Em week 3 quality management (7)

ENG209: ENGINEERING MANAGEMENT (Elective Course for EEE Students) (2016 Fall, Week 3) Prof. Dr. Mete Gündoğan Slides Preparation Res. Asst. Cihat Öztürk (IE PhD Candidate) Res. Asst. Melda K. Akgün (IE MSc Candidate)

SECTION 1 QUALITY MANAGEMENT Lesson Content: Quality Through İmprovement:  Six Sigma  Kaizen  5S  JIT  Benchmarking  Quality Control Circle

SIX SIGMA

Prof. Dr. Mete Gündoğan

SIX SIGMA  Six Sigma is “a comprehensive and flexible system for achieving,

sustaining, and maximizing business success. Six Sigma is uniquely driven by close understanding of customer needs, disciplined use of facts, data, and statistical analysis, and diligent attention to managing, improving, and reinventing business processes.”*

(*Pande, Peter S., Robert P. Neuman, and Roland R. Cavanagh, The Six Sigma Way, New York: McGraw-Hill, 2000, p. xi.)

SIX SIGMA It is a Philosophy – Anything less than ideal is an opportunity for improvement – Defects costs money – Understanding processes and improving them is the most efficient way to achieve lasting results

It is a Process – To achieve this level of performance you need to: Define, Measure, Analyse, Improve and Control

It is Statistics – 6 Sigma processes will produce less than 3.4 defects per million opportunities

SIX SIGMA

The history of Six Sigma  The Six sigma was founded by Motorola in the 1970s.  Out of senior executive Art Sundry's criticism of Motorola’s bad    

quality.

They founded a connection between increases in quality and decreases in costs of production.

Bill Smith, “Father of six sigma” introduce this quality improvement Methodology to Motorola.

The method became well known in the 90’s when, under the leadership of Jack Welsh, General Electric successfully applied. Many large American companies soon followed suit.

The Characteristics of Six Sigma  Statistical Quality Control  Methodical Approach  Fact and Data Based Approach  Project and Objective Based Focus  The Customer Focus  Teamwork Approach to Quality Management

Six Sigma Philosophy  Know What’s Important to the Customer (CTQ)  Reduce Defects (DPMO)  Center Around Target (Mean)  Reduce Variation (Standard Deviation)

Six Sigma Objectives  Overall Business Improvement  Remedy Defects/Variability  Reduce Costs  Improve Cycle Time  Increase Customer Satisfaction

Six Sigma Methodologies  Six Sigma projects follow two project methodologies :

Six Sigma Phases - Define  Define Customers and Requirements (CTQs)  Develop Problem Statement, Goals and Benefits  Identify the Process  Define Resources  Evaluate Key Organizational Support  Develop Project Plan and Milestones  Develop High Level Process Map

Six Sigma Phases - Measure  Define Defect and Opportunity  Develop Data Collection Plan  Validate the Measurement System  Prepare data collection plan :  How many data points do you need to collect ?  How many days do you need to collect data for ?  What is the sampling strategy ?  Who will collect data and how will data get stored ?

Six Sigma Phases - Analyze  Define Performance Objectives  How well or poorly processes are working compared with

Competitor’s  Identify Sources of Variation  Don’t focus on symptoms, find the root cause

Six Sigma Phases - Improve  Perform Design of Experiments  Develop Potential Solutions  Develop implementation plan.  Prepare final presentation.  Present final recommendation to Management Team.

 Correct/Re-Evaluate Potential Solution

Six Sigma Phases - Control 

Define and Validate Monitoring and Control System



Develop Standards and Procedures



Implement Statistical Process Control



Verify Benefits, Cost Savings/Avoidance, Profit Growth



How will you maintain to gains made 

Change policy & procedures



Change drawings



Change planning



Revise budget



Training

Six Sigma Phases – Design and Validate  Design :

Develop detailed design for new process.

Determine and evaluate enabling elements. Create control and testing plan for new design. Use tools such as simulation, benchmarking, DOE, Quality Function Deployment (QFD), FMECA analysis, and cost/benefit analysis. ď‚— Validate : Test detailed design with a pilot implementation.

If successful, develop and execute a full-scale implementation. Tools in this step include: planning tools, flowcharts/other process management techniques, and work documentation.

Six Sigma Organizations

Roles and Responsibilities  Executive Champion  Responsible for providing resources to BB/GBs  Help in team selection  Track progress of project  Generally is supervisor of BB/GB. May help in selection of the

project  Sponsor  Call for need of project (Project identification)  Beneficiary of the project  Validate current status and status after completion of project  Allocates resources for the project  Ensure compliance to controls established as a result of the project

Roles and Responsibilities  Deployment Champion  Mentor and guide BBs/GBs  Provide technical help when BBs/GBs reach a roadblock  Publish Summary report of all projects  Raise alarm when things are not moving

 CFO/Finance  Assess the saving potential at start of project  Validate savings against the targets achieved at completion of

project

Master Black Belt Roles - Enterprise Six Sigma expert - Permanent full-time change agent - Certified Black Belt with additional specialized skills or experience especially useful in deployment of Six Sigma across the enterprise

Responsibilities - Highly

proficient

in

using

Six

Sigma

methodology to achieve tangible business results.

- Technical expert beyond Black Belt level on one or more aspects of process improvement (e.g., advanced statistical analysis, project management, communications) - Basic Black and Green Belt training - Coach / Mentor Black Belts

Black Belt Roles - Six Sigma technical expert

Responsibilities - Leads business process improvement projects where Six Sigma approach is indicated.

- Temporary, full-time change agent - Successfully completes high-impact projects that (will return to other duties after result in tangible benefits to the enterprise completing a two to three year - Coach / Mentor Green Belts tour of duty as a Black Belt) - Recommends Green Belts for Certification

Green Belt Roles - Six Sigma Project originator

Responsibilities - Recommends Six Sigma projects

Participates on Six Sigma project teams - Part-time Six Sigma change agent. Continues to perform normal duties while participating on Six Sigma - Leads Six Sigma teams in local improvement projects project teams

- Six Sigma champion in local area

Yellow Belt Roles

Responsibilities - Actively participates in team tasks

Learns

and

applies

Six

Sigma

tools(Maps and Metrics, Design of Experiments) to projects

- Communicates well with other team members - Demonstrates basic improvement tool knowledge - Accepts and executes assignments as determined by team

Key Concepts of 6 Sigma  Critical to Quality: Attributes most important to the customer  Defect: Failing to deliver what the customer wants  Process Capability: What your process can deliver  Variation: What the customer sees and feels  Stable Operations: Ensuring consistent, predictable processes

to improve what the customer sees and feels  Design for Six Sigma: Designing to meet customer needs and process capability

Requisite For Successful Implementation  Leadership/top management commitment is essential  All leaders should be trained as six sigma champions  Including six sigma planning within the business operating plan  Select the right consultant to train your belts  Ensure that return on training investment as at least 20 times  Get the movement going at the shop floor level  Create a certification process  Develop a mentoring process  Ensure financial validation of project s  Never allow six sigma to be classified as a quality manager’s job

Rewards of six sigma  Improved reliability & preductability of software products and services  Incresed value to the customer and shareholders  Improvements in organizational morale  Increase market visibility  Organizational recognition  Significant reduction in defect  Institutionalization of a “process” mindset

SIX SIGMA vs TQM Contrasts between traditional TQM and Six Sigma (SS)  TQM is based largely on worker empowerment and teams; SS is owned by business leader champions.  TQM is process based; SS projects are truly cross-functional.  TQM training is generally limited to simple improvements tools and concepts; SS is more rigorous with advanced statistical methods.  TQM has little emphasis on financial accountability; SS requires verifiable return on investment and focus on bottom line.

SIX SIGMA vs TQM Contrasts between traditional TQM and Six Sigma (SS)  TQM is based largely on worker empowerment and teams; SS is owned by business leader champions.  TQM is process based; SS projects are truly cross-functional.  TQM training is generally limited to simple improvements tools and concepts; SS is more rigorous with advanced statistical methods.  TQM has little emphasis on financial accountability; SS requires verifiable return on investment and focus on bottom line.

Criticisms  There is nothing new. It only proves defects and defectives  





counts offer tangible, measurable results.

It is corrective action system rather than taking a preventive and proactive approach to problems.

It is merely about appraisal system and that appraisal programs aren’t useful. In realty, appraisals are great tools for identifying and tracking improvements, which is critical to any project.

Critics have suggested that Six Sigma did not bring quality improvement in all the organizations where it was implemented.

It depends on the tools and authorizations.

KAIZEN

Prof. Dr. Mete Gündoğan

KAIZEN  Kaizen;  Japanese for “improvement.”  When used in business sense and applied to the workplace, Kaizen

refers to all activities that continuously improve all functions and involve all employees from CEO to assemble line workers.  By improving standardized activities and processes, kaizen aims to eliminate waste.  Kaizen ;  is a tool to rapidly improve work as part of the PDCA cycle  goals must align with the business objectives

What Does Kaizen Mean?

KAI To modify, to change

ZEN Think, make good, make better

= KAIZEN Make it easier by studying it, and making the improvement through elimination of waste.

KAIZEN Masaki Imai

3 Main Principles of KAIZEN ď‚— Consider the process and the results. ď‚— The need to look at the entire process of the job at hand and

to evaluate the job as to the best way to get the job done. ď‚— Kaizen must be approached in such a way that no one is blamed and that best process is put into place.

Why Kaizen?  To eliminate waste in organization.  To increase productivity.  To eliminate any abnormalities & stopping of limits  To improve quality  Customer satisfaction.  Growth of the organization.  Developing self personality.

The Nine types of waste  Overproduction  Delays (waiting time)  Transportation  Process  Inventories  Motions  Defective products  Untapped resources  Misused resources

8 Key Elements Of Kaizen Culture  Kaizen mindset  Customer orientation  Quality control circles  Suggestion system  Discipline in workplace  Small group activities  Co-operative relations  Total quality mangement.

Kaizen mindset  Everything can & should be improved  Not a single day should go without some kind of Improvement.  Imagine the ideal customer experience and strive to pprovide it.  Don’t just criticize. Suggest an improvement.  Think of how to improve it instead of why it cant.  Set target and motivate yourself to achive it.  Use comptetion to arouse interest.  Don’t look for rewards.  Generate more questions.  Say yourself ‘ı can do it’

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Kaizen And Innovation KAIZEN

INNOVATION

1. Effect

Long-term and business as usual

Short term and dramtic

2. Pace

Small Steps

Big Steps

3. Time frame

Continuous and Incremental

Intermittent and non-incremental

4. Change

Gradual and constant

Abrupt and volatile

5. Involvement

Every-one

Selected champions

6. Approach

Collective group efforts, systems approach

Individual ideas and efforts

7. Mode

Maintenance and Improvement

Scrap and Rebuild

8. Effort Orientation

People

Technology

9. Practical Requirements

Little investment but great efforts to maintain

Large investment but little effort to maintain

10. Advantage

Works well in slow growth economy

Better suited in fast growth economy

Kaizen And Innovation

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Benefits Of Kaizen  Savings in energy, material & others resources.  Improvements in working environment.  Improvements in machines & process.  Improvements in jigs & tools.  Capable of generating new ideas.  Customer satisfaction.  Elimination of wastes.  Improvement in product quality.  Improvement in 5S.  Improvement in self personality.  Improvements in own work..

How To Implement Kaizen

Basic Kaizen Tools  Target progress report  Standardized work sheet  Time observation sheet  Cycle time / takt time bar chart  Yamazumi (stack) chart  Standardized work combination sheet  Capacity sheet  Kaizen proposal sheet  Kaizen newspaper

TARGET PROGRESS REPORT Department / Section / Site

Date: ___/____/____/____/__________ Takt Time: _______________________

CATEGORY SPACE (sq. ft.)

INVENTORY WALKING DISTANCE MATERIAL TRAVEL DISTANCE LEAD TIME (sec.)

CYCLE TIME (sec.)

OUTPUT (units / day) CREW SIZE PRODUCTIVITY CHANGEOVER TIME (sec.)

REMARKS:

CURRENT

TARGET

DAY 1

DAY 2

DAY 3

DAY 4

FINAL RESULT

% CHANGE

STANDARDIZED WORK SHEET

Process: __________________________ Part # ____________________________ Part Name: ________________________

Scope of Operation

DATE: _____/____/____ Approvals:

FROM: TO:

NOTE: Takt Time, Work Sequence (same as numbers in “Step” column on Combination Sheet), and numbers of Standard Work in Process must be known to define Standardized Work. Identify all safety concerns, points where quality must be verified (go/no-go) and numbers of pieces of standard work in process using the symbols to the right.

SYMBOLS

Quality

Safety

Standard Work

Check

Precaution

In Process

BASIC DATA

Total Pcs of Std

Takt

Cycle

Operators

Work in Process

Time

Time

this op/line total

sec.

1/

TIME OBSERVATION SHEET

Page _____ of _____

Date / Time: ___/____/____/_________________:________ Line / Process: __________________________________________________

#

Step

1 0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Complete Cycle Time

2

3

4

5

6

7

8

9

10

Observed by: _____________________________________ 11

12

13

14

15

Best Time

Observations (changeover time)

Page ____ of ____

New / Revised as of (date): ___/___/___ Authorizations:

Step

CAPACITY SHEET Description

Walking Time

Manual Time

Max Output

Part Name

Auto Run Time Completion Time

Current Output

Line pieces

per Day

Pieces/Run

Change Time

Needed Times:

Time/Piece

Capacity

Remarks

１

Subtotal

NOTE Update times when improvements are achieved through kaizen, and detail reasons for improvement in “Remarks” column.

Total

pieces

Per Day Workers

Tools

Base Times

Machine ID

Part No.

Manual Automatic Walking

KAIZEN PROPOSAL SHEET Location

Objective

Before

Problem

Date

Operator

After

Effects (cycle time / inventory / changeover time reduction,poka yoke etc.)

KAIZEN NEWSPAPER DATE: _______/_______/_______/___________

TEAM: __________________________________ No.

PROBLEM

WHO

BY WHEN

CHECK

When to use Kaizen?  When the scope and boundaries of a problem are clearly defined     

and understood When results are needed immediately – i.e., capacity constraints, setup reduction, acute quality problems, safety/ergonomic issues In the early stages of a project to gain momentum and build credibility As a change agent when there is resistance to stimulate change As a project launching tool leading to multiple follow-on projects Always use Kaizen as a continuous improvement tool

Stages of Kaizen  Select an event.  Plan the event.  Implement the event.  Follow-up the event.

Stages of Kaizen The Kaizen Approach is composed of 3 segments:  Pre-event Prep: Identify and plan narrowly scoped events  Reducing defects in order entry  Implementing marketing metrics  Performing customer surveys to get VoC  Kaizen Event: measure, analyze, implement, and control improvements in one week  Follow-up Actions: remaining action items must be completed within four weeks after event

10 Basic Rules for Practicing Kaizen i. ii. iii. iv. v. vi. vii. viii. ix. x.

Prepare people to accept change for the betterment.

Think of how to do it and not why it cannot be done.

Do not make excuses? Start by questioning current practices.

Do not seek perfection? Do it even if for only 50% of target.

Correct mistakes at once.

Do not spend money for Kaizen.

Wisdom is brought out when faced with hardship.

Ask “why�? Five times and seek root causes.

Seek the wisdom of ten people rather than the knowledge of one.

Kaizen ideas are infinite.

Management Oriented KAIZEN

Group Oriented KAIZEN

Individual Oriented KAIZEN

Tools

Seven Statistical Tools New Seven Tools Professional skills

Seven Statistical Tools New Seven Tools

Common sense Seven Statistical Tools

Involves

Managers & Professional

QC- circles group members

Everybody

Target

Focus on system & Procedures

Within the same workshop

Within one’s own work area

Cycle (Period)

Lasts for the duration of project

Requires 4-5 months to complete

Anytime

Achievements

As many as management chooses

2-3 per years

Many

Supporting system

Line & Staff project team

Small-group activities QC circles Suggestion system

Suggestion system

Implementation cost

Sometimes require small investment to implement the decision

Mostly inexpensive

Inexpensive

Result

New system and facility improvement

Improved work procedures Revision of standard

On-the-spot improvement

Booster

Improvement in Managerial performance

Morale improvement Participation Learning experience

Morale improvement KAIZEN awareness Self-development

Direction

Gradual & visible improvement Marked upgrading of current status

Gradual & visible improvement

Gradual & visible improvement // YIS//062709//

Kaizen In Toyota  Toyota thus became one of the first companies in the world to adopt practices such  

   

as Kaizen In the early 1990s, Toyota was facing acute labor shortage Toyota’s initial management focus was on increasing production efficiency through higher production levels with less number of workers. This resulted in increased stress and worker exodus The global upsurge in car demand during 1987-1991 led to drastic increase in demand for labors Toyota realized that it would have to rely on Kaizen for modifying its existing assembly lines to attract workers.

The company decided to change its working conditions to accommodate workers of more diverse nature The management decided to allow plants to set their own annual production efficiency targets. Production efficiency measurement was based on worker’s production time rather than on best production time

Six Sigma vs Kaizen KAIZEN

SIX SIGMA

Quality Improvement

YES

YES

Continuous Improvement

YES

YES

Approach

Improve Existing System Human Based

Improve Existing System Statistical Method Improvement FrameworkDMAIC

Implementation

Simpler and Low cost

Difficult and High Cost

RELIES UPON GROUP DYNAMICS

FIXED PLAN OF IMPLEMENTATION

Six Sigma vs Kaizen 

Kaizen     



  

Six Sigma

Japanese Origin Western Origin Culture Methodology (or Culture) Kaizen Umbrella Road Maps Continuous Improvement Immediate Perfection Mistakes as Possibility for Improvement Reducing Variation and Defects Long-term Results Short-term Results Possible Every Possible Improvement Prioritising Projects Providing Quality Ensuring Profitability Participation of Every Single Employee Creation of Project Teams

5S

Prof. Dr. Mete Gündoğan

5S – What is 5S?  An easy way of achieving major change in an office environment  A structure for establishing an orderly, clean and organised

working environment  A way of identifying new problems and wastes that can then be resolved by staff and managers  A way of encouraging everyone to be involved in improvement activities  A process for creating the best working environment to carry out your work and run your business

5S – What is 5S?  Based on Japanese words that begin with “S”, the 5S philosophy

focuses on effective workplace organisation and standardised work procedures  Problems cannot be clearly seen when the workplace is disorganised  Cleaning and organising the workplace helps the team to uncover problems  Making problems visible is the first step of improvement

5S  1. Sei-ri - Sort  2. Sei-ton - Straighten  3. Sei-so - Shine  4. Sei-ke-tsu - Standardise  5. Shi-tsu-ke - Sustain

5S

1. Sei-ri - Sort PURPOSE: TIDINESS  Put things in order according to a specific rule or principle  Identify what is required and what is not and get rid of what you do not need  Identify locations for all items so that anyone can find them & return them once the task is completed PRIORITY

FREQUENCY OF USE Less than once per year

LOW Once per year AVERAGE HIGH

Once per month Once per week Once per day

HOW TO USE Throw away Store away from the workplace Store together Locate at the workplace

1. Sei-ri - Sort

1. Sei-ri - Sort Red Tags ask:  Is this item needed?  If it is needed, is it needed in this quantity?  If it is needed, does it need to be located here?

2. Sei-ton - Straighten    

PURPOSE: ORDERLINESS What you need when you need it Eliminate last moment rush Sort out & separate what is needed & not needed in the area E.g. In crisis Fire Extinguishers and Medical Boxes should be available

3. Sei-so - Shine    

PURPOSE: CLEANLINESS Remove unwanted things & garbage for cleaner workplace Regular clean up of machines/plant to avoid defects One Third of total amount should be used in cleanliness Organizations should have Timely Garbage collection, good sanitation, provision for fresh air

4. Sei-ke-tsu – Standardise    

PURPOSE: To define the standards by which personnel must measure and maintain cleanliness.

Simplify the way of maintaining cleanliness.

Develop procedures, schedules, practices.

Continue to assess the use and disposal of items.

All employees doing the same job should be able to work in any station with the same tools that are in the same location in every station.

5. Shi-tsu-ke - Sustain    

PURPOSE: To maintain what has been accomplished.

Maintain and review standards. Once the previous 4 S's have been established, they become the new way to operate.

Maintain focus on this new way and do not allow a gradual decline back to the old ways.

While thinking about the new way, also think of better ways.

When an issue arises such as a suggested improvement, a new way of working, a new tool or a new output requirement, review the first 4 S's and make changes as appropriate.

The 5S Principles SEIRI SEITON SEISO

Throw away all rubbish and unrelated materials in the workplace Set everything in proper place for quick retrieval and storage

SEIKETSU

Standardize the way of maintaining cleanliness

Clean the workplace; everyone should be an overseer

the 5s daily- make it a way of life; this SHITSUKE Practice means COMMITMENT

The 5S Flow Chart

Five Point Sorting Check D e s c rip tio n

P o in ts

N e e d e d a n d u n n e e d e d ite m s a re m ix e d to g e th e r a t th e w o rk p la c e It is p o s s ib le ( b u t n o t e a s y ) to d is tin g u is h n e e d e d /u n n e e d e d ite m s .

A n y o n e c a n e a s ily d is tin g u is h n e e d e d /u n n e e d e d ite m s .

A ll u n n e e d e d ite m s a re s to re d a w a y fro m th e w o r k p la c e .

C o m p le te ly u n n e e d e d ite m s h a v e b e e n d is p o s e d o f.

1 2 3 4 5

Five Point Straightening Check D e s c rip tio n

P o in ts

It is im p o s s ib le to te ll w h a t g o e s w h e r e a n d in w hat am ount It is p o s s ib le ( b u t n o t e a s y ) to te ll w h a t g o e s w h e r e a n d in w h a t a m o u n t.

T h e re a re lo c a tio n a n d ite m in d ic a to rs fo r a ll to o ls a n d g a g e s , a s w e ll a s s u p p lie s a n d m a te ria l V a rio u s te c h n iq u e s (i.e . c o lo r c o d in g , o u tlin in g , e a s y re p la c e m e n t m e th o d s ) a re u s e d to fa c ilita te r e p la c in g th in g s p r o p e r ly T o o ls a n d g a g e s a re u n ifie d a n d , w h e n p o s s ib le , e lim in a te d . S p e c ific in d ic a to rs s h o w w h a t s u p p lie s a n d m a te ria ls g o w h e re a n d in w h a t am ount

1 2 3 4 5

Five Point Cleanliness Check D e s c rip tio n

P o in ts

T h e w o rk p la c e is le ft d irty .

1 2 3 4 5

T h e w o rk p la c e is c le a n e d o n c e in a w h ile .

T h e w o rk p la c e is c le a n e d d a ily .

C le a n lin e s s h a s b e e n c o m b in e d w ith in s p e c tio n .

C le a n lin e s s (d irt-p re v e n tio n ) te c h n iq u e s h a v e b e e n im p le m e n te d .

Effects of 5S  Identify Abnormalities  Identify wastes and reduce wastes  Promotes everyone’s participation  Improve Safety  Improve Productivities  Better quality products & higher productivity  Smooth working and time saving due to quick retrieval  Results in a place easier to manage  A clean and tidy workplace leads to greater well being and increased

motivation  Creates workplace ownership  Company image improves

Keys To 5S Success  All employees need to participate  Agree the standards used  Audit checklist  Always look for 5s opportunities  Complete marked items in a

month

Target of 5S  Zero changeovers leading to product/ service diversification  Zero defects leading to higher quality  Zero waste leading to lower cost  Zero delays leading to on time delivery  Zero injuries promoting safety  Zero breakdowns bringing better maintenance

Before

After

Before

After

JUST IN TIME (JIT)

Prof. Dr. Mete Gündoğan

JUST IN TIME (JIT) 

  

JIT; A philosophy of continuous improvement that puts emphasis on prevention rather than correction, and demands a company wide focus on quality. “ A production system to produce the kind of units needed, at the time needed and in the quantities needed” “A Philosophy of manufacturing based on planned elimination of all waste and continues improvement of productivity” production is based on demand  not before not after  no more, no less

JUST IN TIME  JIT philosophy means getting the right quantity of goods at

the right place and the right time  JIT exceeds the concept of inventory reduction; it is an allencompassing philosophy geared to eliminate waste, anything that does not add value  A broad JIT view – or lean production/lean systems - is one that encompasses the entire organization

History of JIT Manufacturing  Evolved in Japan after World War II, as a result of their

diminishing market share in the auto industry.  Toyota Motor Company- Birthplace of the JIT Philosophy Under Taiichi Ohno.  JIT is now on the rise in American Industries.

Concept of JIT Three fundamental concept of JIT;  Elimination of waste and variability  Pull versus Pull system  Manufacturing cycle time

1. Elimination of waste and variability  “Anything that does not add value” is described as waste in

production of G & S.  Products being stored, inspected or delayed, products waiting in queue and defective product do not add value hence they are 100% waste  JIT Speeds throughput (converted from raw materials into finished goods) allowing faster delivery and reducing work in process.

2) Pull Vs Push system  The pull inventory control system begins with a customer's order. With this

strategy, companies only make enough product to fulfil customer's orders.  One advantage to the system is that there will be no excess of inventory that needs to be stored, thus reducing inventory levels and the cost of carrying and storing goods. Ex. JIT (The goal is to keep inventory levels to a minimum by only having enough inventory, not more or less, to meet customer demand)  The push system of inventory control involves forecasting inventory needs to meet customer demand. Companies must predict which products customers will purchase along with determining what quantity of goods will be purchased.  The company will in turn produce enough product to meet the forecast demand and sell, or push, the goods to the consumer. Ex. MRP (it combines the calculations for financial, operations and logistics planning.)

3) Manufacturing cycle time ď‚— It is time between the arrival of raw material and

shipping of finished products. ď‚— JIT helps to reduce the manufacturing cycle time.

Characteristics of JIT ď‚— JIT system focus on reducing inefficiency and unproductive time in

production process to improve continuously the process and quality.

I.

Pull method of material flow

II.

Constantly High Quality

III. Uniform Workstation Loads IV.

Standardized components and work methods

V.

Close Supplier Ties

VI. Flexible workforce VII. Automated Production

JIT Functions

The Eight Types Of Waste Waste

Definition

1. Overproduction

Manufacturing an item before it is needed.

2. Inappropriate Processing

Using expensive high precision equipment when simpler machines would suffice.

3. Waiting

Wasteful time incurred when product is not being moved or processed.

4. Transportation

Excessive movement and material handling of product between processes.

5. Motion

Unnecessary effort related to the ergonomics of bending, stretching, reaching, lifting, and walking.

6. Inventory

Excess inventory hides problems on the shop floor, consumes space, increases lead times, and inhibits communication.

7. Defects

Quality defects result in rework and scrap, and add wasteful costs to the system in the form of lost capacity, rescheduling effort, increased inspection, and loss of customer good will.

8. Underutilization of Employees

Failure of the firm to learn from and capitalize on its employees’ knowledge and creativity impedes long term efforts to eliminate waste.

Sources of Waste  Overproduction  Waiting time  Unnecessary transportation  Processing waste  Inefficient work methods  Product defects

Strategies For Minimizing Waste

By Using JIT  Reduce waste due to movement

       

JIT Layout Tactics Build work cells for families of products Include a large number operations in a small area Minimize distance Design little space for inventory Improve employee communication Use poka-yoke devices Build flexible or movable equipment Cross-train workers to add flexibility

Strategies For Minimizing Waste

By Using JIT  Inventory is at the minimum level necessary to keep operations

running

      

JIT Inventory Tactics Use a pull system to move inventory Reduce lot sizes Develop just-in-time delivery systems with suppliers Deliver directly to point of use Perform to schedule Reduce setup time Use group technology

Strategies For Minimizing Waste

By Using JIT  Better scheduling improves performance

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JIT Scheduling Tactics Communicate schedules to suppliers Make level schedules Freeze part of the schedule Perform to schedule Seek one-piece-make and one-piece move Eliminate waste Produce in small lots Use kanbans Make each operation produce a perfect part

Principles Of JIT Manufacturing  Total Quality Management  Production Management  Supplier Management  Inventory Management  Human Resource Management

Goal of JIT     

The ultimate goal of JIT is a balanced system.

Achieves a smooth, rapid flow of materials through the system Eliminate disruptions Make system flexible Eliminate waste, especially excess inventory

Companies That Use JIT

     

There are so many companies that are using JIT planning.

Any car, motorbike or aircraft manufacture uses JIT. This means that the examples are countless. For example, Toyota Dell Harley Davidson Walmart McDonalds Xerox

JIT Manufacturing Building Blocks  Product design  Process design  Personnel/organizational elements  Manufacturing planning and control

JIT Manufacturing Building Blocks 1- Product design  Standard parts  Design Simplification  Highly capable production systems  Concurrent engineering

JIT Manufacturing Building Blocks 2- Process design  Small lot sizes  Setup time reduction  Limited work in process  Quality improvement  Production flexibility  Little inventory storage

Less inventory Less rework Less storage space Problems are more apparent Increases product flexibility Easier to balance operations Reduce downtime by reducing changeover time Use preventive maintenance to reduce breakdowns Cross-train workers to help clear bottlenecks Use many small units of capacity Reserve capacity for important customers

JIT Manufacturing Building Blocks 3- Personnel/organizational elements  Workers as assets  Cross-trained workers  Continuous improvement  Leadership

JIT Manufacturing Building Blocks 4- Manufacturing planning and control  Pull systems  Visual systems (kanban)  Close vendor relationships  Reduced transaction processing (delays in delievery)  Preventive maintenance

Comparison of JIT and Traditional Factor

Traditional

JIT

Inventory

Much to offset forecast errors, late deliveries Large

Minimal necessary to operate

Lot sizes Setup; runs

Large

Small

Few, long runs

Many, short runs

Vendors

Long-term relationships Partners are unusual Necessary to do the Assets work

Deliveries

Workers

Small

Advantages of JIT  Reduced Inventory

 Simplified scheduling & control

 Improved quality

 Increased capacity

 Lower costs

 Better utilization of personnel

 Reduced space requirements

 More product variety

 Shorter lead-time

 Increased equipment utilization

 Increased productivity

 Reduced paperwork

 Greater flexibility

 Valid production priorities

 Improved vendor relations

 Work force participation

Disadvantages of JIT  Danger of disrupted production due to non-arrival of supplies.  Danger of lost sales.  High dependence on suppliers.  Less time for quality control on arrival of materials.  Increased ordering and admin costs.  May lose bulk-buying discounts.

Implementation Problems  Worker resistance  Lack of top management support  Lack of communication  Lack of formal training

JIT … Not For Everyone  JIT concepts work best when goods can be produced in response

to consumer demand (e.g. automobiles, etc.)  JIT is less effective for the production of standardized consumer

goods (e.g. basic clothing, food, soft drinks, toasters, etc.)  There are cases where JIT concepts apply to sub-processes of a

make to stock environment. (e.g. computers etc.)

BENCHMARKING

Prof. Dr. Mete Gündoğan

What is Benchmarking? ď‚— Benchmarking is the process of improving performance by

continuously identifying, understanding, and adapting outstanding practices found inside and outside the organization. o Why are others better ? o How are others better ? o What can we learn ? o How can we catch up ? o How can we become the best in our sector ?

What is Benchmarking? ď‚— Benchmarking is an improvement process that is used to

identify best practice within a peer group and facilitate it’s incorporation into your organization. Studying best practices provides the greatest opportunity for gaining a strategic, operational, and financial advantage.

What is Benchmarking? ď‚— Benchmarking is the continuous search for and adaptation of

significantly better practices that leads to superior performance by investigating the performance and practices of other organizations (benchmark partners). In addition, it can create a culture to facilitate the change process.

What is Benchmarking? ď‚— Benchmarking has three main features:

What is Benchmarking?  Benchmarking is not a method for 'copying' the practices of

competitors, but a way of seeking superior process performance by looking outside the industry.  Conditions are never identical  You can pick up critical variables and apply them …  Create a system – a comprehensive set of reinforcing practices that are responsible for success When Benchmarking a System, Adapt What You Find, Don’t Just Copy It

History of Benchmarking  This technique was originally rooted from Japanese industry

members.  Benchmarking was made popular by Xerox in 1980s.  Other significant companies such as Nissan/Infiniti, ICI Fibers, Texas, American Express, Kodak Rover, AT&T, Chevron and 3M have also committed to benchmarking and have successfully used the technique to excel in their respective industries on a global scale.  Benchmarking methodology is based on the plan, do, check, act (PDCA) cycle, also known as Deming cycle, a standard four phase continuous improvement cycle

Why Benchmarking?  Benchmarking gives us the chance of gaining:  Better Awareness of Ourselves (Us)  What we are doing  How we are doing it  How well we are doing it

 Better Awareness of the Best (Them)  What they are doing  How they are doing it  How well they are doing it

Why Benchmarking?  To Obtain an External Perspective of What Is Possible  To Assist in Setting Strategic Targets  To Promote Improvements in Performance  To Establish a Competitive Edge  To Enhance Customer Satisfaction  To Reduce Costs  To Improve Employee Morale  To Achieve Quality Awards  To Survive

When Benchmarking?  If the company’s QMS is not properly developed,    

documented and implemented.

If company’s great strength areas are not measured.

If company’s great weakness areas are not measured.

If company’s great opportunities are not measured.

If customer needs are not assessed and rectified .

Major Benefits of Benchmarking  Product and Process

Improvement  Cost Reduction  Competitive Strategy

Competitive Strategy  The most significant benefit from benchmarking is that it helps

the organization planning and implementing competitive strat  Build core competencies that will help to sustain competitive advantage  Access to a variety of markets  Perceived benefit of product or service will increase  Product or service is hard to imitate  Low-cost leader

 Target specific shift in strategy  Entering new markets  Developing new products

 To create a firm more adaptable to change

Benchmarking Process

Benchmarking Process 1. Planning  Determine the purpose and scope of the project  Select the process to be benchmarked  Choose the team  Define the scope  Develop a flow chart for the process  Establish process measures  Identify benchmarking partners

Benchmarking Process 2. Collecting Data  Conduct background research to gain thorough understanding

on the process and partnering organizations  Use questionnaires to gather information necessary for benchmarking  Conduct site visits if additional information is needed  Conduct interviews if more detail information is needed

Benchmarking Process 3. Analysis ď‚— Analyze quantitative data of partnering organizations and your

organization ď‚— Analyze qualitative data of partnering organizations and your organization ď‚— Determine the performance gap

Benchmarking Process 4. Improving Practices  Report findings and brief management  Develop an improvement implementation plan  Implement process improvements  Monitor performance measurements and track progress  Recalibrate the process as needed

Commonly Benchmarked Performance Measures  Customer-related Results  Financial Ratios  Productivity Ratios  Operating Results  Human Resource Measures  Quality Measures  Market Share Data  Structural Measures

Benchmarking Costs ď‚— The three main types of costs in benchmarking are:

Benchmarking Costs ď‚— Time Costs

Members of the benchmarking team will be investing time in researching problems, finding best practice companies to study, visits, and implementation. This will take them away from their regular tasks for part of each day so additional staff might be required.

Benchmarking Costs ď‚— Visit Costs

This includes hotel rooms, travel costs, meals, a token gift, and lost labor time.

Benchmarking Costs ď‚— Benchmarking Database Costs

Organizations that institutionalize benchmarking into their daily procedures find it is useful to create and maintain a database of best practices and the companies associated with each best practice now.

Types of Benchmarking  Performance or operational benchmarking:

It involves – pricing, technical quality, features and other quality.  Process or functional benchmarking: It involves processes such as billing, order entry or employee training.  Strategic benchmarking: Examines how companies compute and seeks the winning strategies that have led to competitive advantage and market success.

Advantages of Benchmarking  Benchmarking is a systematic method by which organizations can 

    

measure themselves against the best Industry practices.

It promotes superior performance by providing an organized framework through which organization learn how the “ best in class” do things.

Intensive studies of existing practices often lead to identification of non-value added activities and plans for process improvement.

It helps for continuous improvement.

Benchmarking inspire managers (and organization) to compete.

Through Benchmark process organization can borrow ideas, adopt and refine them to gain competitive advantages.

Benchmarking provides a basis for training human resources.

Disadvantages of Benchmarking  The most resistant criticism of Benchmarking comes from the

idea of copying others.  It is not a strategy nor is it intended to be a business philosophy. Therefore, it is a time taking technique.  Benchmarking is not “instant pudding”. It will not improve performance if proper infrastructure of Total Quality Management is not in place.

Benchmarking Ethics ď‚— Since the concept of benchmarking can lead to unscrupulous

and sometimes unethical behavior, the SPI Council on Benchmarking and the International Benchmarking Clearinghouse have established a general code of conduct (Thompson). The code is as follows:

Benchmarking Ethics 

Do not ask competitors for sensitive information. Do not make them feel that if the data is not shared the benchmarking process will end. If you ask the company for sensitive and valuable information, be prepared to give the same in return.  Use an ethical and unbiased third party such as an ombudsman or legal advisor for direct competitor advice.  Treat any information obtained from a benchmarking partner as privileged or “top secret” information. Don't give away any information or potential trade secrets without permission.

Benchmarking Ethics 

When benchmarking with competitors, set up certain rules that state that things will not be discussed that give either company a competitive advantage. Establish the purpose is for both parties to improve or gain benefit. Costs should not be discussed.  Consult with a legal advisor if any information gathering procedure is in doubt.  Do not misrepresent yourself or your organization as being someone or something that you are not.  Show that you are committed to the effectiveness of the process.

And in doing so maintain a professional and honest relationship with your benchmarking partners.

QUALITY CONTROL CIRCLE

Prof. Dr. Mete Gündoğan

What is a Quality Circle? 

A QC is a voluntary group of 6 to 12 employees who perform similar duties and meet at periodic intervals, often with management, to discuss work-related issues and to offer suggestions and ideas for improvements, as in production methods or quality control.  It is a participatory management technique that enlists the help of employees in solving problems related to their own jobs.  Quality Circles is a term used in human resources management that refers to the technique of motivating workers by allowing them input into decisions concerning the production process, thereby increasing productivity and profits.

Characters Of Quality Circle 

  



Circle membership: It is more or less homogeneous group of people usually from the same work areas. However, whenever required experts may be invited for guidance or advice.

Circle size: Usually a group of 6 to 12 members seems quite effective; however, it depends upon the people employed in a particular section.

Voluntary participation: The main objective of QC is attendance and participation in meetings voluntarily without any compulsion.

QC meetings: An hour’s duration is usually quite adequate for a meeting. Whatever may be the frequency, regular meetings should be ensured.

Autonomy: An important ingredient of a QC is the sense of autonomy experienced by its members.

Objectives   

  

 

  

Change in Attitude.

From "I don’t care" to "I do care" Continuous improvement in quality of work life through humanization of work

Self Development Bring out ‘Hidden Potential’ of people People get to learn additional skills.

Development of Team Spirit Eliminate inter departmental conflicts.

Improved Organizational Culture Positive working environment.

Higher motivational level.

Benefits of Quality Circles       

Promote individual self-development Improve overall company performance and corporate image Improvement in human relations Help in more effective team work in organization Help in improving the productivity Enhanced interest in job Improve communication within employee and management in an organization

Structure of a Quality Circle

Structure of a Quality Circle   

  

Steering committee: This is at the top of the structure.

It is headed by a senior executive and includes representatives from the top management personnel and human resources development people.

Identify Vision, Mission, Quality policy, Objectives and introducing them to the whole organization Employ Facilitator to support QCC Arranging competition, Performing Quality Day through out the institution

Structure of a Quality Circle ďƒź 

Co-coordinator: He may be a Personnel or Administrative officer who coordinates and supervises the work of the facilitators and administers the programme.

Structure of a Quality Circle        

Facilitator: He may be a senior supervisory officer.

He coordinates the works of several quality circles through the Circle leaders.

Facilitator must have access to all offices of the institute Traditionally is selected among mid level management Act as a coordinator between the QCC & organization Arranging training program & providing training Reporting the improvement of QCC in the steering committee

Structure of a Quality Circle      

Circle leader: Each & Every circle will have a leader QCC member will select one as a leader among them Leaders may be from lowest level workers or Supervisors.

A Circle leader organizes and conducts Circle activities.

Ensure participation of QCC members without any hesitation

Structure of a Quality Circle    

Circle members : They may be staff workers.

Without circle members the programme cannot exist. They are the lifeblood of quality circles.

They should attend all meetings as far as possible, offer suggestions and ideas, participate actively in group process, take training seriously with a receptive attitude.

Quality Circle Process        

List out problems Discussion over the list of problems Selected problem will be analyzed Arrive at solution Present it to management for action Management studies the recommendations Implementation QC members are recognised & rewarded.

How Do Quality Circles Work? 

All members of a Circle need to receive training Members need to be empowered Members need to have the support of Senior Management Characteristics

      

Volunteers Set Rules and Priorities Decisions made by Consensus Use of organized approaches to Problem-Solving

Formation of Quality Circles      

Start on the Shop Floor Base Circle on Training Allow the Circle to Form Itself Do The Training Properly Support with Information Required Provide Skills and Experience

Reasons for failure of Quality Circles        

Inadequate Training Unsure of Purpose Not truly Voluntary Lack of Management Interest Quality Circles are not really empowered to make decisions.

They have not had enough training They have not been given sufficient autonomy The Quality Circles have been started in isolation and not part of a wider programme of Company-wide Continuous Improvement