ISQA 479

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ISQA 479

• MRP
• Quality Control

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Materials Requirements Planning

• Bill of Material
• List of all parts necessary to make ONE
• BofM X Order GROSS Reqmts
• Subtract Inventory
• Subtract On Order
• NET Reqmts
• Net Reqmts Exception Report
• What to BUY, What to MAKE
• Offset NR by Lead Time WHEN to Order

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MRP Concepts

• Multiple Parents
• Multiple Uses of One Part in BofM
• System Nervousness
• Exception Reports

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MRP Concepts

• Lot-Sizing Techniques
• Lot-for Lot
• EOQ/EPQ
• Periodic Order Quantity
• Fixed Interval, Variable Quantity
• EOQ/Avg Use
• Fixed Order Quantity
• Variable Interval, Fixed Quantity
• Standard Package Quantities
• Price Break Levels
• EOQ

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Quality

• How would you define Quality?

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Quality Definitions

• Manufacturing-Based - Philip Crosby
• Quality means conformance to requirements
• Value-Based - Feigenbaum
• Quality means best for certain customer
  conditions. These conditions are (a) the actual
  use, and (b) the selling price of the product

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Philip CrosbyQuality is Free, pp. 15-16

• Quality has much in common with sex. Everyone
  is for it (under certain conditions, of course).
  Everyone feels they understand it (even though
  they wouldnt want to explain it). Everyone
  thinks execution is only a matter of following
  natural inclinations. (After all, we do get
  along somehow). And, of course most people feel
  that all problems in these areas are caused by
  other people. (If only they would take time to
  do things right).

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Quality Definitions

• Customer-Based - Juran
• Quality is fitness for use
• Customer-Based - ATT
• Quality is meeting customer expectations.

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Quality

• Is Quality Free?
• Can We Achieve 100 Quality?

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Shingo

• Difference Between Errors and Defects
• Errors Cause Defects
• Defects Occur Because of Errors
• Three Types of Inspection
• Self-Inspection
• Successive Checks - Next Person
• Source Inspection (Check for Errors that WILL
  cause Defects
• Identify Errors, Fail Safe the Process

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Control Charts

• Processes Have Natural Variation
• Fundamental Question
• Natural Variation or Process Change?
• That is what Statistical Process Control is All
  About
• Key Assumptions
• Sample is RANDOMLY selected
• Defects are randomly distributed throughout the
  lot

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Sampling

• For Defects (What is Quality of Lot?)
• For Conformance to Specification (No More Than X
  Defective)

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Control Chart Types

• Attribute Charts (things counted)
• P-chart Proportion Defective
• C-chart Number of Defects
• Focus is on PRODUCT output
• Variable Charts
• X-chart Sample Means
• R-chart Range Means
• Focus in on PROCESS, itself

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Control Chart Problem Indicators

• One Data Point Outside Control Limit
• Two Data Points in Zone Three
• Five Consecutive Data Points on One Side of the
  Mean
• Trend - Five Successive Points in a Trend
• Erratic Behavior
• Sudden Change in Behavior

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ISQA 479

• Strategic AlliancesProcurement and Outsourcing

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Strategic Planning

• Mission Statement
• Vision Statement
• Strategies
• Long-Term Action Plan
• Commits Organizational Resources
• Creates Competitive Advantage
• Performance Measures

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Characteristics of Supplier Alliances

• Operational
• Strategic
• 3rd Party Alliances

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Criticality Grid Managerial Objectives

• High
• Patent Look Ahead
  Strategic Alliances
• M Prop Tech
• A
• R
• K
• E Market Driven
  Market Driven
• T Min Admin Cost
  Supply Continuity
• Ind Std Automate
  Operational Alliance
• Commodity
• Low
• Low
  High
• INTERNAL
• Volume, Importance Volume, Pervasive

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Supplier Relationships

• Risk and Numbers of Suppliers
• Industry Standard
• Custom
• Supplier Performance
• Managing Supplier Relationships
• Interdependencies
• Motivation
• Reward Power
• Punishment Power

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Supplier Relationship Goals

• Long-term
• Collaborative
• Early Supplier Involvement
• Growth Capabilities
• Create Competitive Advantage

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Make/Buy

• Products Never Make
• Products Always Make
• In Between Products

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Make/Buy

• Industry Standards, Proprietary Products and
  Make/Buy
• Procurement from Suppliers
• Procurement by Manufacture
• Fluid Decision
• Revisit at Regular Intervals
• As Economic Conditions Change
• As Internal Conditions Change
• Always Maintain Internal Capability

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Reasons to Make

• Quantities Too Small
• Quality Too Critical
• Timing Too Critical
• Trade Secrets (for a time)
• Cheaper
• Keep Crew Busy
• Avoid Sole Source (perhaps)
• Union Shop

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Reasons to Buy

• Quantities Too Large
• Supplier Quality Acceptable
• Have Sufficient Lead Time
• Lack of Necessary Competencies
• Lack of Capacity
• Cheaper
• Reciprocity

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Outsourcing

• Strategic Decision
• Activity is Not Core Competency
• Will, In Future Completely Depend on Suppliers
• Will No Longer Maintain Internal Capability

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Outsourcing Strategies

• When to Consider Outsourcing? Why?
• Outsourcing Risks
• Risk Mitigation Strategies

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Smith Group Case
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Chapter 8, Question 1Logistics Strategy

• Internal Logistics Expertise
• Acquire Logistics Company
• Internal Strategy, External Suppliers
• 3PL Strategy

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Chapter 8, Question 3

• Quick Response
• Continuous Replenishment
• VMI

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Chapter 8, Question 6

• Why did VMI at Spartan Fail?
• How Should it Work?

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