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TOPIC 9 - TOTAL QUALITY MANAGEMENT (TQM) Quality Management i. ii. iii.

be able to understand modern concepts of quality and dimensions of quality be able to discuss employee involvement and JIT in Total Quality Management be able to describe basic quality tools

iv.

occur after delivery (liabilities, warranty, sued by customer)

New attitude towards quality using Three Philosophies i. Continuous improvement KAIZEN ii. Involvement of everyone in the organization iii. Customer satisfaction Elements of TQM i. Utilizes education & training everyone ii. Encourages empowerment of the employees in the work place, team approach iii. Promote understanding & fulfilling the needs of customers iv. Define quality in term of customer requirement v. Use statistical reasoning with data to solve problems & to improve vi. View quality improvement as never ending quest to improve the process Employee Involvement i. In every step of production process, involve directly with the system Everyone must be responsible on their work Build communication network, employees with supervisor (open minded, supportive)

QUALITY is the ability of a product or service to consistently meet or exceed customer expectations.

Dimension of Quality i. ii. iii. iv. v. vi. vii. viii. Performance main characteristics Special Features extra characteristics Conformance how well corresponds to expectation Reliability consistency of performance without breakdown Durability useful life time Safety safe to use as directed Aesthetics nice to look at Service After Sale handling of complaints, help lines and checking customer satisfaction

ii. iii.

Relationship between TQM and Just-In-Time i. JIT emphasizes continuous improvement & enforces problem solving since design to production stage; deliver just as needed ii. Target less inventory, less scrap, rework, reduce cost iii. Limits potential sources of error, give early warning, produce in small batches TQM Lead to Lower Production Cost

Consequences of Poor Quality i. ii. iii. iv. Reputation & image will suffer Pay special attention to potential liability due to injury, damage or even death Rework have to be done, slow the process to accommodate rework, high scraps Increase cost of rework, scrap, repair & replacement, legal expenses i. ii. iii. iv. Emphasize the quality from supplier & distributor Reduce prevention cost ( less potential for defective parts from employees) Reduce cost of inspection Reduce cost of rework, replacement

Responsibility for Quality Top management Design Procurement Production/operations Quality assurance Packaging and shipping Marketing and sales Customer service Cost of Quality Internal Cost Failure cost: results from production of defective parts before delivery (rework, scrap, downtime) ii. Appraisal cost: evaluating products (lab testing, inspector) iii. Prevention cost: reducing potential for defective (training, awareness program) External cost i.

Obstacles to Implementing TQM Company-wide definition of quality Strategic plan for change Customer focus Real employee empowerment Emphasis on short-term financial results Time to devote to quality initiatives Leadership View of quality as a quick fix The Process Improvement Cycle i. ii. iii. iv. v. vi. vii. Select aprocess Study/document Seek ways toImprove it Design an Improved process Implement the Improved process Evaluate Document

Basic Quality Tools i. ii. iii. Flowcharts Check sheets Histograms

iv. v. vi. vii.

Pareto Charts Scatter diagrams Control charts Cause-and-effect diagrams

Benchmarking Process i. ii. iii. iv. v. Identify a critical process that needs improving Identify an organization that excels in this process Contact that organization Analyze the data Improve the critical process

Topic 5 Production Planning and Control AGGREGATE PLANNING An AP means combining the appropriate resources into general, or overall terms. It is concerned with determining the quantity and timing of production for immediate future.

MPS is established in terms of specific products Schedule must be followed for a reasonable length of time The MPS is quite often fixed or frozen in the near term part of the plan The MPS is a rolling schedule The MPS is a statement of what is to be produced, not a forecast of demand

The Planning Process Long Range Planning Covers a period of 5 years and made up of : Product & Market Planning Financial Planning Resource Planning Medium Range Planning Covers 6 8 months and made up of : Aggregate Planning Item Forecasting Master Production Schedule (MPS) Capacity Planning Short Range Planning Covers from 1 day to a few weeks and consists of : Material Requirement Planning (MRP) (Specify when production and purchase orders must be made) Capacity Requirement Planning (Provide detailed schedule when each operation is to be run on each work center and how long it will take to process). Final Assembly Scheduling (Operations required to put product in its final form). Production Planning and Control (Scheduling and shop-floor control activities). Purchase Planning and Control (Acquisition and control of purchased items). Phases of Aggregate Planning 1. Prepare an aggregate demand forecast. 2. Specify organization policies for smoothing capacity utilization. 3. Determine feasible production alternatives : Changing production rate (same work force) Changing production rate (changing the size of work force). Absorbing demand through inventories. Absorbing demand through back ordering. Absorbing demand through subcontract. Using part-time workers. 4. Determination of optimal production strategy. Graphical or Charting Methods Popular they are easy to understand and use. They are trial-and-error approaches that do not guarantee an optimal plan. 3. The five steps involved are: Determine the demand in each period. Determine the capacity for regular, OT, hired workers and subcontracting for each period. Find production costs, hiring and layoff costs, and inventory holding costs. Consider company policy on workers and stock levels. Develop alternative plans, examine their total costs and select the best plan (lowest total cost). 1. 2. Master Production Schedule (MPS) Specifies what is to be made and when Must be in accordance with the aggregate production plan Inputs from financial plans, customer demand, engineering, supplier performance As the process moves from planning to execution, each step must be tested for feasibility The MPS is the result of the production planning process

MRP Material Requirement Planning is a tool geared specifically to assembled operations MRP provides answers for several questions for the suppliers: What items are required? How many are required? When are required ? Dependent Demand The demand for one item is related to the demand for another item Given a quantity for the end item, the demand for all parts and components can be calculated In general, used whenever a schedule can be established for an item MRP is the common technique Effective use of dependent demand inventory models requires the following 1. Master production schedule 2. Specifications or bill of material 3. Inventory availability 4. Purchase orders outstanding 5. Lead times Benefits of MRP. 1. Better response to customer orders 2. Faster response to market changes 3. Improved utilization of facilities and labor 4. Reduced inventory levels Material Resource Planning II (MRP II) Expanded MRP with emphasis placed on integration Financial planning Marketing Engineering Purchasing Manufacturing Once an MRP system is in place, inventory data can be augmented by other useful information Labor hours Material costs Capital costs Virtually any resource System is generally called MRP II or Material Resource Planning

Topic 5 Short Term Scheduling Scheduling: Establishing the timing of the use of equipment, facilities and human activities in an organization Effective scheduling can yield i. Cost savings ii. Increases in productivity Sequencing: Determine the order in which jobs at a work center will be processed. Workstation: An area where one person works, usually with special equipment, on a specialized job.

Limitations Rules do not look beyond due dates. May be two work centers at the same due date. Which one is important Rules do not look upstream or downstream. Idle resources & bottleneck resources may be not recognized.

Sequencing Jobs Specifies the order in which jobs should be performed at work centers Priority rules are used to dispatch or sequence jobs FCFS: First come, first served SPT: Shortest processing time EDD: Earliest due date LPT: Longest processing time Average completion time = Total flow time/Number of jobs Utilization =Total job work time/Total flow time Average number of jobs in the system =Total flow time/Total job work time Average job lateness = Total late days/Number of jobs

Comparison of Sequencing Rules No one sequencing rule excels on all criteria SPT does well on minimizing flow time and number of jobs in the system But SPT moves long jobs to the end which may result in dissatisfied customers FCFS does not do especially well (or poorly) on any criteria but is perceived as fair by customers EDD minimizes lateness

Critical Ratio (CR) An index number found by dividing the time remaining until the due date by the work time remaining on the job Jobs with low critical ratios are scheduled ahead of jobs with higher critical ratios Performs well on average job lateness criteria CR =Time remaining Workdays remaining Due date - Todays date Work (lead) time remaining

Critical Ratio Technique 1. Helps determine the status of specific jobs 2. Establishes relative priorities among jobs on a common basis 3. Relates both stock and make-to-order jobs on a common basis 4. Adjusts priorities automatically for changes in both demand and job progress 5. Dynamically tracks job progress Johnsons Rule 1. List all jobs and times for each work center 2. Choose the job with the shortest activity time. If that time is in the first work center, schedule the job first. If it is in the second work center, schedule the job last. 3. Once a job is scheduled, it is eliminated from the list 4. Repeat steps 2 and 3 working toward the center of the sequence