PRODUCTIONSOPERATIONS MANAGEMENT

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Management of Quality Quality Tools Part 2
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Total Quality Management

• A philosophy that involves everyone in an
  organization in a continual effort to improve
  quality and achieve customer satisfaction.

T
Q
M
100 commitment to quality, 100 of the time,
in 100 of what is done Also a commitment to
continuous improvement
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Continuous Improvement

• Philosophy that seeks to make never-ending
  improvements to the process of converting inputs
  into outputs.
• Kaizen Japanese word for continuous
  improvement.

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Continuous Improvement
Good Enough Is Never Good Enough
Deming
Innovatively change fundamental processes,
products, and policies to better meet current and
anticipated customer expectations.
Relentlessly pursue reducing variation in
everything you do.
Never stop improving.
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One Model For TQM
Total Involvement
Focus On Customers
TQM
Process Improvement (tools)
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One Model For TQM
Total Involvement
Focus On Customers
TQM
Process Improvement (tools)
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Customer??
Who is the CUSTOMER?
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Customer Identification
Who is my customer?
How do I measure satisfaction?
Student
Course Evaluations
Parent
No Complaints
Scholarship Supplier
More Funding
Advancement
Military
Ohio
Contribution
Employer
Advancement, Return for More
Society
Contribution
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Customer
Direct Recipient of Goods Or Services Internal
Customers
Ultimate Recipient of Goods Or Services External
Customer
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Babich Quality Study
- It is five times as costly to recruit a new
customer than to keep a current one. -
Dissatisfied customers generally tell 8 to 20
people about their dissatisfaction. - Satisfied
customers generally tell only 3 to 5 people.
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The TQM Approach

• Find out what the customer wants
• Design a product or service that meets or exceeds
  customer wants
• Design processes that facilitates doing the job
  right the first time
• Keep track of results
• Extend these concepts to suppliers

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Understanding Customers
Level 3 Focus Groups, Designed Surveys, Interviews
, Mystery Shoppers
High
Level 2 Service Desk Sales - Customer Hot Lines
Reps. Unstructured
Surveys
Level of Understanding
Level 1 Unsolicited Complaints
Low
Reactive
Proactive
Approach
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Level 1
Loosely Solicited Input
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Level 1
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Level 2
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Level 2
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Level 2
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Level 2
Phone Call! Level 3
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Level 2
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Level 2
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Levels Of Customer Expectations
Customer Delight!
Level 4
Unexpected - Unknown Characteristics Features
Level 3 Value Added
Options Trade-offs Available To
The Customer (Explicit)
Level 2 Specifications Requirements
Minimum Performance Levels. Assumed! (Implicit)
Level 1 Base Expectations
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Expectations Example
Best Car Ever!
Level 4
Side Air Bags, Acceleration, Free Rust-proofing,
Level 3 Value Added
Horsepower, Sound System, Color, Price,
Options (Explicit)
Level 2 Specifications Requirements
Safe, Stable, Warm/Cool, Stops, Corners,
etc. (Implicit)
Level 1 Base Expectations
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One Model For TQM
Total Involve- ment
Focus On Customers
TQM
Process Improvement (tools)
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Total Involvement
Employees
Leadership
TI
Suppliers
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Total Involvement
Management, Employees Suppliers identify
opportunities to and work TOGETHER on
Continuously improving the organization.
Improvement Teams, Quality Teams, Empowerment,
etc.
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Alignment ?
Business is difficult when everyone is going in
different directions
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Alignment
Who would you layoff first?
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One Model For TQM
Total Involvement
Focus On Customers
TQM
Process Improvement (tools)
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Basic Steps in Continuous Improvement

• Identify a the problem and establish an
  improvement goal
• Collect data (tools)
• Analyze the problem (tools)
• Generate potential solutions (tools)
• Choose a solution
• Implement the solution
• Monitor the solution to see if it accomplishes
  the goal (tools)
• Identify the next problem repeat process

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The PDSA Cycle
Deming Wheel or Shewhart Cycle
check
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Process Improvement and Tools

• There are a number of tools that can be used for
  problem solving and process improvement
• Tools aid in data collection and interpretation,
  and provide the basis for decision making

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Tools Introduction
- Tap Light Scenario - Your boss confronts you
on Monday and says, If the quality of the Tap
Lights does not improve, Friday may be your last
day. What do you do? What do you need to know?
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Basic Quality Tools

• Flowcharts (last week)
• Check Sheets
• Histograms
• Pareto Charts
• Scatter Diagrams
• Run Charts
• Cause-and-Effect Diagrams
• Benchmarking
• Control Charts

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Check Sheets
A Simple Chart Designed for the Specific
Application
- Used To Collect Organize Data - Problems or
events are tallied
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Check Sheet
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Check Sheets
Paint Nonconformities
Categories specific to application!
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Check Sheets
GLOVE IS LEAKING!!
Glove imperfections
Special Location Check Sheet
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Check Sheets
Special Location Check Sheet
Glove imperfections
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Histograms
The graphical representation of a set of numbers
- Used to compare actual data to
specifications. - Describes the shape of the
distribution. - Identifies discrepancies such as
gaps.
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Histogram Tally (Checksheet)
Dimensional Boundaries Tabulation Frequenc
y
0.250 - 0.255 XXXXXXXXX 9 0.256 - 0.260
XXXXXXXXXXXXX 13 0.261 0.270
XXXXXXXX 8 0.271 0.275 XXXXXX 6 0.276
0.280 XXXXX 5 0.281 0.285 XXXX 4
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Histogram
Specifications 0.260 /- 0.020
15
13
10
Out of Spec.
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Frequency
8
6
5
5
4
0
0.250 0.255
0.256 0.260
0.261 0.270
0.271 0.275
0.276 0.280
0.281 0.285
Dimensional Boundaries
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Histogram
Sales By Region
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Pareto Diagram
Vilfredo Pareto - Studied the distribution of
wealth in Europe in the 1870's. He found that
most of the money was controlled by only a few
people. Juran called this, the Vital Few and
Useful Many. Deming refered to it as the 80 /
20 Rule.
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Pareto Analysis
80 of the problems may be attributed to 20 of
the causes.
Typically not more than 10 categories.
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Pareto Data (from checksheet)
Dining Hall Complaints
Complaint Number of Complaints Cold
food 105 Cheap utensils 2 Food tastes
bad 10 Salad not fresh 94 Poor service
13 Food too greasy 9 Lack of courtesy
2 Lack of cleanliness 25
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Complaint Pareto Data
Rounding Error
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Pareto Diagram
Cumulative often confusing!
Dining Hall Complaints
110
105
100
100
94
90
90
80
80
70
70
Number of Complaints
60
60
Cumulative Percent
50
50
40
40
30
30
25
20
20
13
10
9
10
10
2
2
0
0
Fresh
Clean
Greasy
Service
Utensils
Courtesy
Cold food
Bad taste
Complaint
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Shirt Data
Three sets of DATA!
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Defect Pareto (qty. of Defects)
Shirt Defects
2500
100
2300
2250
90
2000
80
1650
1750
70
1500
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Cumulative Percent
Number of Defects
1250
50
1000
40
750
30
500
20
300
250
200
250
10
100
100
100
0
0
Cuffs
Hems
Collars
Buttons
Material
Stitching
Threads
Button holes
Defects
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Dollar Loss Pareto
Shirt Defect Losses
9900
10000
100
9200
9000
90
8000
80
7000
70
6000
60
Cumulative Percent
Number of Defects
5000
50
4000
40
3000
30
2400
2000
20
1250
1200
600
1000
10
400
400
0
0
Cuffs
Collars
Threads
Buttons
Material
Stitching
Hems
Button Holes
Defects
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Scatter Diagrams
- Shows cause-and-effect relationships between
two variables. - One variable is dependent while
the other is independent. - Data is gathered
then plotted on a graph.
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Scatter Data
Data on Auto Speed vs. Gas Mileage
Sample Speed Mileage Sample Speed Mileage Number M
PH MPG Number MPH MPG
1 60 22 9 50 26 2 40 33 10 40 28 3 35 35 11 55 32
4 35 30 12 55 21 5 40 35 13 60 22 6 50 29 14 30 38
7 45 32 15 65 18 8 65 20 16 45 29
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Scatter Diagram
Speed vs. Mileage
Correlation?
40
x
35
x
x
x
x
Gas Mileage - MPG
30
x
x
x
x
x
25
x
x
x
x
20
x
x
Speed - MPH
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Scatter Diagram
Speed vs. Mileage
Negative Correlation Mileage Decreases As Speed
Increases
40
x
35
x
x
x
x
Gas Mileage - MPG
30
x
x
x
x
x
25
x
x
x
x
20
x
x
Speed - MPH
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Scatter Diagram Patterns
Y
Y
Y
X
X
X
Positive Correlation
Negative Correlation
No Correlation
Y
Application Ideas Caloric Intake to
Weight Advertising to Sales Turnover to
Productivity Cross Training to Output Spent on
Training to Output Hours of Practice to
Performance
X
Positive Correlation may exist
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Run Chart
Graphically shows process performance,
including trends and out of spec
situations. Excellent for start-up and low
volume production, often used before control
charts. Points are simply plotted in order of
production. No control limits are
used. Excellent tool for basic communication.
Application Ideas Weight Loss Over Time Sales
Over Time Productivity Over Time Hours of
Practice Baggage Handled Over Time
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Run Chart
USL
LSL
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Cause-and-Effect Diagram
Ishikawa Diagram / Fishbone Diagram May focus of
good effect to repeat. May focus on bad effect to
eliminate. Uses simple Cause / Effect model.
Used to aid in brainstorming or identifying
possible causes of problems. Categories are
often used to facilitate ideas.
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Cause-and-Effect Diagram
Categories will reflect problem at hand.
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Cause / Effect Example
Materials
Measurement
Equipment
Bad Tasting Coffee
Procedures
Environment
People
Effect
Causes
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Cause / Effect Example
Materials
Equipment
Measurement
Wrong Spoon
Grinder
Brand
Water
Not Heating
Water Volume
Filter
socket
plug
cord
Bad Tasting Coffee
Used Hot Water
Pollution
Wrong Grind
Taste
Humidity
Tea-Drinker
Experience
Procedures
Environment
People
Effect
Causes
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Benchmarking Process

• Identify a critical process that needs improving
• Identify an organization that excels in this
  process
• Collect data about that organization
• Interviews, reverse engineering,
• mystery shopper, etc.
• Analyze the data
• Improve the critical process

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Control Charts
Graphical presentation of - out-of-control
conditions for a process - variation in
central tendency and dispersion - whether
or not a process is in a stable state
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Control Charts
X Chart (average of subgroups)
3.50
UCLX
3.46
3.42
X
Subgroup Average
3.38
LCLX
3.34
1
10
5
15
Subgroup Number
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Tracking Improvements