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
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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
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 ď€
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