CHAPTER 8 PROCESS MANAGEMENT: LEAN PRODUCTION & SIX SIGMA QUALITY ISSUES IN SUPPLY CHAIN MANAGEMENT Principles of Supply Chain Management: A Balanced Approach Prepared by INLINE Solutions pvt. Ltd.,
The Seven Wastes (Table 8.3) Wastes Description Overproducing Unnecessary production to maintain high utilizations Waiting Excess idle machine & operator & inventory wait time Transportation Excess movement of materials & multiple handling Over-processing Non-value adding manufacturing & other activities Excess Inventory Storage of excess inventory Excess Movement Unnecessary movements of employees Scrap & Rework Scrap materials & rework due to poor quality
The Five-Ss (Table 8.4) Japanese S-Term English Translation English S-Term Used 1. Seiri Organization Sort 2. Seiton Tidiness Set in order 3. Seiso Purity Sweep 4. Seiketsu Cleanliness Standardize 5. Shitsuke Discipline Self-discipline
Relationship between Order Quantity, Lot Size, and Average Inventory (Figure 8.1) When order quantity/lot size Q = 100, avg. inventory = 50; when Q is reduced to 50, avg. inventory falls to 25. 100 50 avg. inventory for Q=100 avg. inventory for Q=50 Time 25
Small Lot Size Increases Flexibility (Figure 8.2) AAAAAAAA-----BBBBBBBB ------CCCCCCCC----- 3 product changes Long setup times AAA BBB CCC DDD AAA BBB CCC DDD AAA 9 product changes Time Large Lot Size Approach Small Lot Size Approach Short setup times
A Kanban Pull System (Figure 8.3) Work cell A Mfg. Cell B Mfg. Cell A Movement of matl. into Work cell B creates a movement kanban to Work cell A Movement of finished component to assembly line creates a production kanban to Work cell B Movement of matl. to input area of Work cell B creates a production kanban to Work cell A Movement of matl. into Work cell A creates a movement kanban to the external supplier External supplies Input area Output area Final assembly line
To determine the number of containers or kanban card sets:
Where: D = the demand rate of the assembly line; T = the time for a container to make an entire circuit through the system, from being filled, moving, being emptied, and returning to be filled again; C = the container size, in number of parts; and S = the safety stock factor, from 0 to 100 percent. # of containers = DT(1 + S) C
Levels Description Yellow Belt Basic understanding of Six Sigma Methodology and tools in the DMAIC problem solving process. Team member on process improvement project. Green Belt A trained team member allowed to work on small, carefully defined Six Sigma projects, requiring less than a Black Belt’s full-time commitment. Black Belt Thorough knowledge of Six Sigma philosophies and principles. Coaches successful project teams. Identifies projects and selects project team members. Master Black Belt A proven mastery of process variability reduction, waste reduction and growth principles and can effectively present training at all levels
Flow Diagrams- Annotated boxes representing process to show the flow of products or customers.
Check Sheets- to determine frequencies for specific problems.
Pareto Charts- for presenting data in an organized fashion, indicating process problems from most to least severe.
Cause-and-Effect Diagrams (Fishbone or Ishikawa diagrams)- used to aid in brainstorming & isolating the causes of a problem.
Statistical Tools of Six Sigma (Cont.) Process Map for Customer Flow at a Restaurant (Figure 8.5)
Statistical Tools of Six Sigma (Cont.) Check Sheet for a Restaurant (Fig. 8.6) Problem M Tu W Th F Sa Su Tot %Tot long wait ////// ///// //////// ////// ///////// ////////// //// 48 34.0 cold food // / / /// // 9 6.3 wrong food ///// // / // ///// /// / 19 13.5 bad server ////// /// ///// / ////// // / 24 17.0 bad table / // / /// / 8 5.7 room temp // /// ///// ///// 15 10.6 No parking // ///// /////// 14 9.9 other / // / 4 2.9 Totals 17 14 23 13 34 33 7 141 100
Statistical Tools of Six Sigma (Cont.) Pareto Chart for Restaurant Problems (Fig. 8.7)
Statistical Tools of Six Sigma (Cont.) Cause-and-Effect Diagram for the Long Wait Problem (Fig. 8.8) Poor hiring practices Cooking delays LONG WAIT Washing machine breaks Credit card scanner breaks New automated cooking bays Run out of food Late deliveries Needs frequent maintenance Not enough tables Inadequate waiting area Too much overbooking Preference to VIPs Can’t find customers No system for food or drink pickup Understaffed shifts High turnover Untrained servers, cooks No supervision Methods Manpower Machinery Material