operations improvement
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Operations Improvement. BUS255. Goals. By the end of this chapter, you should know: Importance of Operations improvement Improvement Techniques Broad approaches to improvement Elements of Improvement. The Red Queen effect. - PowerPoint PPT PresentationTRANSCRIPT
Operations Improvement
BUS255
Goals
By the end of this chapter, you should know:• Importance of Operations improvement• Improvement Techniques• Broad approaches to improvement• Elements of Improvement
In ‘Alice’s adventures through the looking glass’, by Lewis Carroll, Alice encounters living chess pieces and, in particular, the ‘Red Queen’.
‘Well, in our country’, said Alice, still panting a little, ‘you’d generally get to somewhere else – if you ran very fast for a long time, as we’ve been doing’. ‘A slow sort of country!’ said the Queen. ‘Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!
The Red Queen effect
Think about examples!
• Automotive sector• Telecommunications sector (cell phones)
Implications• Operations Improvement is necessary to
retain competitive position• Greater operations improvements
(comparatively) are necessary to improve competitive position
Improvement Techniques
Scatter DiagramScatter Diagram: A graph of the value of one variable vs. another variable
Absenteeism
Pro
duct
ivity
Scatter Diagram
• Help us understand the relationship between variables (tool to generate ideas)
• Remember, correlation doesn’t mean causation
• X and Y have positive relationship doesn’t necessarily mean X causes Y.
• Refer to in-class problem # 1
FlowchartFlowchart (Process Diagram): A chart that describes the steps in a process. It is also called as process map.
Flow ChartMRI Flowchart1. 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
Flow Chart
• Flowcharts are vey useful in visually describing processes (tool to organize data)
• Refer to in-class problem # 2
• Let’s do it in Visio
Cause and Effect DiagramCause-and-Effect Diagram: A tool that identifies process
elements (causes) that might effect an outcome. Also called Fishbone diagram or Ishikawa diagram.
CauseMaterials Methods
Manpower Machinery
Effect
Cause-and-Effect DiagramMaterial
(ball)Method
(shooting process)
Machine(hoop &
backboard)Manpower(shooter)
Missed free-throws
Rim alignment
Rim size
Backboard stability
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
Cause-and-Effect Diagram
• Very helpful for performing root cause analysis. Can also identify areas where further data is needed (tool to generate ideas)
• Most used categories: Machinery, Manpower, Materials, Methods, and Money
• Other categories can also be used
• Refer to in-class problem # 3
Pareto ChartA graph to identify and plot problems or defects in descending order of frequency
Freq
uenc
y
Per
cent
A B C D E
Pareto Charts
Number of occurrences
Room svc Check-in Pool hours Minibar Misc.72% 16% 5% 4% 3%
124 3 2
54
– 100
– 93– 88
– 72
70 –
60 –
50 –
40 –
30 –
20 –
10 –
0 –
Freq
uenc
y (n
umbe
r)
Causes and percent of the total
Cum
ulat
ive
perc
ent
Data for October
Pareto Chart
• Pareto analysis is based on “relatively few causes” explaining the “majority of effects”
• Helps differentiate between “vital few” issues and “trivial many”
• A good tool to organize data• Let’s work on problem # 4 of in-class exercise
Four broad approaches to improvement
Total Quality Management (TQM)
• Puts quality and improvement at the heart of everything that is done by an operation.– Meet the needs and expectations of customers– Improvement covers all aspects of a company– Improvement includes every person in a company– Getting things “right first time”– Develop the systems and procedures
Lean or Just-in-time (JIT) approach
• An approach to meet demand instantaneously, with perfect quality, and no waste .– Customer-centricity– Internal customer-supplier relationships– Perfection is the goal– Synchronized flow– Reduce variation– Include all people– Waste elimination
Business Process Reengineering (BPR)
• A radical approach to improvement that attempts to redesign operations along customer-focused processes rather than on the traditional functional basis.
BPR advocates reorganizing processes to reflect the natural processes that fulfill customer needs
Function 1
Cus
tom
er n
eeds
fulfi
lled
Functionally-based processes
Function 2 Function 3 Function 4
Bus
ines
s pr
oces
ses
End-to-end process 1
End-to-end process 2
End-to-end process 3Cus
tom
er n
eeds
Business Process Reengineering (BPR)
BPR advocates reorganizing processes to reflect the natural processes that fulfill customer needs
Before BPR
BPR advocates reorganizing processes to reflect the natural processes that fulfill customer needs
After BPR
Six Sigma Two meanings
Statistical definition of a process that is 99.9997% capable, 3.4 defects per million opportunities (DPMO)
A program designed to reduce defects, lower costs, save time, and improve customer satisfaction
A comprehensive system for achieving and sustaining business success
Six Sigma► Two meanings
► Statistical definition of a process that is 99.9997% capable, 3.4 defects per million opportunities (DPMO)
► A program designed to reduce defects, lower costs, save time, and improve customer satisfaction
► A comprehensive system for achieving and sustaining business success
Mean
Lower limits Upper limits
3.4 defects/million
±6
2,700 defects/million
±3
Six Sigma Program► Originally developed by Motorola, adopted
and enhanced by Honeywell and GE► Highly structured approach to process
improvement► A strategy► A discipline – DMAIC
► Let’s work on a problem 6
Six Sigma1. Defines the project’s purpose, scope, and outputs,
identifies the required process information keeping in mind the customer’s definition of quality
2. Measures the process and collects data3. Analyzes the data ensuring
repeatability and reproducibility4. Improves by modifying or
redesigning existing processes and procedures
5. Controls the new process to make sure performance levels are maintained
DMAIC Approach
The ‘elements’ that are the building blocks of improvement include:
•Radical or breakthrough improvement•Continuous improvement•Improvement cycles•A process perspective•End-to-end processes•Radical change•Evidence-based problem-solving•Customer-centricity•Systems and procedures•Reduce process variation•Synchronized flow•Emphasize education/training•Perfection is the goal•Waste identification•Include everybody•Develop internal customer–supplier relationships.
You are responsible for this slide. Please read in textbook from p. 84-90.
What are the key elements of operations improvement?
References
• Slack, N., Chambers, S., & Johnston, R. (2010). Operations management. 6th ed. Pearson Education.
• Heizer, J. H., & Render, B. (2014). Operations management (11th ed.). Pearson Education.