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Lecture 30
Total Quality Management (Continued)
Books• Introduction to Materials Management, Sixth Edition, J. R. Tony Arnold, P.E., CFPIM, CIRM, Fleming
College, Emeritus, Stephen N. Chapman, Ph.D., CFPIM, North Carolina State University, Lloyd M. Clive, P.E., CFPIM, Fleming College
• Operations Management for Competitive Advantage, 11th Edition, by Chase, Jacobs, and Aquilano, 2005, N.Y.: McGraw-Hill/Irwin.
• Operations Management, 11/E, Jay Heizer, Texas Lutheran University, Barry Render, Graduate School of Business, Rollins College, Prentice Hall
Objectives• Variables and attributes • Control charts for variables• Parameters• Control charts for attributes• Tolerances• Process capability• Understanding continuous improvement• Deming 14 points• TQM• Seven quality tools• Maintenance and reliability• Reliability• Product failure rate• Providing redundancy• Maintenance cost• Total productive maintenance
Variables and Attributes
• Attributes data refers to quality characteristics that either conform to specification or do not (examples: visual inspection for color, missing parts, scratches, go-no-go gauging) Either the part is within tolerance or it is not.
Control Charts for Variables
• The purpose of control charts is to help distinguish between chance variations and variations due to assignable causes.
• Variables are characteristics that have continuous dimensions.
• Control charts for the mean, (x-bar), and the range, (R), are used to monitor processes that have continuous dimensions.
Control Charts for Variables
• The x-bar chart tells whether changes have occurred in the central tendency of a process.
The R-chart values indicate that a gain or loss in uniformity has occurred.
Parameters
• Two basic parameters used:
– Mean - measure of central tendency
– Range - measure of dispersion
• The range is defined as the difference between the largest and smallest items in one sample.
Control Charts for Attributes
• Attributes are typically classified as defective or nondefective.
• Two kinds of attribute control charts:
Those that measure the percent defective in a sample - p-charts.
Those that count the number of defects per unit of output - c-charts.
Tolerances
• Tolerances are limits of deviation from perfection and are established by the product design engineers to meet a particular design function
• Both the USL and LSL are related to the product specification and are independent of any process.
Two Types of Defect
• Excessive Spread, Incapable Process
– Range
– Standard deviation
• Mean Shift
• Both the USL and LSL are related to the product specification and are independent of any process.
Variables and Attributes
• Variables data can be measured on a continuous scale (examples: weight, dimensions, pH, temperature, pressure, etc.)
Process Capability
• The capability of the process is not related to the product specifications
• A process must be selected that can meet the specifications
• Processes can produce defects in two ways, by having too big a spread or by a shift in the average
Model for Improvement
Customer Need:What Results will meet the customer need?Current Knowledge:How well do we meet the customer need?What are the measures and processes?
Cycle for Learning and Improvement:Plan a specific change that results
in improvement.Test the change on a small scale.Study and learn from the test results.Act to implement the change.
PlanAct
Study Test
Customer Need
Current Knowledge
Understanding the Continuous Improvement Process
• There is variation in everything.• Reducing variation improves systems.• We are all in the system.• Teamwork is vital to improve systems.• A few simple tools will help.• Management must lead, but improvement is
everyone’s responsibility!
Deming’s 14 Points
1. Create constancy of purpose for improvement of product and service.
2. Adopt the new philosophy.
3. Cease dependence on inspection to achieve quality.
4. End the practice of awarding business on the basis of price tag alone.
5. Improve constantly and forever every process for planning, production, and service.
6. Institute training on the job.
7. Adopt and institute leadership.
Deming’s 14 Points
8. Drive out fear.
9. Break down barriers between staff areas.
10. Eliminate slogans, exhortations, and targets for the work force.
11. Eliminate numerical quotas for the work force and numerical goals for management.
12. Remove barriers that rob people of pride of workmanship. (annual rating system).
13. Institute a vigorous program of education and self-improvement for everyone.
14. Put everybody in the company to work to accomplish the transformation.
TQM
“No manufacturer that I know of possesses
enough knowledge and manpower to work
effectively with more than one vendor for
any item.”W. Edwards Deming, Out of the Crisis
The Limitations of Inspection
• Boredom• Fatigue• Unclear instructions• Noise• Laziness
Seven Quality Tools
• Process flow diagrams• Checklists• Check sheets• Pareto charts• Histograms• Cause and Effect (fishbone) Diagrams• Run charts
How do I know when to adjust?Statistical Process Control
• A tool for making economical decisions on when to make adjustments
• A tool with some statistical foundation
Maintenance and Reliability
Strategic Importance of Maintenance 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 and
equipment
Maintenance and Reliability
The objective of maintenance and reliability is to maintain the capability of the system while controlling costsMaintenance is all activities involved in
keeping a system’s equipment in working order
Reliability is the probability that a machine will function properly for a specified time
Important Tactics
Reliability1. Improving individual components
2. Providing redundancy
Maintenance1. Implementing or improving preventive
maintenance
2. Increasing repair capability or speed
Maintenance Strategy
Employee Involvement
Information sharingSkill trainingReward systemEmployee empowerment
Maintenance and Reliability Procedures
Clean and lubricateMonitor and adjustMake minor repairKeep computerized records
Results
Reduced inventoryImproved qualityImproved capacityReputation for qualityContinuous improvementReduced variability
Reliability
Improving individual components
Rs = R1 x R2 x R3 x … x Rn
where R1 = reliability of component 1R2 = reliability of component 2
and so on
Overall System ReliabilityR
elia
bili
ty o
f th
e sy
stem
(pe
rcen
t)
Average reliability of each component (percent)
| | | | | | | | |
100 99 98 97 96
100 –
80 –
60 –
40 –
20 –
0 –
n = 10
n = 1
n = 50n = 100n = 200n = 300
n = 400
Rs
R3
.99
R2
.80
Reliability Example
R1
.90
Reliability of the process is
Rs = R1 x R2 x R3 = .90 x .80 x .99 = .713 or 71.3%
Product Failure Rate (FR)
Basic unit of measure for reliability
FR(%) = x 100%Number of failures
Number of units tested
FR(N) = Number of failuresNumber of unit-hours of operating time
Mean time between failures
MTBF =1
FR(N)
Failure Rate Example
20 air conditioning units designed for use in NASA space shuttles operated for 1,000 hoursOne failed after 200 hours and one after 600 hours
FR(%) = (100%) = 10%220
FR(N) = = .000106 failure/unit hr220,000 - 1,200
MTBF = = 9,434 hrs1.000106
Failure Rate Example
20 air conditioning units designed for use in NASA space shuttles operated for 1,000 hoursOne failed after 200 hours and one after 600 hours
FR(%) = (100%) = 10%2
20
FR(N) = = .000106 failure/unit hr2
20,000 - 1,200
MTBF = = 9,434 hr1
.000106
Failure rate per trip
FR = FR(N)(24 hrs)(6 days/trip)FR = (.000106)(24)(6)FR = .153 failures per trip
Providing Redundancy
Provide backup components to increase reliability
+ x
Probability of first
component working
Probability of needing second
component
Probability of second
component working
(.8) + (.8) x (1 - .8)
= .8 + .16 = .96
Redundancy Example
A redundant process is installed to support the earlier example where Rs = .713
R1
0.90
0.90
R2
0.80
0.80
R3
0.99
= [.9 + .9(1 - .9)] x [.8 + .8(1 - .8)] x .99
= [.9 + (.9)(.1)] x [.8 + (.8)(.2)] x .99
= .99 x .96 x .99 = .94
Reliability has increased
from .713 to .94
Maintenance
Two types of maintenancePreventive maintenance – routine
inspection and servicing to keep facilities in good repair
Breakdown maintenance – emergency or priority repairs on failed equipment
Implementing Preventive Maintenance
Need to know when a system requires service or is likely to fail
High initial failure rates are known as infant mortality
Once a product settles in, MTBF generally follows a normal distribution
Good reporting and record keeping can aid the decision on when preventive maintenance should be performed
Computerized Maintenance System
Output Reports
Inventory and purchasing reports
Equipment parts list
Equipment history reports
Cost analysis (Actual vs. standard)
Work orders– Preventive
maintenance– Scheduled
downtime– Emergency
maintenance
Data entry– Work requests– Purchase
requests– Time reporting– Contract work
Data Files
Personnel data with skills, wages,
etc.
Equipment file with parts list
Maintenanceand work order
schedule
Inventory of spare parts
Repair history file
Maintenance Costs
The traditional view attempted to balance preventive and breakdown maintenance costs
Typically this approach failed to consider the true total cost of breakdowns Inventory Employee morale Schedule unreliability
Maintenance Costs
Total costs
Breakdown maintenance costs
Cos
ts
Maintenance commitment
Traditional View
Preventive maintenance costs
Optimal point (lowestcost maintenance policy)
Maintenance Costs
Cos
ts
Maintenance commitment
Full Cost View
Optimal point (lowestcost maintenance policy)
Total costs
Full cost of breakdowns
Preventive maintenance costs
Maintenance Cost Example
Should the firm contract for maintenance on their printers?
Number of Breakdowns
Number of Months That Breakdowns Occurred
0 2
1 8
2 6
3 4
Total: 20
Average cost of breakdown = $300
Maintenance Cost Example
1. Compute the expected number of breakdowns
Number of Breakdowns
Frequency Number of Breakdowns
Frequency
0 2/20 = .1 2 6/20 = .3
1 8/20 = .4 3 4/20 = .2
∑ Number of breakdowns
Expected number of breakdowns
Corresponding frequency= x
= (0)(.1) + (1)(.4) + (2)(.3) + (3)(.2)
= 1.6 breakdowns per month
Maintenance Cost Example
2. Compute the expected breakdown cost per month with no preventive maintenance
Expected breakdown cost
Expected number of breakdowns
Cost per breakdown= x
= (1.6)($300)
= $480 per month
Maintenance Cost Example
3. Compute the cost of preventive maintenance
Preventive maintenance cost
Cost of expected breakdowns if service contract signed
Cost of service contract
=
+
= (1 breakdown/month)($300) + $150/month= $450 per month
Hire the service firm; it is less expensive
Increasing Repair Capabilities
1. Well-trained personnel2. Adequate resources3. Ability to establish repair plan and priorities4. Ability and authority to do material planning5. Ability to identify the cause of breakdowns6. Ability to design ways to extend MTBF
How Maintenance is Performed
Operator Maintenance department
Manufacturer’s field service
Depot service(return equipment)
Preventive maintenance costs less and is faster the more we move to the left
Competence is higher as we move to the right
Total Productive Maintenance (TPM)
Designing machines that are reliable, easy to operate, and easy to maintain
Emphasizing total cost of ownership when purchasing machines, so that service and maintenance are included in the cost
Developing preventive maintenance plans that utilize the best practices of operators, maintenance departments, and depot service
Training workers to operate and maintain their own machines
Establishing Maintenance Policies
SimulationComputer analysis of complex
situationsModel maintenance programs before
they are implementedPhysical models can also be used
Expert systemsComputers help users identify problems
and select course of action
End of Lecture 30