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© 2006 Prentice Hall, Inc. 10 1 Human Resource Strategy The objective of a human resource strategy is to manage labor and design jobs so people are effectively and efficiently utilized 1. People should be effectively utilized within the constraints of other operations management decisions 2. People should have a reasonable quality of work life in an atmosphere of mutual commitment and trust

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  • © 2006 Prentice Hall, Inc. 10 – 1

    Human Resource Strategy

    The objective of a human resourcestrategy is to manage labor and

    design jobs so people are effectivelyand efficiently utilized

    1. People should be effectively utilizedwithin the constraints of otheroperations management decisions

    2. People should have a reasonable qualityof work life in an atmosphere of mutualcommitment and trust

  • © 2006 Prentice Hall, Inc. 10 – 2

    Constraints on HumanResource Strategy

    Figure 10.1

    HUMANRESOURCESTRATEGY

    Product strategy• Skills needed• Talents needed• Materials used• Safety

    Schedules• Time of day• Time of year

    (seasonal)• Stability of

    schedule

    When

    Location strategy• Climate• Temperature• Noise• Light• Air quality

    Process strategy• Technology• Machinery and

    equipment used• Safety

    Individual differences• Strength and

    fatigue• Information

    processing andresponse

    Who

    Layout strategy• Fixed position• Process• Assembly line• Work cell• Product

  • © 2006 Prentice Hall, Inc. 10 – 3

    Job Design

    Specifying the tasks that constitutea job for an individual or a group

    1. Job specialization

    2. Job expansion

    3. Psychological components

    4. Self-directed teams

    5. Motivation and incentive systems

    6. Ergonomics and work methods

    7. Visual workplace

  • © 2006 Prentice Hall, Inc. 10 – 4

    Labor Specialization

    The division of labor into unique tasks

    First suggested by Adam Smith in 1776

    1. Development of dexterity and fasterlearning

    2. Less loss of time

    3. Development of specialized tools

    Later Charles Babbage (1832) addedanother consideration

    4. Wages exactly fit the required skill

  • © 2006 Prentice Hall, Inc. 10 – 5

    Job Expansion

    Adding more variety to jobs

    Intended to reduce boredomassociated with labor specialization

    Job enlargement

    Job rotation

    Job enrichment

    Employee empowerment

  • © 2006 Prentice Hall, Inc. 10 – 6

    Psychological Componentsof Job Design

    Human resource strategy requiresconsideration of the psychological

    components of job design

  • © 2006 Prentice Hall, Inc. 10 – 7

    Job Design Continuum

    Specialization

    Enlargement

    Self-directedteams

    Empowerment

    Enrichment

    Figure 10.3

    Job expansion

    Increasingreliance onemployee’scontributionandincreasingresponsibilityaccepted byemployee

  • © 2006 Prentice Hall, Inc. 10 – 8

    Self-Directed Teams

    Group of empowered individualsworking together to reach acommon goal

    May be organized for long-term orshort-term objectives

    Effective because Provide employee empowerment

    Ensure core job characteristics

    Meet individual psychological needs

  • © 2006 Prentice Hall, Inc. 10 – 9

    Self-Directed Teams

    Ensure those who have legitimatecontributions are on the team

    Provide management support

    Ensure the necessary training

    Endorse clear objectives and goals

    Financial and non-financial rewards

    Many teams have definite life cycles

    To maximize effectiveness, managers should

  • © 2006 Prentice Hall, Inc. 10 – 10

    Benefits of Teams andExpanded Job Designs

    Improved quality of work life

    Improved job satisfaction

    Increased motivation

    Allows employees to accept moreresponsibility

    Improved productivity and quality

    Reduced turnover and absenteeism

  • © 2006 Prentice Hall, Inc. 10 – 11

    Limitations of JobExpansion

    1. Higher capital cost

    2. Individuals may prefer simple jobs

    3. Higher wages rates for greater skills

    4. Smaller labor pool

    5. Increased accident rates

    6. Current technology may not lend itselfto job expansion

  • © 2006 Prentice Hall, Inc. 10 – 12

    Motivation and IncentiveSystems

    Bonuses - cash or stock options

    Profit-sharing - profits for distribution toemployees

    Gain sharing - rewards for improvements

    Incentive plans - typically based onproduction rates

    Knowledge-based systems - reward forknowledge or skills

  • © 2006 Prentice Hall, Inc. 10 – 13

    Ergonomics and WorkMethods

    Ergonomics is the study of theinterface between man andmachine

    Often called human factors

    Operator input to machines

    Feedback to operators

  • © 2006 Prentice Hall, Inc. 10 – 14

    Ergonomics and WorkMethods

    The work environment

    Illumination/Tata cahaya

    Noise/Tata suara

    Temperature and Humidity

    Kebersihan dan kesehatan

    Keamanan dan keselamatan

    Warna

    Lay out

    Music

  • © 2006 Prentice Hall, Inc. 10 – 15

    Job Design and Keyboards

    Figure 10.4

  • © 2006 Prentice Hall, Inc. 10 – 16

    Levels of Illumination

    Task Condition Type of Taskor Area

    IlluminationLevel

    Type ofIllumination

    Small detail,extremeaccuracy

    Sewing, inspectingdark materials

    100 Overheadceiling lightsand desk lamp

    Normal detail,prolongedperiods

    Reading, partsassembly,general officework

    20-50 Overheadceiling lights

    Good contrast,fairly largeobjects

    Recreationalfacilities

    5-10 Overheadceiling lights

    Large objects Restaurants,stairways,warehouses

    2-5 Overheadceiling lights

    Table 10.2

  • © 2006 Prentice Hall, Inc. 10 – 17

    Decibel LevelsEnvironment Common Noise

    Noises Sources Decibels

    Jet takeoff (200 ft) 120|

    Electric furnace area Pneumatic hammer 100 Very annoying|

    Printing press plant Subway train (20 ft) 90|

    Pneumatic drill (50 ft) 80 Ear protectionInside sports car | required if

    (50 mph) Vacuum cleaner (10 ft) 70 exposed for 8Near freeway Speech (1 ft) | or more hours

    60 IntrusivePrivate business office |Light traffic (100 ft) Large transformer (200 ft) 50 Quiet

    |Minimum levels, Chicago 40

    residential areas at night Soft whisper (5 ft) |Studio (speech) 30 Very quiet

    Table 10.3

  • © 2006 Prentice Hall, Inc. 10 – 18

    Methods Analysis

    Focuses on how task is performed

    Used to analyze

    1. Movement of individuals or material

    Flow diagrams

    2. Activities of human and machine andcrew activity

    Activity charts

    3. Body movement

    Micro-motion charts

  • © 2006 Prentice Hall, Inc. 10 – 19

    Flow Diagram

    Storage bins

    Machine 1

    Mach. 2

    Mach. 3 Mach. 4

    From

    pressmach. Paint

    shop

    Welding

    Figure 10.5 (a)

  • © 2006 Prentice Hall, Inc. 10 – 20

    Storagebins

    Machine 1

    Machine 2

    Machine 3

    Machine 4

    Frompressmach.

    Paintshop

    Welding

    Flow Diagram

    Figure 10.5 (b)

  • © 2006 Prentice Hall, Inc. 10 – 21

    ProcessChart

    Figure 10.5 (c)

  • © 2006 Prentice Hall, Inc. 10 – 22

    Activity Chart

    Figure 10.6

  • © 2006 Prentice Hall, Inc. 10 – 23

    Operation Chart

    Figure 10.7

  • © 2006 Prentice Hall, Inc. 10 – 24

    The Visual Workplace

    Use low-cost visual devices toshare information quickly andaccurately

    Displays and graphs replaceprintouts and paperwork

    Able to provide timely informationin a dynamic environment

    System should focus onimprovement

  • © 2006 Prentice Hall, Inc. 10 – 25

    The Visual Workplace

    Present the big picture

    Performance

    Housekeeping

    Visual signals can take many formsand serve many functions

  • © 2006 Prentice Hall, Inc. 10 – 26

    Ethics and the WorkEnvironment

    1. Keadilan dan etika merupakan kendala pentingdari desain pekerjaan

    2. Isu-isu penting mungkin berhubungandengan kesempatan yang sama, upah yangsama untuk pekerjaan yang sama, dan kondisi kerjayang aman

    3. Membantu untuk bekerja sama dengan instansipemerintah, serikat buruh, asuransi,dan karyawan

  • © 2006 Prentice Hall, Inc. 10 – 27

    Labor Standards

    1. Perencanaan tenaga kerja yangefektif bergantung pada pengetahuan tentangtenaga kerja yang dibutuhkan

    2. Standar Tenaga kerja adalah jumlah waktuyang diperlukan untuk melakukanpekerjaan atau bagian dari pekerjaan

    3. Standar perburuhan Akurat membantu menentukan kebutuhan tenagakerja, biaya,dan kerja yang adil

  • © 2006 Prentice Hall, Inc. 10 – 28

    Labor Standards and WorkMeasurement

    1. Dimulai pada awal abad ke-202. Penting untuk kedua organisasi manufaktur

    dan jasa3. Diperlukan untuk menentukan kebutuhan staf4. Penting untuk sistem insentif kerja

  • © 2006 Prentice Hall, Inc. 10 – 29

    Meaningful Standards HelpDetermine

    1. Ketenagakerjaan item yang diproduksi

    2. Kebutuhan staf

    3. Biaya dan perkiraan waktu

    4. ukuran kru dan menyeimbangkan kerja

    5. perencanaan produksi

    6. rencana insentif upah Dasar

    7. Efisiensi karyawan

  • © 2006 Prentice Hall, Inc. 10 – 30

    Labor Standards

    May be set in four ways:

    1. Historical experience

    2. Time studies

    3. Predetermined time standards

    4. Work sampling

  • © 2006 Prentice Hall, Inc. 10 – 31

    Work Sampling TimeStudies

    Salespeople

    Figure S10.3

    Telephonesales12%

    Telephonewithin firm

    13%

    Lunch andpersonal

    10%

    Meetingsand other

    8%

    Paperwork17%

    Travel20%

    Sales inperson

    20%

  • © 2006 Prentice Hall, Inc. 10 – 32

    Work Sampling TimeStudies

    Figure S10.3

    Productivework67%

    Startup/pep talk3%

    Breaks and lunch10%

    Dead timebetween tasks

    13%

    Cleanup3%

    Unscheduled tasksand downtime

    4%

    Assembly-LineEmployees

  • © 2006 Prentice Hall, Inc. 10 – 33

    Diskusi

    Penetapan UMK

  • © 2006 Prentice Hall, Inc. 10 – 34

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  • © 2006 Prentice Hall, Inc. 10 – 37

    Copas #1 : “Di sektor sandang ada penambahan 10komponen yang ditetapkan buruh sebagai komponenkelayakan. Penambahan tersebut antaralain kepemilikan jaket kulit sintetis (satu potong pertahun), baju tidur setara katun (enam potong pertahun), sandal semidinas kulit (dua pasang pertahun), tas kerja ukuran sedang (satu buah pertahun), sapu tangan (enam buah per tahun), dompetkulit (satu buah per tahun), jam tangan, jam dinding,payung, dan topi (masing-masing satu unit pertahun).”

  • © 2006 Prentice Hall, Inc. 10 – 38

    Copas #2 : “Di sektor perumahan ada penambahan 12 item.Antara lain dispenser (satu unit per tiga tahun), mesin cuci(satu unit per tiga tahun), sapu lidi dan sapu ijuk (dua unit pertahun), talenan plastik (satu unit per dua tahun), tikar (duaunit per dua tahun) dan gunting stainless (satu unit pertahun).”Copas #3 : “Di sektor pendidikan ada penambahan satukomponen, yakni televisi minimal ukuran 19 inci (satu unit pertiga tahun).”Copas #4 : “Di sektor kesehatan ada pengurangan komponen.Semula adakomponen sisir dan deodorant biasa minimal satuunit per tahun. Namun, komponen itu kini dimampatkan padasarana kesehatan, bersama penambahan subkomponen lainseperti gunting kuku, cotton bud, parfum, lipstik, hand andbody lotion dan pembersih muka. Dua komponen itu digantidengan satu komponen suplemen kesehatan.”

  • © 2006 Prentice Hall, Inc. 10 – 39

    Copas #5 : “Di sektor transportasi dankemasyarakatan ada penambahan dua komponen,yakni handphone minimal satu unit besertapulsa yang belum ditentukan besarannya. Selain itu,ada penambahan komponen kegiatankemasyarakatan mencakup iuran keamanan, iuransampah, dana sosial, dan iuran RT yang perludibayarkan tiap tahun.”Copas #6 : “Terakhir, di sektor rekreasi dantabungan tak ada penambahan komponen.Namun, besaran untuk komponen tabungan naik daridua persen tahun lalu menjadi tiga persen tahun ini,dihitung dari total 84 komponen yang diajukanburuh sebagai komponen hidup layak 2014.”

  • © 2006 Prentice Hall, Inc. 10 – 40

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  • © 2006 Prentice Hall, Inc. 10 – 44

    Instruksi Presiden (Inpres) No. 9/2013 yangmengatur penetapan UMK berdasarkan

    produktifitas pekerja/buruh

  • © 2006 Prentice Hall, Inc. 10 – 45

    Equal pay for equal work,equal pay for equal

    performance

  • © 2006 Prentice Hall, Inc. 10 – 46

    The Strategic Importanceof the Supply Chain

    Supply-chain management is theintegration of the activities thatprocure materials and services,

    transform them into intermediategoods and the final product, and

    deliver them to customers

    Competition is no longer betweencompanies; it is between supply chains

  • © 2006 Prentice Hall, Inc. 10 – 47

    •1-10

    What Supply Chain Managementdoes for a company

    1. Improves operations

    2. Increases levels of outsourcing

    3. Decreases transportation costs

    4. Reduces Competitive pressures

    5. Increases globalization

    6. Increases importance of e-commerce

    7. Reduces the Complexity of supplychains

    8. Helps Manage and minimizeinventories

  • © 2006 Prentice Hall, Inc. 10 – 48

    •1-13

    •Benefits of Supply Chain Management

    • Lower inventories

    • Higher productivity• Shorter lead times

    • Higher profits

    • Greater customer loyalty

    •1-13

  • © 2006 Prentice Hall, Inc. 10 – 49

    A Supply Chain

    Figure 11.1

  • © 2006 Prentice Hall, Inc. 10 – 50

    Make-or-Buy Decisions

    1. Maintain core competence

    2. Lower production cost

    3. Unsuitable suppliers

    4. Assure adequate supply (quantity or delivery)

    5. Utilize surplus labor or facilities

    6. Obtain desired quality

    7. Remove supplier collusion

    8. Obtain unique item that would entail a prohibitivecommitment for a supplier

    9. Protect personnel from a layoff

    10. Protect proprietary design or quality

    11. Increase or maintain size of company

    Reasons for Making

    Table 11.4

  • © 2006 Prentice Hall, Inc. 10 – 51

    Make-or-Buy Decisions

    1. Frees management to deal with its primarybusiness

    2. Lower acquisition cost

    3. Preserve supplier commitment

    4. Obtain technical or management ability

    5. Inadequate capacity

    6. Reduce inventory costs

    7. Ensure alternative sources

    8. Inadequate managerial or technical resources

    9. Reciprocity

    10. Item is protected by a patent or trade secret

    Reasons for Buying

    Table 11.4

  • © 2006 Prentice Hall, Inc. 10 – 52

    Outsourcing

    Transfers traditional internalactivities and resources of a firm tooutside vendors

    Utilizes the efficiency that comeswith specialization

    Firms outsource informationtechnology, accounting, legal,logistics, and production

  • © 2006 Prentice Hall, Inc. 10 – 53

    Supply-Chain Strategies

    Negotiating with many suppliers

    Long-term partnering with fewsuppliers

    Vertical integration

    Keiretsu

    Virtual companies that usesuppliers on an as needed basis

  • © 2006 Prentice Hall, Inc. 10 – 54

    Many Suppliers

    Commonly used for commodityproducts

    Purchasing is typically based onprice

    Suppliers are pitted against oneanother

    Supplier is responsible fortechnology, expertise, forecasting,cost, quality, and delivery

  • © 2006 Prentice Hall, Inc. 10 – 55

    Few Suppliers

    Buyer forms longer termrelationships with fewer suppliers

    Create value through economies ofscale and learning curveimprovements

    Suppliers more willing to participatein JIT programs and contributedesign and technological expertise

    Cost of changing suppliers is huge

  • © 2006 Prentice Hall, Inc. 10 – 56

    Vertical Integration

    Figure 11.2

    Raw material(suppliers)

    Iron ore Silicon Farming

    Backwardintegration

    Steel

    Currenttransformation

    AutomobilesIntegrated

    circuitsFlour milling

    Forward integrationDistribution

    systemsCircuit boards

    Finished goods(customers) Dealers

    ComputersWatches

    CalculatorsBaked goods

    Vertical Integration Examples of Vertical Integration

  • © 2006 Prentice Hall, Inc. 10 – 57

    Vertical Integration

    Developing the ability to produce goods orservice previously purchased

    Integration may be forward, towards thecustomer, or backward, towards suppliers

    Can improve cost, quality, and inventorybut requires capital, managerial skills, anddemand

    Risky in industries with rapid technologicalchange

  • © 2006 Prentice Hall, Inc. 10 – 58

    Vendor Selection

    Negotiations

    Cost-Based Price Model - supplieropens books to purchaser

    Market-Based Price Model - pricebased on published, auction, orindexed price

    Competitive Bidding - used forinfrequent purchases but may makeestablishing long-term relationshipsdifficult

  • © 2006 Prentice Hall, Inc. 10 – 59

    Vendor Evaluation

    Criteria WeightsScores

    (1-5)Weightx Score

    Engineering/research/innovation skills .20 5 1.0

    Production process capability(flexibility/technical assistance)

    .15 4 .6

    Distribution/delivery capability .05 4 .2

    Quality systems and performance .10 2 .2

    Facilities/location .05 2 .1

    Financial and managerial strength(stability and cost structure)

    .15 4 .6

    Information systems capability (e-commerce, Internet)

    .10 2 .2

    Integrity (environmental compliance/ethics)

    .20 5 1.0

    Total 1.00 3.9

  • © 2006 Prentice Hall, Inc. 10 – 60

    • Have a common goal

    • Mutual benefit

    • Mutual trust

    • Transparent

    • Long term relationship

    • Continuous improvement in qualityand cost

    The Spirit of Partnership

  • © 2006 Prentice Hall, Inc. 10 – 61

    OperationsManagementOperationsManagementChapter 14 –Material RequirementsPlanning (MRP) and ERP

    PowerPoint presentation to accompanyHeizer/RenderPrinciples of Operations Management, 7eOperations Management, 9e

  • © 2006 Prentice Hall, Inc. 10 – 62

    Benefits of MRP

    1. Better response to customerorders

    2. Faster response to marketchanges

    3. Improved utilization of facilitiesand labor

    4. Reduced inventory levels

  • © 2006 Prentice Hall, Inc. 10 – 63

    Dependent Demand

    The demand for one item is relatedto the demand for another item

    Given a quantity for the end item,the demand for all parts andcomponents can be calculated

    In general, used whenever aschedule can be established for anitem

    MRP is the common technique

  • © 2006 Prentice Hall, Inc. 10 – 64

    Dependent Demand

    1. Master production schedule

    2. Specifications or bill of material

    3. Inventory availability

    4. Purchase orders outstanding

    5. Lead times

    Effective use of dependent demandinventory models requires thefollowing

  • © 2006 Prentice Hall, Inc. 10 – 65

    Master Production Schedule(MPS)

    Specifies what is to be made and when

    Must be in accordance with the aggregateproduction plan

    Inputs from financial plans, customerdemand, engineering, supplier performance

    As the process moves from planning toexecution, each step must be tested forfeasibility

    The MPS is the result of the productionplanning process

  • © 2006 Prentice Hall, Inc. 10 – 66

    Master Production Schedule(MPS)

    MPS is established in terms of specificproducts

    Schedule must be followed for areasonable length of time

    The MPS is quite often fixed or frozen inthe near term part of the plan

    The MPS is a rolling schedule

    The MPS is a statement of what is to beproduced, not a forecast of demand

  • © 2006 Prentice Hall, Inc. 10 – 67

    The Planning Process

    Figure 14.1

    Changeproduction

    plan?Master productionschedule

    ManagementReturn oninvestmentCapital

    EngineeringDesigncompletion

    Aggregateproduction

    plan

    ProcurementSupplierperformance

    Human resourcesManpowerplanning

    ProductionCapacityInventory

    MarketingCustomerdemand

    FinanceCash flow

  • © 2006 Prentice Hall, Inc. 10 – 68

    The Planning Process

    Figure 14.1

    Is capacityplan being

    met?

    Is executionmeeting the

    plan?

    Changemaster

    productionschedule?

    Changecapacity?

    Changerequirements?

    No

    Executematerial plans

    Execute capacityplans

    Yes

    Realistic?

    Capacityrequirements plan

    Materialrequirements plan

    Master productionschedule

  • © 2006 Prentice Hall, Inc. 10 – 69

    AggregateProduction Plan

    Months January February

    Aggregate Production Plan 1,500 1,200(Shows the totalquantity of amplifiers)

    Weeks 1 2 3 4 5 6 7 8

    Master Production Schedule(Shows the specific type andquantity of amplifier to beproduced

    240-watt amplifier 100 100 100 100

    150-watt amplifier 500 500 450 450

    75-watt amplifier 300 100

    Figure 14.2

  • © 2006 Prentice Hall, Inc. 10 – 70

    Master Production Schedule(MPS)

    A customer order in a job shop (make-to-order) company

    Modules in a repetitive (assemble-to-order or forecast) company

    An end item in a continuous (stock-to-forecast) company

    Can be expressed in any of thefollowing terms:

  • © 2006 Prentice Hall, Inc. 10 – 71

    Focus for DifferentProcess Strategies

    Stock to Forecast

    (Product Focus)

    Schedule finishedproduct

    Assemble to Orderor Forecast(Repetitive)

    Schedule modules

    Make to Order

    (Process Focus)

    Schedule orders

    Examples: Print shop Motorcycles Steel, Beer, BreadMachine shop Autos, TVs Lightbulbs

    Fine-dining restaurant Fast-food restaurant Paper

    Typical focus of themaster production

    schedule

    Number ofend items

    Number ofinputs

    Figure 14.3

  • © 2006 Prentice Hall, Inc. 10 – 72

    MPS Examples

    Gross Requirements for Crabmeat Quiche

    Gross Requirements for Spinach Quiche

    Day 6 7 8 9 10 11 12 13 14 and so onAmount 50 100 47 60 110 75

    Day 7 8 9 10 11 12 13 14 15 16 and so onAmount 100 200 150 60 75 100

    Table 14.1

    For Nancy’s Specialty Foods

  • © 2006 Prentice Hall, Inc. 10 – 73

    Bills of Material

    List of components, ingredients,and materials needed to makeproduct

    Provides product structure

    Items above given level are calledparents

    Items below given level are calledchildren

  • © 2006 Prentice Hall, Inc. 10 – 74

    BOM Example

    B(2) Std. 12” Speaker kit C(3)Std. 12” Speaker kit w/amp-booster1

    E(2)E(2) F(2)

    Packing box andinstallation kit of wire,

    bolts, and screws

    Std. 12” Speakerbooster assembly

    2

    D(2)

    12” Speaker

    D(2)

    12” Speaker

    G(1)

    Amp-booster

    3

    Product structure for “Awesome” (A)

    A

    Level

    0

  • © 2006 Prentice Hall, Inc. 10 – 75

    BOM Example

    B(2) Std. 12” Speaker kit C(3)Std. 12” Speaker kit w/amp-booster1

    E(2)E(2) F(2)

    Packing box andinstallation kit of wire,

    bolts, and screws

    Std. 12” Speakerbooster assembly

    2

    D(2)

    12” Speaker

    D(2)

    12” Speaker

    G(1)

    Amp-booster

    3

    Product structure for “Awesome” (A)

    A

    Level

    0

    Part B: 2 x number of As = (2)(50) = 100Part C: 3 x number of As = (3)(50) = 150Part D: 2 x number of Bs

    + 2 x number of Fs = (2)(100) + (2)(300) = 800Part E: 2 x number of Bs

    + 2 x number of Cs = (2)(100) + (2)(150) = 500Part F: 2 x number of Cs = (2)(150) = 300Part G: 1 x number of Fs = (1)(300) = 300

  • © 2006 Prentice Hall, Inc. 10 – 76

    Bills of Material

    Modular Bills

    Modules are not final products butcomponents that can be assembledinto multiple end items

    Can significantly simplify planningand scheduling

  • © 2006 Prentice Hall, Inc. 10 – 77

    Bills of Material

    Planning Bills (Pseudo Bills)

    Created to assign an artificial parentto the BOM

    Used to group subassemblies toreduce the number of items plannedand scheduled

    Used to create standard “kits” forproduction

  • © 2006 Prentice Hall, Inc. 10 – 78

    Bills of Material

    Phantom Bills

    Describe subassemblies that existonly temporarily

    Are part of another assembly andnever go into inventory

    Low-Level Coding

    Item is coded at the lowest level atwhich it occurs

    BOMs are processed one level at a time

  • © 2006 Prentice Hall, Inc. 10 – 79

    Accurate Records

    Accurate inventory records areabsolutely required for MRP (orany dependent demand system) tooperate correctly

    Generally MRP systems require99% accuracy

    Outstanding purchase orders mustaccurately reflect quantities andscheduled receipts

  • © 2006 Prentice Hall, Inc. 10 – 80

    Lead Times

    The time required to purchase,produce, or assemble an item

    For production – the sum of theorder, wait, move, setup, store, andrun times

    For purchased items – the timebetween the recognition of a needand the availability of the item forproduction

  • © 2006 Prentice Hall, Inc. 10 – 81

    Time-Phased ProductStructure

    | | | | | | | |

    1 2 3 4 5 6 7 8Time in weeks

    F

    2 weeks

    3 weeks

    1 week

    A

    2 weeks

    1 week

    D

    E

    2 weeks

    D

    G

    1 week

    1 week

    2 weeks toproduce

    B

    C

    E

    Start production of DMust have D and Ecompleted here so

    production canbegin on B

    Figure 14.4

  • © 2006 Prentice Hall, Inc. 10 – 82

    MRP Structure

    Figure 14.5

    Output Reports

    MRP byperiod report

    MRP bydate report

    Planned orderreport

    Purchase advice

    Exception reports

    Order early or lateor not needed

    Order quantity toosmall or too large

    Data Files

    Purchasing data

    BOM

    Lead times

    (Item master file)

    Inventory data

    Masterproduction schedule

    Materialrequirement

    planningprograms

    (computer andsoftware)

  • © 2006 Prentice Hall, Inc. 10 – 83

    Safety Stock

    BOMs, inventory records, purchaseand production quantities may notbe perfect

    Consideration of safety stock maybe prudent

    Should be minimized and ultimatelyeliminated

    Typically built into projected on-hand inventory

  • © 2006 Prentice Hall, Inc. 10 – 84

    MRP Management

    MRP is a dynamic system

    Facilitates replanning when changesoccur

    System nervousness can result fromtoo many changes

    Time fences put limits on replanning

    Pegging links each item to its parentallowing effective analysis of changes

  • © 2006 Prentice Hall, Inc. 10 – 85

    MRP and JIT

    MRP is a planning system thatdoes not do detailed scheduling

    MRP requires fixed lead timeswhich might actually vary withbatch size

    JIT excels at rapidly moving smallbatches of material through thesystem

  • © 2006 Prentice Hall, Inc. 10 – 86

    OperationsManagementOperationsManagementChapter 6 –Managing Quality

    PowerPoint presentation to accompanyHeizer/RenderPrinciples of Operations Management, 7eOperations Management, 9e

  • © 2006 Prentice Hall, Inc. 10 – 87

    Quality and Strategy

    Managing quality supportsdifferentiation, low cost, andresponse strategies

    Quality helps firms increase salesand reduce costs

    Building a quality organization isa demanding task

  • © 2006 Prentice Hall, Inc. 10 – 88

    Two Ways QualityImproves Profitability

    ImprovedQuality

    IncreasedProfits

    Increased productivity

    Lower rework and scrap costs

    Lower warranty costs

    Reduced Costs via

    Improved response

    Flexible pricing

    Improved reputation

    Sales Gains via

    Figure 6.1

  • © 2006 Prentice Hall, Inc. 10 – 89

    The Flow of Activities

    Organizational PracticesLeadership, Mission statement, Effective operatingprocedures, Staff support, TrainingYields: What is important and what is to be

    accomplished

    Quality PrinciplesCustomer focus, Continuous improvement, Benchmarking,Just-in-time, Tools of TQMYields: How to do what is important and to be

    accomplished

    Employee FulfillmentEmpowerment, Organizational commitmentYields: Employee attitudes that can accomplish

    what is important

    Customer SatisfactionWinning orders, Repeat customersYields: An effective organization with

    a competitive advantageFigure 6.2

  • © 2006 Prentice Hall, Inc. 10 – 90

    Defining Quality

    The totality of features andcharacteristics of a product or

    service that bears on its ability tosatisfy stated or implied needs

    American Society for Quality

  • © 2006 Prentice Hall, Inc. 10 – 91

    Different Views

    User-based – better performance,more features

    Manufacturing-based –conformance to standards,making it right the first time

    Product-based – specific andmeasurable attributes of theproduct

  • © 2006 Prentice Hall, Inc. 10 – 92

    Implications of Quality

    1. Company reputation

    Perception of new products

    Employment practices

    Supplier relations

    2. Product liability

    Reduce risk

    3. Global implications

    Improved ability to compete

  • © 2006 Prentice Hall, Inc. 10 – 93

    Key Dimensions of Quality

    Performance

    Features

    Reliability

    Conformance

    Durability

    Serviceability

    Aesthetics

    Perceived quality

    Value

  • © 2006 Prentice Hall, Inc. 10 – 94

    Malcom Baldrige NationalQuality Award

    Established in 1988 by the U.S.government

    Designed to promote TQM practices

    Recent winners

    Premier Inc., MESA Products, SunnyFresh Foods, Park Place Lexus, NorthMississippi Medical Center, The BamaCompanies, Richland College, TexasNameplate Company, Inc.

  • © 2006 Prentice Hall, Inc. 10 – 95

    Baldrige Criteria

    Applicants are evaluated on:

    Categories Points

    Leadership 120

    Strategic Planning 85

    Customer & Market Focus 85

    Measurement, Analysis, andKnowledge Management 90

    Workforce Focus 85

    Process Management 85

    Results 450

  • © 2006 Prentice Hall, Inc. 10 – 96

    Takumi

    A Japanese characterthat symbolizes abroader dimensionthan quality, a deeperprocess thaneducation, and a moreperfect method thanpersistence

  • © 2006 Prentice Hall, Inc. 10 – 97

    Costs of Quality

    Prevention costs - reducing thepotential for defects

    Appraisal costs - evaluatingproducts, parts, and services

    Internal failure - producing defectiveparts or service before delivery

    External costs - defects discoveredafter delivery

  • © 2006 Prentice Hall, Inc. 10 – 98

    External Failure

    Internal Failure

    Prevention

    Costs of Quality

    Appraisal

    TotalCost

    Quality Improvement

    Total Cost

  • © 2006 Prentice Hall, Inc. 10 – 99

    Leaders in Quality

    W. Edwards Deming 14 Points forManagement

    Joseph M. Juran Top managementcommitment,fitness for use

    Armand Feigenbaum Total QualityControl

    Philip B. Crosby Quality is Free,zero defects

  • © 2006 Prentice Hall, Inc. 10 – 100

    International QualityStandards

    ISO 9000 series (Europe/EC)

    Common quality standards for productssold in Europe (even if made in U.S.)

    2000 update places greater emphasis onleadership and customer satisfaction

    ISO 14000 series (Europe/EC)

  • © 2006 Prentice Hall, Inc. 10 – 101

    ISO 14000Environmental Standard

    Core Elements:

    Environmental management

    Auditing

    Performance evaluation

    Labeling

    Life cycle assessment

  • © 2006 Prentice Hall, Inc. 10 – 102

    TQM

    Encompasses entire organization,from supplier to customer

    Stresses a commitment bymanagement to have a continuing,

    companywide drive towardexcellence in all aspects of productsand services that are important to the

    customer

  • © 2006 Prentice Hall, Inc. 10 – 103

    Seven Concepts of TQM

    Continuous improvement

    Six Sigma

    Employee empowerment

    Benchmarking

    Just-in-time (JIT)

    Taguchi concepts

    Knowledge of TQM tools

  • © 2006 Prentice Hall, Inc. 10 – 104

    Continuous Improvement

    Represents continualimprovement of all processes

    Involves all operations and workcenters including suppliers andcustomers

    People, Equipment, Materials,Procedures

  • © 2006 Prentice Hall, Inc. 10 – 105

    Six Sigma

    Two meanings

    Statistical definition of a process thatis 99.9997% capable, 3.4 defects permillion opportunities (DPMO)

    A program designed to reducedefects, lower costs, and improvecustomer satisfaction

  • © 2006 Prentice Hall, Inc. 10 – 106

    Employee Empowerment

    Getting employees involved in productand process improvements

    85% of quality problems are dueto process and material

    Techniques

    Build communication networksthat include employees

    Develop open, supportive supervisors

    Move responsibility to employees

    Build a high-morale organization

    Create formal team structures

  • © 2006 Prentice Hall, Inc. 10 – 107

    Benchmarking

    Selecting best practices to use as astandard for performance

    Determine what tobenchmark

    Form a benchmark team

    Identify benchmarking partners

    Collect and analyze benchmarkinginformation

    Take action to match or exceed thebenchmark

  • © 2006 Prentice Hall, Inc. 10 – 108

    Just-in-Time (JIT)

    Relationship to quality:

    JIT cuts the cost of quality

    JIT improves quality

    Better quality means lessinventory and better, easier-to-employ JIT system

  • © 2006 Prentice Hall, Inc. 10 – 109

    Just-In-Time (JIT) Example

    ScrapUnreliableVendors

    CapacityImbalances

    Work in processinventory level

    (hides problems)

  • © 2006 Prentice Hall, Inc. 10 – 110

    Just-In-Time (JIT) Example

    Reducing inventory revealsproblems so they can be solved

    ScrapUnreliableVendors

    CapacityImbalances

  • © 2006 Prentice Hall, Inc. 10 – 111

    Taguchi Concepts

    Engineering and experimentaldesign methods to improve productand process design

    Identify key component and processvariables affecting product variation

    Taguchi Concepts

    Quality robustness

    Quality loss function

    Target-oriented quality

  • © 2006 Prentice Hall, Inc. 10 – 112

    Quality Loss Function

    Shows that costs increase as theproduct moves away from whatthe customer wants

    Costs include customerdissatisfaction, warrantyand service, internalscrap and repair, and costs tosociety

    Traditional conformancespecifications are too simplistic

  • © 2006 Prentice Hall, Inc. 10 – 113

    Tools of TQM

    Tools for Generating IdeasCheck sheets

    Scatter diagrams

    Cause-and-effect diagrams

    Tools to Organize the DataPareto charts

    Flowcharts

    Tools for Identifying ProblemsHistogram

    Statistical process control chart

  • © 2006 Prentice Hall, Inc. 10 – 114

    /

    /

    / / /// /

    // ///

    // ////

    ///

    //

    /

    Hour

    Defect 1 2 3 4 5 6 7 8

    A

    B

    C

    /

    /

    //

    /

    Seven Tools of TQM

    (a) Check Sheet: An organized method ofrecording data

    Figure 6.6

  • © 2006 Prentice Hall, Inc. 10 – 115

    Seven Tools of TQM

    (b) Scatter Diagram: A graph of the valueof one variable vs. another variable

    Absenteeism

    Pro

    du

    cti

    vit

    y

    Figure 6.6

  • © 2006 Prentice Hall, Inc. 10 – 116

    Seven Tools of TQM

    (c) Cause-and-Effect Diagram: A tool thatidentifies process elements (causes) thatmight effect an outcome

    Figure 6.6

    Cause

    Materials Methods

    Manpower Machinery

    Effect

  • © 2006 Prentice Hall, Inc. 10 – 117

    Seven Tools of TQM

    (d) Pareto Chart: A graph to identify and plotproblems or defects in descending order offrequency

    Figure 6.6

    Fre

    qu

    en

    cy

    Pe

    rce

    nt

    A B C D E

  • © 2006 Prentice Hall, Inc. 10 – 118

    Seven Tools of TQM

    (e) Flowchart (Process Diagram): A chart thatdescribes the steps in a process

    Figure 6.6

  • © 2006 Prentice Hall, Inc. 10 – 119

    Seven Tools of TQM

    (f) Histogram: A distribution showing thefrequency of occurrences of a variable

    Figure 6.6

    Distribution

    Repair time (minutes)

    Fre

    qu

    en

    cy

  • © 2006 Prentice Hall, Inc. 10 – 120

    Seven Tools of TQM

    (g) Statistical Process Control Chart: A chart withtime on the horizontal axis to plot values of astatistic

    Figure 6.6

    Upper control limit

    Target value

    Lower control limit

    Time

  • © 2006 Prentice Hall, Inc. 10 – 121

    Cause-and-Effect Diagrams

    Material(ball)

    Method(shooting process)

    Machine(hoop &

    backboard)

    Manpower(shooter)

    Missedfree-throws

    Figure 6.7

    Rim alignment

    Rim size

    Backboardstability

    Rim height

    Follow-through

    Hand position

    Aiming point

    Bend knees

    Balance

    Size of ball

    Lopsidedness

    Grain/Feel(grip)

    Air pressure

    Training

    Conditioning Motivation

    Concentration

    Consistency

  • © 2006 Prentice Hall, Inc. 10 – 122

    Pareto Charts

    Number ofoccurrences

    Room svc Check-in Pool hours Minibar Misc.72% 16% 5% 4% 3%

    12

    4 3 2

    54

    – 100– 93– 88

    – 72

    70 –

    60 –

    50 –

    40 –

    30 –

    20 –

    10 –

    0 –

    Fre

    qu

    en

    cy

    (nu

    mb

    er)

    Causes and percent of the total

    Cu

    mu

    lati

    ve

    pe

    rce

    nt

    Data for October

  • © 2006 Prentice Hall, Inc. 10 – 123

    Flow Charts

    MRI Flowchart

    1. Physician schedules MRI2. Patient taken to MRI3. Patient signs in4. Patient is prepped5. Technician carries out MRI6. Technician inspects film

    7. If unsatisfactory, repeat8. Patient taken back to room9. MRI read by radiologist10. MRI report transferred to

    physician11. Patient and physician discuss

    11

    10

    20%

    9

    880%

    1 2 3 4 5 6 7

  • © 2006 Prentice Hall, Inc. 10 – 124

    Statistical Process Control(SPC)

    Uses statistics and control charts totell when to take corrective action

    Drives process improvement

    Four key steps

    Measure the process

    When a change is indicated, find theassignable cause

    Eliminate or incorporate the cause

    Restart the revised process

  • © 2006 Prentice Hall, Inc. 10 – 125

    An SPC Chart

    Upper control limit

    Coach’s target value

    Lower control limit

    Game number

    | | | | | | | | |

    1 2 3 4 5 6 7 8 9

    20%

    10%

    0%

    Plots the percent of free throws missed

    Figure 6.8

  • © 2006 Prentice Hall, Inc. 10 – 126

    Variability is inherent in every process

    Natural or common causes

    Special or assignable causes

    Provides a statistical signal whenassignable causes are present

    Detect and eliminate assignablecauses of variation

    Statistical Process Control(SPC)

  • © 2006 Prentice Hall, Inc. 10 – 127

    Natural Variations

    Also called common causes

    Affect virtually all production processes

    Expected amount of variation

    Output measures follow a probabilitydistribution

    For any distribution there is a measureof central tendency and dispersion

    If the distribution of outputs falls withinacceptable limits, the process is said tobe “in control”

  • © 2006 Prentice Hall, Inc. 10 – 128

    Assignable Variations

    Also called special causes of variation

    Generally this is some change in the process

    Variations that can be traced to a specificreason

    The objective is to discover whenassignable causes are present

    Eliminate the bad causes

    Incorporate the good causes

  • © 2006 Prentice Hall, Inc. 10 – 129

    Control Charts

    Constructed from historical data, thepurpose of control charts is to helpdistinguish between natural variationsand variations due to assignablecauses

  • © 2006 Prentice Hall, Inc. 10 – 130

    Types of Data

    Characteristics thatcan take any realvalue

    May be in whole orin fractionalnumbers

    Continuous randomvariables

    Variables Attributes

    Defect-relatedcharacteristics

    Classify productsas either good orbad or countdefects

    Categorical ordiscrete randomvariables

  • © 2006 Prentice Hall, Inc. 10 – 131

    Setting Chart Limits

    For x-Charts when we know s

    Upper control limit (UCL) = x + zsx

    Lower control limit (LCL) = x - zsx

    where x = mean of the sample means or a targetvalue set for the process

    z = number of normal standard deviations

    sx = standard deviation of the sample means= s/ n

    s = population standard deviation

    n = sample size

  • © 2006 Prentice Hall, Inc. 10 – 132

    Setting Control Limits

    Hour 1

    Sample Weight ofNumber Oat Flakes

    1 17

    2 13

    3 16

    4 18

    5 17

    6 16

    7 15

    8 17

    9 16

    Mean 16.1

    s = 1

    Hour Mean Hour Mean

    1 16.1 7 15.2

    2 16.8 8 16.4

    3 15.5 9 16.3

    4 16.5 10 14.8

    5 16.5 11 14.2

    6 16.4 12 17.3n = 9

    LCLx = x - zsx = 16 - 3(1/3) = 15 ozs

    For 99.73% control limits, z = 3

    UCLx = x + zsx = 16 + 3(1/3) = 17 ozs

  • © 2006 Prentice Hall, Inc. 10 – 133

    17 = UCL

    15 = LCL

    16 = Mean

    Setting Control Limits

    Control Chartfor sample of9 boxes

    Sample number

    | | | | | | | | | | | |1 2 3 4 5 6 7 8 9 10 11 12

    Variation dueto assignable

    causes

    Variation dueto assignable

    causes

    Variation due tonatural causes

    Out ofcontrol

    Out ofcontrol

  • © 2006 Prentice Hall, Inc. 10 – 134

    Setting Chart Limits

    For x-Charts when we don’t know s

    Lower control limit (LCL) = x - A2R

    Upper control limit (UCL) = x + A2R

    where R = average range of the samples

    A2 = control chart factor found in Table S6.1

    x = mean of the sample means

  • © 2006 Prentice Hall, Inc. 10 – 135

    Control Chart Factors

    Table S6.1

    Sample Size Mean Factor Upper Range Lower Rangen A2 D4 D3

    2 1.880 3.268 0

    3 1.023 2.574 0

    4 .729 2.282 0

    5 .577 2.115 0

    6 .483 2.004 0

    7 .419 1.924 0.076

    8 .373 1.864 0.136

    9 .337 1.816 0.184

    10 .308 1.777 0.223

    12 .266 1.716 0.284

  • © 2006 Prentice Hall, Inc. 10 – 136

    Setting Control Limits

    Process average x = 16.01 ouncesAverage range R = .25Sample size n = 5

  • © 2006 Prentice Hall, Inc. 10 – 137

    Setting Control Limits

    UCLx = x + A2R= 16.01 + (.577)(.25)= 16.01 + .144= 16.154 ounces

    Process average x = 16.01 ouncesAverage range R = .25Sample size n = 5

    FromTable S6.1

  • © 2006 Prentice Hall, Inc. 10 – 138

    Setting Control Limits

    UCLx = x + A2R= 16.01 + (.577)(.25)= 16.01 + .144= 16.154 ounces

    LCLx = x - A2R= 16.01 - .144= 15.866 ounces

    Process average x = 16.01 ouncesAverage range R = .25Sample size n = 5

    UCL = 16.154

    Mean = 16.01

    LCL = 15.866

  • © 2006 Prentice Hall, Inc. 10 – 139

    R – Chart

    Type of variables control chart

    Shows sample ranges over time

    Difference between smallest andlargest values in sample

    Monitors process variability

    Independent from process mean

  • © 2006 Prentice Hall, Inc. 10 – 140

    Setting Chart Limits

    For R-Charts

    Lower control limit (LCLR) = D3R

    Upper control limit (UCLR) = D4R

    where

    R = average range of the samples

    D3 and D4 = control chart factors from Table S6.1

  • © 2006 Prentice Hall, Inc. 10 – 141

    Setting Control Limits

    UCLR = D4R= (2.115)(5.3)= 11.2 pounds

    LCLR = D3R= (0)(5.3)= 0 pounds

    Average range R = 5.3 poundsSample size n = 5From Table S6.1 D4 = 2.115, D3 = 0

    UCL = 11.2

    Mean = 5.3

    LCL = 0

  • © 2006 Prentice Hall, Inc. 10 – 142

    Control Charts for Attributes

    For variables that are categorical

    Good/bad, yes/no,acceptable/unacceptable

    Measurement is typically countingdefectives

    Charts may measure

    Percent defective (p-chart)

    Number of defects (c-chart)

  • © 2006 Prentice Hall, Inc. 10 – 143

    Control Limits for p-Charts

    Population will be a binomial distribution,but applying the Central Limit Theorem

    allows us to assume a normal distributionfor the sample statistics

    UCLp = p + zsp^

    LCLp = p - zsp^

    where p = mean fraction defective in the sample

    z = number of standard deviations

    sp = standard deviation of the sampling distribution

    n = sample size

    ^

    p(1 - p)n

    sp =^

  • © 2006 Prentice Hall, Inc. 10 – 144

    p-Chart for Data EntrySample Number Fraction Sample Number FractionNumber of Errors Defective Number of Errors Defective

    1 6 .06 11 6 .062 5 .05 12 1 .013 0 .00 13 8 .084 1 .01 14 7 .075 4 .04 15 5 .056 2 .02 16 4 .047 5 .05 17 11 .118 3 .03 18 3 .039 3 .03 19 0 .00

    10 2 .02 20 4 .04

    Total = 80

    (.04)(1 - .04)

    100sp = = .02^

    p = = .0480

    (100)(20)

  • © 2006 Prentice Hall, Inc. 10 – 145

    .11 –

    .10 –

    .09 –

    .08 –

    .07 –

    .06 –

    .05 –

    .04 –

    .03 –

    .02 –

    .01 –

    .00 –

    Sample number

    Fra

    cti

    on

    defe

    cti

    ve

    | | | | | | | | | |

    2 4 6 8 10 12 14 16 18 20

    p-Chart for Data Entry

    UCLp = p + zsp = .04 + 3(.02) = .10^

    LCLp = p - zsp = .04 - 3(.02) = 0^

    UCLp = 0.10

    LCLp = 0.00

    p = 0.04

  • © 2006 Prentice Hall, Inc. 10 – 146

    .11 –

    .10 –

    .09 –

    .08 –

    .07 –

    .06 –

    .05 –

    .04 –

    .03 –

    .02 –

    .01 –

    .00 –

    Sample number

    Fra

    cti

    on

    defe

    cti

    ve

    | | | | | | | | | |

    2 4 6 8 10 12 14 16 18 20

    UCLp = p + zsp = .04 + 3(.02) = .10^

    LCLp = p - zsp = .04 - 3(.02) = 0^

    UCLp = 0.10

    LCLp = 0.00

    p = 0.04

    p-Chart for Data Entry

    Possibleassignable

    causes present

  • © 2006 Prentice Hall, Inc. 10 – 147

    Control Limits for c-Charts

    Population will be a Poisson distribution,but applying the Central Limit Theorem

    allows us to assume a normal distributionfor the sample statistics

    where c = mean number defective in the sample

    UCLc = c + 3 c LCLc = c - 3 c

  • © 2006 Prentice Hall, Inc. 10 – 148

    c-Chart for Cab Company

    c = 54 complaints/9 days = 6 complaints/day

    |1

    |2

    |3

    |4

    |5

    |6

    |7

    |8

    |9

    Day

    Nu

    mb

    er

    defe

    cti

    ve14 –

    12 –

    10 –

    8 –

    6 –

    4 –

    2 –

    0 –

    UCLc = c + 3 c= 6 + 3 6= 13.35

    LCLc = c - 3 c= 3 - 3 6= 0

    UCLc = 13.35

    LCLc = 0

    c = 6

  • © 2006 Prentice Hall, Inc. 10 – 149

    Which Control Chart to Use

    Using an x-chart and R-chart:

    Observations are variables

    Collect 20 - 25 samples of n = 4, or n =5, or more, each from a stable processand compute the mean for the x-chartand range for the R-chart

    Track samples of n observations each

    Variables Data

  • © 2006 Prentice Hall, Inc. 10 – 150

    Which Control Chart to Use

    Using the p-chart:

    Observations are attributes that canbe categorized in two states

    We deal with fraction, proportion, orpercent defectives

    Have several samples, each withmany observations

    Attribute Data

  • © 2006 Prentice Hall, Inc. 10 – 151

    Which Control Chart to Use

    Using a c-Chart:

    Observations are attributes whosedefects per unit of output can becounted

    The number counted is often a smallpart of the possible occurrences

    Defects such as number of blemisheson a desk, number of typos in a pageof text, flaws in a bolt of cloth

    Attribute Data

  • © 2006 Prentice Hall, Inc. 10 – 152

    Strategic Importance ofMaintenance and Reliability

    Failure has far reaching effects on a firm’s

    Operation

    Reputation

    Profitability

    Dissatisfied customers

    Idle employees

    Profits becoming losses

    Reduced value of investment in plant andequipment

  • © 2006 Prentice Hall, Inc. 10 – 153

    Maintenance and Reliability

    The objective of maintenance andreliability is to maintain thecapability of the system whilecontrolling costs Maintenance is all activities involved in

    keeping a system’s equipment in workingorder

    Reliability is the probability that a machinewill function properly for a specified time

  • © 2006 Prentice Hall, Inc. 10 – 154

    Important Tactics

    Reliability1. Improving individual components

    2. Providing redundancy

    Maintenance1. Implementing or improving preventive

    maintenance

    2. Increasing repair capability or speed

  • © 2006 Prentice Hall, Inc. 10 – 155

    Strategy and Results

    Employee Involvement

    Information sharingSkill trainingReward systemPower sharing

    Maintenance and ReliabilityProcedures

    Clean and lubricateMonitor and adjustMinor repairComputerize records

    Results

    Reduced inventoryImproved qualityImproved capacityReputation for qualityContinuous improvementReduced variability

    Figure 17.1

  • © 2006 Prentice Hall, Inc. 10 – 156

    Maintenance

    Two types of maintenance Preventive maintenance – routine

    inspection and servicing to keepfacilities in good repair

    Breakdown maintenance – emergencyor priority repairs on failed equipment

  • © 2006 Prentice Hall, Inc. 10 – 157

    Implementing PreventiveMaintenance

    Need to know when a system requires serviceor is likely to fail

    High initial failure rates are known as infantmortality

    Once a product settles in, MTBF generallyfollows a normal distribution

    Good reporting and record keeping can aid thedecision on when preventive maintenanceshould be performed

  • © 2006 Prentice Hall, Inc. 10 – 158

    Titik Berat PemeliharaanPreventif

    • Feel

    • Inspection

    • Clear

    • Adjusment

    • Lubrication

  • © 2006 Prentice Hall, Inc. 10 – 159

    Maintenance Costs

    The traditional view attempted tobalance preventive and breakdownmaintenance costs

    Typically this approach failed toconsider the true total cost ofbreakdowns Inventory

    Employee morale

    Schedule unreliability

  • © 2006 Prentice Hall, Inc. 10 – 160

    Maintenance Costs

    Figure 17.4 (a)

    Totalcosts

    Breakdownmaintenancecosts

    Co

    sts

    Maintenance commitment

    Traditional View

    Preventivemaintenancecosts

    Optimal point (lowestcost maintenance policy)

  • © 2006 Prentice Hall, Inc. 10 – 161

    Maintenance Costs

    Figure 17.4 (b)

    Co

    sts

    Maintenance commitment

    Full Cost View

    Optimal point (lowestcost maintenance policy)

    Totalcosts

    Full cost ofbreakdowns

    Preventivemaintenancecosts

  • © 2006 Prentice Hall, Inc. 10 – 162

    Increasing RepairCapabilities

    1. Well-trained personnel

    2. Adequate resources

    3. Ability to establish repair plan and priorities

    4. Ability and authority to do material planning

    5. Ability to identify the cause of breakdowns

    6. Ability to design ways to extend MTBF

  • © 2006 Prentice Hall, Inc. 10 – 163

    How Maintenance isPerformed

    Figure 17.5

    OperatorMaintenancedepartment

    Manufacturer’sfield service

    Depot service(return equipment)

    Preventivemaintenance costs less andis faster the more we move to the left

    Competence is higher as wemove to the right