TQM PRESENTATION BY

GROUP 1HRIDAY BORA

VISHNU TEJ

NEELANJAN GHOSH

MOHIT TARWAY

May 15, 2016 1

Value Chain Analysis

The value is the total amount that buyers are willing to

pay for a firm’s products.

The difference between the total value and the total

cost of performing all of the firm’s activities provides

the margin .

The value chain is a tool developed by Dr. Michael

porter

Porter’s definition includes all activities to design, produce,

market, deliver, and support the product/service.

The value chain is concentrating on the activities starting with

raw materials till the conversion into final goods or services.

Two categories:

1. Primary Activities (operations, distribution, sales)

2. Support Activities (R&D, Human Resources)

TYPES OF VALUE CHAIN

Value Chain is categorized into types based on

the type of organizations.

1. Manufacturing based.

2. Service based.

3. Both manufacturing and service based.

What is value chain analysis?

Used to identify sources of competitive advantage

Specifically:

Opportunities to secure cost advantages

Opportunities to create product/service

differentiation

Includes the value-creating activities of all industry

participants

Value Chain Model

Firm Infrastructure

Human Resource Management

Technology Development

Procurement

Inbound

LogisticsOperatio

ns.

Outbound

Logistics

Sales &

Marketing

Service and

Support

PRIMARY ACTIVITIES

SUPPORT

ACTIVITIES

PRIMARY ACTIVITIES

1.INBOUND LOGISTICS

- Concerned with receiving, storing, distributing inputs (E.G. Handling

of raw materials, warehousing, inventory control)

2. OPERATIONS

- Comprise the transformation of the inputs into the final product form

(E.G. Production, assembly, and packaging)

3. OUTBOUND LOGISTICS

-Involve the collecting, storing, and distributing the product to the buyers (E.G. Processing of orders, warehousing of finished goods, and delivery)

4. MARKETING AND SALES

-Identification of customer needs and generation of sales.

(E.G. Advertising, promotion, distribution)

5. SERVICE

-Involves how to maintain the value of the product

After it is purchased.(E.G. Installation, repair,

Maintenance, and training)

SUPPORT ACTIVITIES

1.FIRM INFRASTRUCTURE

The activities such as Organization structure, control system, company culture are categorized under firm infrastructure.

2.HUMAN RESOURCE MANAGEMENT

Involved in recruiting, hiring, training, development and compensation.

3.TECHNOLOGY DEVELOPMENT

These activities are intended to improve the product and the process, can occur in many

parts of the firm.

4.PROCUREMENT

Concerned with the tasks of purchasing inputs such as raw materials, equipment, and even

labor.

USES OF VALUE CHAIN ANALYSIS

The sources of the competitive advantage of a firm can be seen from its discrete activities and how they interact with one one another.

The value chain is a tool for systematically examining the activities of a firm and how they interact with one another and affect each other’s cost and performance.

A firm gains a competitive advantage by performing these activities better or at lower cost than competitors.

Helps you to stay out of the “No Profit Zone”

Presents opportunities for integration

Aligns spending with value processes

VERTICAL LINKAGES

Linkages can also exist outside the firm; for instance there is a linkage between a firm’s chain and the value

chain of its suppliers and channels.

e.g. The activities of the raw materials suppliers affect the activities of the firm. Similarly, the activities of the

distributor also affect the firm.

MUDA

Muda is a Japanese word, which means waste,

where waste is any activity that does not add

value. Reducing or eliminating Muda is, of

course, one of the fundamental objectives of any

quality-oriented person.

7 MUDAS

Taichi ohno of Toyota identified what are called the seven

wastes or seven Mudas

1. Waste from overproduction

2. Waste of time in waiting

3. Transportation waste

4. Processing waste

5. Inventory waste

6. Waste of motion

7. Waste from product defects

1.Waste from overproduction

Which leads to excess inventory, paperwork, handling, storage, space, interest

charges, machinery, defects, people and overhead.

It is often difficult to see this waste as everyone seems busy.

Unnecessary production to show higher machine utilization

Strategies to eliminate :-

Strong production planning and control

Production according to customer schedule

Firm delivery requirement from marketing.

2.Waste of time in waiting

Its occurs when worker or machine is not performing its job.

People may be waiting for parts or instructions.

Mostly they are waiting for one another, which often happens because they have non-aligned objectives.

The talent of employees also wasted.

Tools to identify

Kaizen

Method study

3.Transportation waste

It is highly visible form of waste unnecessary transportation create the need for more storage space, more

equipment and workers.

Poor layouts lead to things being moved multiple times.

If things are not well place, they can be hard to find.

It can aggravate alignment of processes.

Strategies to eliminate

Store material as close to the point of use as possible

Avoid transportation over long distance.

Avoid over production.

4.Waste from product defects

Defects imply rework or reject. Research confirms that 20 to 30% of manufacturing

company’s gross revenues are spent on correcting mistake.

Defects cause rework, confusion and upset a synchronized set of processes.

Loss of customer

Loss of future business

Causes of defects

Incorrect product design

Defective materials

Poorly trained employees

Strategies to eliminate :-

Design reviews

Training to employees

Maintenance of machines and equipment.

5.Waste of motion

A worker while performing a task makes use of a number of motions. Some of these motion-

Are unnecessary and can be eliminated

Can be combined by changing their sequence.

Can be performed efficiently by other members of the body.

Strategies to eliminate

Motion economy principal

Effective supervision

6.Inventory waste

Inventory comprises of finished goods semi-finished products or parts and supplies. Excess inventory is a real waste as it

does not add value but add to the cost by-

Occupying space

Requiring additional equipment and facilities such as storage racks, cupboards etc.

Strategies to eliminate

Dispose off obsolete material to save space and to avoid confusion.

Do not produce items ahead of customer's delivery requirements.

Do not manufacture products in excess of customer's requirements.

7.Processing waste

Processing cost of a product is mainly decided by conversion process, combination of mechanical and chemical operations and supports activities required to produce goods and services.

Additional effort may be required in an inefficient process

Causes of MUDA of processing

Poor allocation of work to men

Failure to identify and use of most effective method

Over production

Tools to eliminate

Method study

Simplification

Kaizen

Muda in office:-

Muda can also be found in support function such as engineering, planning,

marketing, purchase, stores, a/c and hrm etc.

Examples of Muda in office

Waiting the people at meeting

Making unproductive phone calls

Unnecessary copies of documents

Letterheads printed in excess of requirements.

Tools to eliminate

Work Simplification

5-s technique for office

INTRODUCTION

What is a Poka- yoke?

Shigeo shingo defined poka-yoke as POKA- ‘Inadvertent

mistake that anyone can make’ and YOKE- ‘To prevent or

proof’

Poka-yoke is a tool to have “zero defects” and even reduce

or eliminate quality control.

Poka-yoke is a Japanese name for “fool-proofing”.

Poke-yoke represents the intelligence of the operator by

excluding repetitive actions that require a thinking

process.22

MISTAKE PROOFING

Mistake-Proofing a product's design and its manufacturing

process is a key element of design for manufacturability /

assembly (DFM/A)

Mistake proofing is also a key element of improving

product quality and reliability

FACTORS CONTRIBUTING TO MISTAKE PROOFING:

Attention

Perception

Memory

Logical reasoning

May 15, 2016 23

PRINCIPLES OF MISTAKE-PROOFING

There are six mistake-proofing principles or methods.

Elimination seeks to eliminate the possibility of error by redesigning the product or process so that the task or part is no longer necessary.

Replacement substitutes a more reliable process to improve consistency.

Prevention engineers the product or process so that it is impossible to make a mistake at all.

Facilitation employs techniques and combining steps to make work easier to perform.

Detection involves identifying an error before further processing occurs so that the user can quickly correct the problem.

Mitigation seeks to minimize the effects of errors. 24

2-STATUS & 3-FUNCTIONS OF POKA-YOKE

POKA-YOKE HAS 2 STATUS AND 3 FUNCTIONS:

Status:

1.The fault will happen or

2.The fault has happened

Functions:

1.Stop

2.Check or

3.Alarm

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THREE STRATEGIES FOR ZERO DEFECT

Only make the product when required!

Make the product so it can not be used for anything else.

If the product is ready use it immediately.

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POKA-YOKE CLASSIFICATION

Poka-yoke is classified into the following types:

27

Server Poka-Yokes

Task

Treatment Tangibles

Customer Poka-Yokes

Preparation

Encounter

Resolution

PROVIDER(SERVER) ERRORS

Task Errors

• Doing the work incorrectly

• Doing work not requested

• Doing work in the wrong order

• Doing work too slowly

Treatment Errors

• Not acknowledging the customer

• Not listening to the customer

• Not reacting appropriately to the customer

Tangible Errors

• Failure to clean facilities

• Failure to control noise

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CUSTOMER ERRORS

Preparation Errors

• Failure to bring necessary materials to the encounter

• Failure to engage the correct service

Encounter Errors

• Failure to remember steps in the service process

• Failure to follow system flow

• Failure to follow instructions

Resolution Errors

• Failure to learn from experience

• Failure to adjust expectations appropriately

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SEVEN STEPS TO POKA-YOKE ATTAINMENT

Quality Processes

Utilize a team environment

Elimination of Errors

Eliminate the “Root Cause” of The Errors

Do It Right The First Time

Eliminate Non-Value Added Decisions

Implement a Continual Improvement Approach

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POKA-YOKE APPROACH

Proactive Approach :

A fully implemented ZERO DEFECT QUALITY system requires Poka-

Yoke usage at or before the inspection points during the process.

Poka-yoke will catch the errors before a defective part is

manufactured 100% of the time.

Reactive Approach :

Check occurs immediately after the process.

Can be an operator check at the process or successive check at

the next process.

Not 100% effective, will not eliminate all defects.

Effective in preventing defects from being passed to next process.

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Two Poka-Yoke System approaches are utilized in

manufacturing which lead to successful ZERO DEFECT

QUALITY:

1.Control Approach:

Shuts down the process when an error occurs.

Keeps the “suspect” part in place when an operation is

incomplete.

2.Warning Approach

Signals the operator to stop the process and correct the

problem.

May 15, 2016 32

CONTROL SYSTEM

Takes human element out of the equation ; does not

depend on an operator or assembler.

Has a high capability of achieving zero defects.

Machine stops when an irregularity is detected.

May 15, 2016 33

WARNING SYSTEMS

Sometimes an automatic shut off system is not an option.

A warning or alarm system can be used to get an operators

attention.

Color coding is also an effective non-automatic option

May 15, 2016 34

TEN TYPES OF HUMAN MISTAKES

Forgetfulness

Mis-understanding

Wrong identification

Lack of experience

Willful (ignoring rules or procedure)

Inadvertent or sloppiness

Slowliness

Lack of standardization

Surprise (unexpected machine operation, etc.)

Intentional (sabotage)

May 15, 2016 35

POKA-YOKE DEVICES

Poka yoke is implemented by using simple objects like fixtures, jigs, warning devices and the like to prevent people from committing mistakes, even if they try to!.

The main feature of poka-yoke devices is their exceptional suitability for reducing or eliminating defects through effective feedback and instantaneous corrective action.

These devices are capable of being used all the time by all workers; simple and usually installed with low implementation cost.

Poka-yoke devices help eliminate errors and defects by giving machines the “intelligence” to stop and signal when a error occurs.

Poka-yoke devices stop machines and alert workers when a problem exists.

May 15, 2016 36

THE THREE LEVELS OF POKA-YOKE:

There are three levels at which your company can effect

poka-yoke:

Eliminating errors defects and losses at the source or

prevention of a mistake from being committed..

Detection of a loss or mistakes it occurs,allowing correction

before it becomes a problem.

Detection of a loss or mistakes after it has occurred,just in

time before it blows up into a major issue(least effective).May 15, 2016 37

EXAMPLES OF POKA-YOKE PRODUCTS

May 15, 2016 38

IMPLEMENTATION IN MANUFACTURING

Poka-yoke can be implemented at any step of a manufacturing process where something can go wrong or an error can be made.

Shigeo Shingo recognized three types of poka-yoke for detecting and preventing errors in a mass production system:

The contact method identifies product defects by testing the product's shape, size, color, or other physical attributes.

The fixed-value (or constant number) method alerts the operator if a certain number of movements are not made.

The motion-step (or sequence) method determines whether the prescribed steps of the process have been followed.

May 15, 2016 39

ADVANTAGES

They are simple and cheap.

They are part of the process, implementing what Shingo

calls "100%" inspection.

They are placed close to where the mistakes occur,

providing quick feedback to the workers so that the

mistakes can be corrected.

Once put in place, they require minimal supervision.

May 15, 2016 40

CONCLUSION

Poka-yokes deals with understanding why people make errors

and how to analyze the process to know where errors are likely to occur

and what root causes contribute to them.

Since the poka-yoke devices detect errors at their roots n prevent them

from blowing up to become bigger problems, there is consistency in the

quality of the products, saving the cost and time spent in subsequent

quality inspection processes.

May 15, 2016 41

INTRODUCTION

KAI = CHANGE

ZEN = GOOD

"CHANGE FOR THE BETTER"

Kaizen = Continuous Improvement

...by Everybody! Everyday! Everywhere!

WHAT IS KAIZEN?

A Japanese philosophy that focuses on continual improvement throughout all

aspects of life

When applied to the workplace, it can improve every function of a business,

from manufacturing to marketing and from the CEO to the assembly-line

workers

Aims to eliminate waste in all systems of an organization through improving

standardized activities and processes

THE CONTINUOUS CYCLE OF KAIZEN ACTIVITY HAS

SEVEN PHASES:

Identify an opportunity

Analyze the process

Develop an optimal solution

Implement the solution

Study the results

Standardize the solution

Plan for the future

May 15, 2016 44

HISTORY

Kaizen was originally introduced to the West by Masaaki Imai in his

book Kaizen: The Key to Japan’s Competitive Success in 1986

Today Kaizen is recognized worldwide as an important pillar of an

organization’s long-term competitive strategy.

KAIZEN ACTIVITIES COVER IMPROVEMENTS IN A NUMBER OF

AREAS, INCLUDING:

Quality – Bettering products, service, work environment, practice and processes.

Cost – Reducing expenses and manpower, and use of material, energy and resources.

Delivery – Cutting delivery time, movement and non-value-added activities

Management – Improving procedures, training, morale, administration, planning, flow,

information systems, documentation and reporting.

Safety – Decreasing hazardous situations, unsafe working conditions, chances of resource

depletion and damage to the environment.

THE FOLLOWING ARE SOME BASIC TIPS FOR DOING KAIZEN:

Replace conventional fixed ideas with fresh ones.

Start by questioning current practices and standards.

Seek the advice of many associates before starting a Kaizen activity.

Think of how to do something, not why it cannot be done.

Don’t make excuses. Make execution happen.

Do not seek perfection. Implement a solution right away, even if it covers only 50 percent of the

target.

Correct something right away if a mistake is made.

KAIZEN IS CONTINUOUS IMPROVEMENT THAT IS BASED ON

CERTAIN GUIDING PRINCIPLES:

Good processes bring good results

Go see for yourself to grasp the current situation

Speak with data, manage by facts

Take action to contain and correct root causes of problems

Work as a team

Kaizen is everybody’s business

IMPLEMENTATION The Toyota Production System is known for kaizen, where all line personnel are expected to stop

their moving production line in case of any abnormality and, along with their supervisor, suggest

an improvement to resolve the abnormality which may initiate a kaizen

The cycle of kaizen activity can be defined as:

THANK YOU

May 15, 2016 50