Introduction to P/OM

Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
Production/Operations
Management
Dr. Eliot Elfner
St. Norbert College
Spring 2009
Lean Manufacturing and
Quality Processes
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
2
TOPICS
Discussion of topics
Lean Manufacturing
Quality Processes

Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
3
Lean Production
Lean Production can be defined as an
integrated set of activities designed to
achieve high-volume production using
minimal inventories (raw materials, work
in process, and finished goods)
Lean Production also involves the
elimination of waste in production effort
Lean Production also involves the timing
of production resources (i.e., parts arrive
at the next workstation just in time)

Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
4
The Toyota Production System
Based on two philosophies:
1. Elimination of waste

2. Respect for people

Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
5
Elimination of Waste
1. Focused factory networks
2. Group technology
3. Quality at the source
4. JIT production
5. Uniform plant loading
6. Kanban production control
system
7. Minimized setup times
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
6
Minimizing Waste:
Focused Factory
Networks
Coordination
System
Integration
These are small
specialized plants that
limit the range of
products produced
(sometimes only one
type of product for an
entire facility)
Some plants
in Japan
have as few
as 30 and as
many as
1000
employees
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
7
Minimizing Waste:
Group Technology (Part 1)
Using Departmental Specialization for plant layout
can cause a lot of unnecessary material movement
Note how the flow lines are going back
and forth
Saw Saw
Lathe Press Press
Grinder
Lathe Lathe
Saw
Press
Heat Treat
Grinder
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
8
Minimizing Waste:
Group Technology (Part 2)
Revising by using Group Technology Cells can reduce
movement and improve product flow
Press
Lathe
Grinder
Grinder
A
2
B Saw
Heat Treat
Lathe Saw
Lathe
Press Lathe
1
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
9
Minimizing Waste:
Uniform Plant Loading (heijunka)
Suppose we operate a production plant that produces a single
product. The schedule of production for this product could be
accomplished using either of the two plant loading schedules below.
Not uniform Jan. Units Feb. Units Mar. Units Total
1,200 3,500 4,300 9,000
Uniform Jan. Units Feb. Units Mar. Units Total
3,000 3,000 3,000 9,000
How does the uniform loading help save labor costs?
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
10
Minimizing Waste: Inventory
Hides Problems
Work in
process
queues
(banks)
Change
orders
Engineering design
redundancies
Vendor
delinquencies
Scrap
Design
backlogs
Machine
downtime
Decision
backlogs
Inspection
backlogs
Paperwork
backlog
Example: By
identifying defective
items from a vendor
early in the
production process
the downstream work
is saved
Example: By
identifying defective
work by employees
upstream, the
downstream work is
saved
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
11
Minimizing Waste: Kanban Production
Control Systems
Storage
Part A
Machine
Center
Assembly
Line
Material Flow
Card (signal)
Flow
Withdrawal
kanban
Once the Production kanban
is received, the Machine
Center produces a unit to
replace the one taken by the
Assembly Line people in the
first place
This puts the
system back
were it was
before the item
was pulled
The process begins by the Assembly
Line people pulling Part A from
Storage
Production kanban
Storage
Part A
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
12
Determining the Number of
Kanbans Needed
Setting up a kanban system requires
determining the number of kanbans
cards (or containers) needed
Each container represents the
minimum production lot size
An accurate estimate of the lead time
required to produce a container is key
to determining how many kanbans
are required

Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
13
The Number of Kanban Card Sets
k = Number of kanban card sets (a set is a card)
D = Average number of units demanded over some
time period
L = lead time to replenish an order (same units of
time as demand)
S = Safety stock expressed as a percentage of
demand during leadtime
C = Container size

k =
Expected Demand During Lead Time + Safety Stock
Size of the Container
k =
DL(1+S)
C
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
14
Example of Kanban Card
Determination: Problem Data
A switch assembly is assembled in batches
of 4 units from an upstream assembly
area and delivered in a special container to a
downstream control-panel assembly
operation
The control-panel assembly area requires 5
switch assemblies per hour
The switch assembly area can produce a
container of switch assemblies in 2 hours
Safety stock has been set at 10% of needed
inventory

Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
15
Example of Kanban Card
Determination: Calculations
Always round up!
k =
Expected Demand During Lead Time + Safety Stock
Size of the Container
k =
DL(1+S)
C
=
(5)*(1)*(1.1)
4
=
2.75, or 3
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
16
Respect for People
Level payrolls
Cooperative employee unions
Subcontractor networks
Bottom-round management style
Quality circles (Small Group
Involvement Activities or SGIAs)

Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
17
Toyota Production Systems
Four Rules
1. All work shall be highly specified as to
content, sequence, timing, and outcome
2. Every customer-supplier connection must be
direct, and there must be an unambiguous
yes-or-no way to send requests and receive
responses
3. The pathway for every product and service
must be simple and direct
4. Any improvement must be made in
accordance with the scientific method, under
the guidance of a teacher, at the lowest
possible level in the organization
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
18
Lean Implementation Requirements:
Design Flow Process
Link operations
Balance workstation capacities
Redesign layout for flow
Emphasize preventive maintenance
Reduce lot sizes
Reduce setup/changeover time

Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
19
Lean Implementation Requirements:
Total Quality Control
Worker responsibility
Measure SQC
Enforce compliance
Fail-safe methods
Automatic inspection
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
20
Lean Implementation Requirements:
Stabilize Schedule
Level schedule
Underutilize capacity
Establish freeze windows
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
21
Lean Implementation Requirements:
Kanban-Pull
Demand pull
Backflush
Reduce lot sizes

Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
22
Lean Implementation Requirements:
Work with Vendors
Reduce lead times
Frequent deliveries
Project usage requirements
Quality expectations

Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
23
Lean Implementation Requirements:
Reduce Inventory More
Look for other areas
Stores
Transit
Carousels
Conveyors

Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
24
Lean Implementation Requirements:
Improve Product Design
Standard product configuration
Standardize and reduce number
of parts
Process design with product
design
Quality expectations

Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
25
Lean Implementation Requirements:
Concurrently Solve Problems
Root cause
Solve permanently
Team approach
Line and specialist responsibility
Continual education

Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
26
Lean Implementation Requirements:
Measure Performance
Emphasize improvement
Track trends

Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
27
Lean in Services (Examples)
Organize Problem-Solving
Groups
Upgrade Housekeeping
Upgrade Quality
Clarify Process Flows
Revise Equipment and Process
Technologies

Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
28
Lean in Services (Examples)
Level the Facility Load
Eliminate Unnecessary Activities
Reorganize Physical
Configuration
Introduce Demand-Pull
Scheduling
Develop Supplier Networks
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
29
Quality Processes
A little history
Post WWII Japan almost a clean slate

Limited resources, low volumes new approach

Influences

TWI employees involved in process improvement

Deming & Juran

Poor quality is responsibility of management

Tools for process improvement
Formative years of TQM & JIT
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
30
Total Quality Management
TQM is an organization-wide effort
directed towards the continuous
improvement of quality
One simple definition of high quality
is: exceeds customers
expectations
Key pointquality is tied to view of
customer (e.g., not specifications)
In brief
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
31
Putting TQM principles
into practice
Customer focus

Employee empowerment

Data-based decision
making management by
fact
Continuous improvement in quality how?
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
32
Definitions of Quality
Quality as Excellence
Quality as Conformance to
Specifications
Quality as Fitness for Use
Quality as Value for the Price
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
33
Total Quality Management
Philosophy of management
Part of mission/vision/purpose
Implemented through long range
strategic planning
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
34
Quality Related
Product Characteristics
Reliability

Durability

Serviceability
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
35
Quality-Related
Service Characteristics
Reliability
Tangibles
Responsiveness
Assurance
Empathy
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
36
Quality Specifications
Design quality: Inherent value of the
product in the marketplace
Dimensions include:
Performance
Features
Reliability/Durability
Serviceability
Aesthetics
Perceived Quality.
Conformance quality: Degree to which the
product or service design specifications
are met
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
37
Costs of Quality
External Failure
Costs
Appraisal Costs
Prevention Costs
Internal Failure
Costs
Costs of
Quality
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
POM Tools
Forecasting
Lean Manufacturing
Project Management
Simulation
Statistical Process Control
38
Series of standards agreed upon by
the International Organization for
Standardization (ISO)
Adopted in 1987
More than 100 countries
A prerequisite for global
competition?
ISO 9000 directs you to "document
what you do and then do as you
documented"
ISO 9000
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
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39
Six Sigma Quality
A philosophy and set
of methods
companies use to
eliminate defects
in their products
and processes
Seeks to reduce
variation in the
processes that
lead to product
defects
The name, six
sigma refers to
the variation that
exists within plus
or minus three
standard
deviations of the
process outputs
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Six Sigma Quality (cont)
Six Sigma allows managers to readily
describe process performance using a
common metric: Defects Per Million
Opportunities (DPMO)
1,000,000 x

No. of units x

Number of defects
(
(
(

(





=
DPMO
Number of
opportunities
for error per
unit
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Example of Defects Per Million
Opportunities (DPMO) calculation.
Suppose we observe 200 letters
delivered incorrectly to the wrong
addresses in a small city during a
single day when a total of 200,000
letters were delivered. What is the
DPMO in this situation?
| |
000 , 1 = = 1, 000, 000 x
200, 000 x 1
200
DPMO
So, for every one
million letters
delivered this
citys postal
managers can
expect to have
1,000 letters
incorrectly sent
to the wrong
address.
Cost of Quality: What might that DPMO mean
in terms of over-time employment to
correct the errors?
Six Sigma Quality (cont)
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Six Sigma Quality:
DMAIC Cycle
Define, Measure, Analyze, Improve, and
Control (DMAIC)
Developed by General Electric as a
means of focusing effort on quality
using a methodological approach
Overall focus of the methodology is to
understand and achieve what the
customer wants
A 6-sigma program seeks to reduce the
variation in the processes that lead to
these defects
DMAIC consists of five steps.
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Six Sigma Quality:
DMAIC Cycle (cont)
1. Define (D)
2. Measure (M)
3. Analyze (A)
4. Improve (I)
5. Control (C)
Customers and their priorities
Process and its performance
Causes of defects
Remove causes of defects
Maintain quality
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Total Quality Requirements
Strategic Quality Planning
Clear Focus on Customer Satisfaction
Continuous Improvement of Key
Processes
Effective Collection & Analysis of
Information
Effective Use of Teamwork and
Training
Effective Design of Products and
Services
Effective Leadership
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Components of an
OPI Culture
OPI as Central
Focus of
Mission Statement
Stakeholder
Linkages
Passionate
Commitment
to Continuous
Improvement
Commitment to
Education/Training
Team Development
Bias Toward
Evidence Based
Decision
Making
CULTURE OF
ONGOING
PROCESS
IMPROVEMENT
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Characteristics of
OPI Systems
Vision/mission/purpose for quality
Focus on supplier/customer
linkages
PASSIONATE commitment to
continuous improvement
Commitment to teaming/training
Bias for data based decision
making
Introduction to P/OM
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47
Strategic Quality
Management
Using the quality of products
and services to increase a
companys share of the market
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48
Implementing TQM
Identify Critical Business Issues
Secure top management commitment
Provide initial training
Identify customer requirements
Identify key processes
Provide specific skills training
Collect and analyze data
Change the process
Reqmts
met?
Continue to improve processes
no
yes
Introduction to P/OM
Management
P/OM and SCM
DSS
QMS/OPI
Theory of Constraints
The Goal
Introduction to Supply
Chain Management
SCM Acquisition
SCM Maintain
SCM Transform
SCM Distribute
Webster Chapters
Information Technology
Foundations
Demand Management
Supply Management
Inventory Management
Capacity Management
Production Management
Transportation Management
Quality Management
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Lean Manufacturing
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Simulation
Statistical Process Control
Production/Operations
Management
Dr. Eliot Elfner
St. Norbert College
Spring 2009
Lean Manufacturing and
Quality Processes
The End