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TRANSCRIPT
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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
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© 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
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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
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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
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Job Expansion
Adding more variety to jobs
Intended to reduce boredomassociated with labor specialization
Job enlargement
Job rotation
Job enrichment
Employee empowerment
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Psychological Componentsof Job Design
Human resource strategy requiresconsideration of the psychological
components of job design
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Job Design Continuum
Specialization
Enlargement
Self-directedteams
Empowerment
Enrichment
Figure 10.3
Job expansion
Increasingreliance onemployee’scontributionandincreasingresponsibilityaccepted byemployee
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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
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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
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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
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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
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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
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Ergonomics and WorkMethods
Ergonomics is the study of theinterface between man andmachine
Often called human factors
Operator input to machines
Feedback to operators
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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
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Job Design and Keyboards
Figure 10.4
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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
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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
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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
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Flow Diagram
Storage bins
Machine 1
Mach. 2
Mach. 3 Mach. 4
From
pressmach. Paint
shop
Welding
Figure 10.5 (a)
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Storagebins
Machine 1
Machine 2
Machine 3
Machine 4
Frompressmach.
Paintshop
Welding
Flow Diagram
Figure 10.5 (b)
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ProcessChart
Figure 10.5 (c)
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Activity Chart
Figure 10.6
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Operation Chart
Figure 10.7
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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
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The Visual Workplace
Present the big picture
Performance
Housekeeping
Visual signals can take many formsand serve many functions
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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
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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
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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
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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
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Labor Standards
May be set in four ways:
1. Historical experience
2. Time studies
3. Predetermined time standards
4. Work sampling
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Work Sampling TimeStudies
Salespeople
Figure S10.3
Telephonesales12%
Telephonewithin firm
13%
Lunch andpersonal
10%
Meetingsand other
8%
Paperwork17%
Travel20%
Sales inperson
20%
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Work Sampling TimeStudies
Figure S10.3
Productivework67%
Startup/pep talk3%
Breaks and lunch10%
Dead timebetween tasks
13%
Cleanup3%
Unscheduled tasksand downtime
4%
Assembly-LineEmployees
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Diskusi
Penetapan UMK
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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).”
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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.”
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© 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.”
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Instruksi Presiden (Inpres) No. 9/2013 yangmengatur penetapan UMK berdasarkan
produktifitas pekerja/buruh
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Equal pay for equal work,equal pay for equal
performance
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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
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•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
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•1-13
•Benefits of Supply Chain Management
• Lower inventories
• Higher productivity• Shorter lead times
• Higher profits
• Greater customer loyalty
•1-13
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A Supply Chain
Figure 11.1
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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
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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
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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
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Supply-Chain Strategies
Negotiating with many suppliers
Long-term partnering with fewsuppliers
Vertical integration
Keiretsu
Virtual companies that usesuppliers on an as needed basis
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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
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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
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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
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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
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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
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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
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• Have a common goal
• Mutual benefit
• Mutual trust
• Transparent
• Long term relationship
• Continuous improvement in qualityand cost
The Spirit of Partnership
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OperationsManagementOperationsManagementChapter 14 –Material RequirementsPlanning (MRP) and ERP
PowerPoint presentation to accompanyHeizer/RenderPrinciples of Operations Management, 7eOperations Management, 9e
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Benefits of MRP
1. Better response to customerorders
2. Faster response to marketchanges
3. Improved utilization of facilitiesand labor
4. Reduced inventory levels
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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
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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
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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
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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
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The Planning Process
Figure 14.1
Changeproduction
plan?Master productionschedule
ManagementReturn oninvestmentCapital
EngineeringDesigncompletion
Aggregateproduction
plan
ProcurementSupplierperformance
Human resourcesManpowerplanning
ProductionCapacityInventory
MarketingCustomerdemand
FinanceCash flow
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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
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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
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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:
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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
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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
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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
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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
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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
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Bills of Material
Modular Bills
Modules are not final products butcomponents that can be assembledinto multiple end items
Can significantly simplify planningand scheduling
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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
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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
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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
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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
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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
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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)
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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
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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
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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
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OperationsManagementOperationsManagementChapter 6 –Managing Quality
PowerPoint presentation to accompanyHeizer/RenderPrinciples of Operations Management, 7eOperations Management, 9e
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Quality and Strategy
Managing quality supportsdifferentiation, low cost, andresponse strategies
Quality helps firms increase salesand reduce costs
Building a quality organization isa demanding task
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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
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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
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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
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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
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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
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Key Dimensions of Quality
Performance
Features
Reliability
Conformance
Durability
Serviceability
Aesthetics
Perceived quality
Value
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© 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.
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© 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
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© 2006 Prentice Hall, Inc. 10 – 96
Takumi
A Japanese characterthat symbolizes abroader dimensionthan quality, a deeperprocess thaneducation, and a moreperfect method thanpersistence
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© 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
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© 2006 Prentice Hall, Inc. 10 – 98
External Failure
Internal Failure
Prevention
Costs of Quality
Appraisal
TotalCost
Quality Improvement
Total Cost
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© 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
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© 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)
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© 2006 Prentice Hall, Inc. 10 – 101
ISO 14000Environmental Standard
Core Elements:
Environmental management
Auditing
Performance evaluation
Labeling
Life cycle assessment
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 2006 Prentice Hall, Inc. 10 – 109
Just-In-Time (JIT) Example
ScrapUnreliableVendors
CapacityImbalances
Work in processinventory level
(hides problems)
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© 2006 Prentice Hall, Inc. 10 – 110
Just-In-Time (JIT) Example
Reducing inventory revealsproblems so they can be solved
ScrapUnreliableVendors
CapacityImbalances
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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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
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© 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
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© 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
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© 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)
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© 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”
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 2006 Prentice Hall, Inc. 10 – 136
Setting Control Limits
Process average x = 16.01 ouncesAverage range R = .25Sample size n = 5
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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)
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© 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 =^
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© 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)
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 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
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© 2006 Prentice Hall, Inc. 10 – 158
Titik Berat PemeliharaanPreventif
• Feel
• Inspection
• Clear
• Adjusment
• Lubrication
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© 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
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© 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)
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© 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
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© 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
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© 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