Customer and Market Focus Information and Analysis Malcolm Baldrige National Quality Award Established 1987, Revised in 1999 Leadership Strategic Planning Customer and Market Focus Information and Analysis Human Resource Focus Process Management Business Results

Components of Quality Design quality: Inherent value of the product in the marketplace Dimensions include: Performance, Features, Reliability, Durability, Serviceability, Response, Aesthetics, and Reputation. Conformance quality: Degree to which the product or service design specifications are met Quality at the source: person who does the work takes responsibility for making sure the output meets specifications

Internal Failure Costs Costs of Quality External Failure Costs Appraisal Costs Prevention Costs Internal Failure Costs Costs of Quality

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 six standard deviations of the process outputs

Six Sigma Quality: DMAIC Cycle (Cont.) 1. Define (D) Customers and their priorities 2. Measure (M) Process and its performance 3. Analyze (A) Causes of defects 4. Improve (I) Remove causes of defects 5. Control (C) Maintain quality

Basic Causes of Variation Assignable causes are factors that can be clearly identified and possibly managed. Common causes are inherent to the production process. In order to reduce variation due to common causes, the process must be changed. Key: Determining which is which!

Types of Processes Design ETO Customer Order Source MTS Customer Order Manufacture Fabricate Assemble MTO Customer Order ATO Customer Order Distribute Time

Process Performance Metrics Throughput time = Average time for a unit to move through the entire system Cycle time = Average time between completion of units Throughput rate = 1 Cycle time

Process Performance Metrics (Continued) Little’s Law: Throughput time = Work-in-process Throughput rate

Process-Oriented Layout Design places departments with large flows of material or people together Dept. areas have similar processes e.g., All x-ray machines in same area Used with process-focused processes Examples Hospitals Machine shops © 1995 Corel Corp.

Process-Oriented Layout Floor Plan Office Table Saws © 1995 Corel Corp. Drill Presses Tool Room © 1995 Corel Corp.

Product-Oriented Layout Facility organized around product Design minimizes line imbalance Delay between work stations Types: Fabrication line; assembly line Examples Auto assembly line Brewery Paper mfg. © 1984-1994 T/Maker Co.

Cellular Layout - Group Technology (Work Cells) Special case of process-oriented layout Consists of different machines brought together to make a product Group Technology Benefits: Better human relations Improved operator expertise Less in-process inventory and material handling Faster production setup

Work Cell Floor Plan Saws Drills Office Work Cell Tool Room

Example of Line Balancing: Step 5: Make assignments I 4.2 A,C A,C A A C B D E F G H 2 3.25 1.2 .5 1 1.4 1.1 2.2 B,C B B - .2 .2 G,C II 4.2 G,C G,C C - .95 .95 D,G III 4.2 D,G D,G D 3.0 G,E G,E E 2.5 G,F G,F F Task Followers Time (Mins) A 6 2 C 4 3.25 D 3 1.2 B E 0.5 F 1 1.1 G H 1.4 1.4 G G G - .4 .4 H IV 4.2 H H H 2.8 23

Service Businesses Facilities-based services - customer goes to the facility Field-based services - facility goes to the customer

Internal Services Internal Supplier Internal Customer External

The Service Triangle The Service Strategy The People Systems The Customer

Example Balance for 3 units/hour and compute theoretical min number of stations (primary: longest task time; secondary: most followers) 5 C 10 Min. 11 3 7 3 A B F G I 4 D 12 11 E H

Example of Line Balancing: Step 2: Determine Cycle Time Question: Suppose we only have demand for 3 units per hour. What would our cycle time have to be? Answer: Therefore, the maximum task time allowed in a single station is 20 minutes

Example of Line Balancing: Step 3: Determine Theoretical Minimum Number of Workstations Question: What is the theoretical minimum number of workstations for this problem? Answer:

For this example, we’ll use Example of Line Balancing: Step 4: Rules To Follow for Loading Workstations A number of simple rules have been proposed for assigning tasks to work stations. Assign Tasks With The Most Following Tasks First Assign Tasks With the Longest Task Time First For this example, we’ll use Primary: Assign tasks in order of the longest operating time Secondary (tie-breaking): Assign tasks in order of the largest number of following tasks.

Example of Line Balancing: Step 5: Make assignments A B C D F E G H I Workstation Time Left  Eligible Will Fit Assign Idle Time I 20 10 A B,E - II 8 B,H E III 9 4 C,D,H D,H C,D D B C IV 6 F,H F G H V 13 Task Task Time (minutes) Followers A 10 8 B 11 5 C 3 D 4 E 12 2 F G 7 1 H I 23