module

• Coordinative and Business Processes
• Marshall the flow of work and information in
  compound processes
• - How much, when, where, by whom, and how
• Order fulfillment process, capacity management
• Managerial Processes
• Capital investment appraisal process
• Employee development process
• Process of deciding on acquisitions

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Types of Processes
Managerial Processes (e.g. Capital Investment
Process)
Business Processes (e.g. Order-to-Delivery
Process)
Compound Processes (e.g. Gearbox Production)
Focus of this module
Elemental Processes (e.g. Drilling)
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Common Tools of Process Improvement

• Process Mapping
• Structured Brainstorming
• Plan-Do-Check-Act
• The Five Whys
• Pareto Chart
• Process Control Chart

• Poka-Yoke (Failsafing)
• Design of Experiments
• Scatter Diagrams
• Fishbone (Cause-and-Effect) Diagram
• and many others

• Many of these were covered in preliminary courses
• We will review a few of them quickly, since they
  are useful in a number of the cases

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1. Process Mapping Understand the overall
process(also a great way to learn about an
operation!)

• Identify Key People who work with the process
• Determine the part of the process to be mapped
• What is the scope?
• Decide what to include on the map
• Customers and suppliers?
• Number of employees involved
• Total process time
• Duration of each step
• Information inputs and outputs
• Location of work

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Process Mapping (continued)

• Start with high-level Blocks then drill down
  to process elements if necessary
• Keep a list of process improvement suggestions
  that arise during the mapping process
• Keep the maps up-to-date
• Key questions
• What are the obvious weaknesses?
• What is the overall process designed to do well
  is this the right thing to focus on?
• How would I carry out this process with no
  constraints (blue sky view)?
• How should the performance of the process be
  measured?

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2. Structured BrainstormingGenerating Ideas

• Get the right set of people together and decide
  on one issue (e.g. What is causing the recent
  spate of assembly errors?)
• Encourage broad participation (shop-floor
  people in particular) and keep track of all the
  ideas
• When the session starts to exhaust itself, begin
  combining similar ideas and labeling them
• N/3 voting method N is the number of ideas
• Give each member of the team N/3 votes
• Go around the room once and record votes for the
  most important/significant causes
• Prioritize ideas/issues

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3. Fishbone DiagramStructuring Ideas

• Used to capture and categorize causes and effects
  during/after a brainstorming session
• Define the Problem, Effect or Symptom to be
  explained
• Look at major categories of potential causes e.g.
• Machine location
• Maintenance issues
• Design problems
• Measurement systems

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Fishbone Diagram (continued)
Increase in Number of Untrained New People
Minor Breakdowns not captured
Training
Measurement System
Recent Machine Breakdown Problem
Maintenance
Product
Lack of Scheduled maintenance
Unresponsive Unscheduled Work
Poor Quality of Stampings
New Product
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Fishbone Diagram (continued)

• Identify sub-categories
• Look carefully at the causal relationships try
  to identify the relationship between the various
  factors
• Identify candidate root causes of the problem
• Confirm the root causes by
• Collecting data to identify a relationship
• Removing the cause (if possible)
• Measuring the results of corrective action

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4. Pareto ChartEvaluating Importance

• Primary Use Prioritizing causes
• Decide on the problem you need to address
• - Example Late Jobs
• Develop a measure that represents contribution
  of each identified cause to the overall problem
• - Example , or
• Decide on an appropriate study period or sample
  size

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Pareto Chart (Continued)
Cause of Late Jobs (Sample of 1000 shop orders,
11/97-12/97)
Other
Rework
Missing Parts
M/C Failure
Over-promising
Incorrect Item Made
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5. Scatter diagramLearning about relationships

• Way of exploring the relationship between a
  candidate cause and the problem/effect
• Useful for complex processes where cause-effect
  relationship is unclear

Strength of Joint
Amount of adhesive added
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6. Control Charts

• Time-ordered plot of sample statistics
• Has Control Limits (LCL, UCL)
• Limits are set typically at /- 3?
• (in general /- z?, based on the trade-off
  between the cost of allowing defects to pass and
  the cost of sampling)

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Control Charts (Contd.)

• Some Managerial Decisions
• At what points in the process to use control
  charts?
• What should be the sample size?
• What type of control chart to use?

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Module Background

• Process Management is changing
• - Process life cycles are shorter and much more
  dynamic
• - Much more operator involvement
• - Need for process capability to provide
  strategic flexibility
• Primary challenge
• - Rapid accumulation of knowledge and proper use
  of that knowledge to foster process improvement
  and capability development

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Focus of Module

• Primary Focus on
• Improvement of existing processes (rather than on
  the development of new processes)
• Single Operating Unit
• Adverse organizational contexts for process
  improvement
• Emphasis on the action to be taken by the
  operations manager

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• Single Product Processes
• Cummins Engine San Luis Potosi
• Display Technologies Inc.
• Corning Glassworks The Z-Glass Project
• Deutsche Allgemeinversicherung (DAV)
• Massachusetts General Hospital (MGH)
• Istituto Clinico Humanitas
• Solagen
• Multi-Product Processes Process Flexibility
• McDonalds Corporation
• Stermon Mills

Increasing Degree of Process Change
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Major Themes

• Designing Processes for Improvement
• Anticipating that a process will be subsequently
  improved
• Managing Processes
• Taking action that integrates operational,
  strategic and technical viewpoints
• Harnessing operator involvement and learning
• Improving Processes
• Building Process Knowledge
• The Four Levels of Process Improvement Action
• Understanding and Improving Process Flexibility

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Some Driving Questions

• What actions should managers take to foster rapid
  process improvement?
• How does operations improvement change industry
  structure?
• How can managers grapple with challenges of
  formulating effective operations strategy in a
  rapidly changing environment?
• How should managers balance the need for a stable
  process with the need to improve it?
• What is flexibility and how can it be managed?