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Chapter 3: Employee Involvement
Motivation
Maslow’s Hierarchy of needs:
26-09-2018 1
Survival
Security
Social
Esteem
Self actualization
Herzberg’s two factor theory
• Motivators- recognition, responsibility, achievement, advancement
etc. (equivalent to Maslow’s upper level)
• Dissatisfiers/hygiene factor-salary, fringe benefits, working condition,
organisational policy and technical supervision.
26-09-2018 2
Employee wants and manager’s perception of
employee wants:
Factors Employee rating Manager rating
Interesting work 1 5
Appreciation 2 8
Involvement 3 10
Job security 4 2
Good pay 5 1
Promotion/growth 6 3
Good working condition 7 4
Loyalty to employees 8 7
Help with personal problems 9 9
Tactful discipline 10 6
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Achievement of motivated workforce
1. Know the self
2. Know your employees
3. Establish a positive attitude
4. Share the goals
5. Monitor progress
6. Communicate effectively
7. Celebrate the success
8. Develop interesting work
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Job rotation (Fig. a)
Job enlargement (Fig. b)
Job enrichment (Fig. b)
Job rotation, Job enlargement, Job enrichment
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Fig. a. Job rotation
Fig. b. Job enlargement and
job enrichment
Fig. c. Job rotation, Job enlargement and job enrichment
Merits of job rotation, job enragement and job
enrichment
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Benefits of job enlargement
• Interesting and challenging job
• Improves in decision making
• Identifies future managerial calibre
• Identifies higher order needs of employees
• Reduces workload of superiors
Benefits of job enrichment
• Gives the worker autonomy, responsibility and control
• The worker get achievement, recognition and self actualisation
• The worker get the sense of belongingness and importance in the organisation
• The workers find the job more meaningful
• Motivates the worker to give best performance
Benefits of job rotation
• Helps managers to explore the hidden talent
• Helps individuals to explore their interest
• Identifies knowledge, skills and attitudes
• Motivate employees to deal with new challenges
Team
Importance of team:
• Many heads are more knowledgeable than one
• The whole is greater than the sum of its members
• The team members develop a good relationship with each other
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Types of team
• Process improvement team: members 6-10, limited the work unit, life
cycle is temporary.
• Cross functional team: members 6-10, represent a no. of different
functional areas such as engineering, accounting, production, quality
etc. This team is also temporary.
• Natural work team: it is not voluntary. Manager is part of the team.
• Self directed or self managed team
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Characteristics of a successful team
1. Sponsor
2. Team charter
3. Team composition
4. Training
5. Ground rules
6. Clear objective
7. Accountability
8. Well-defined decision procedure
9. Resources
10. Trust
11. Effective problem solving
12. Open communications
13. Appropriate leadership
14. Balanced participation
15. Cohesiveness
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Types of decision making
1. Nondecision
2. Unilateral decision
3. Handclap decision
4. Minority rule decision
5. Major rule decision
6. Consensus
26-09-2018 10
Methods to involve employees
• Suggestion system
1. Be progressive
2. Remove fear
3. Simplify the process
4. Respond quickly
5. Reward the idea
• Recognition and reward
• Gainsharing: it is a financial reward and recognition that result from
organisational improved performance.
• Performance appraisal
26-09-2018 11
Benefits from employee involvement
• Improves the quality and increases productivity
• Makes better decision using their expert knowledge of the process
• Employees are able to spot and pinpoint areas for improvement
• Employees are better able to take immediate correction for improvement
• Reduces labour/management hassle by more effective communication and
co-operation
• Employees are better able to accept change because they control the work
environment
• Employees have an increased commitment to unit goals because they are
involved
26-09-2018 12
Chapter 4: Continuous Process Improvement
We continuously improve by
1. Viewing all works as process whether it is associated with production or
business
2. Making all the process effective, efficient and adoptable
3. Anticipating changing customer needs
4. Maintaining constructive dissatisfaction with the present level of performance
5. Eliminate waste and rework
6. Investigating the activities that donot add value to the product or service with
the aim of eliminating these
7. Using benchmarking to improve competitive advantage
8. Innovating to achieve breakthroughs
9. Using technical tools-SPC, experimental design, QFD, benchmarking
26-09-2018 13
Process
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O/P
Information
Data
Product
Service etc
Outcome
Feedback
i/p
Material
Money
Information
Data etc
Process
People
Equipment
Methods
Procedures
Environment
material
Fig. input output process model
Improvement of process
• Reduce resources
• Reduce errors
• Meet or exceed the expectation of the customers
• Make the process safer
• Make the process more satisfactory-ergonomic design
26-09-2018 15
Juran triology
1. Planning
a) Determine the customer
b) Discover the need of the customer-stated need and real need
c) Planning to develop the product or service having the required features
d) Develop the process which is able to produce the required or service
e) Translate the process into operation
2. Control
a) Evaluate actual operating performance
b) Compare actual performance to goals
c) Act on difference
3. Improvement
a) Repair
b) Refinement
c) Renovation
d) Reinvention
26-09-2018 16
PDSA cycle
It is a problem solving method. Developed by Shewhart and modified
by Deming.
26-09-2018 17
Do
PlanAct
Study
Plan carefully what to be done
Carryout the plan
Act on the difference by identifying
what worked as planned what didn’t
Phases of PDSA cycle
26-09-2018 18
Do
PlanAct
Study
Identify the opportunity
Analyze the process
Develop the optimal solution
ImplementStudy the results
Standardise the solution
Plan for future
Ph-1
Ph-2
Ph-3
Ph-4Ph-5
Ph-6
Ph-7
KAIZEN 5 S’ Philosophy
• SEIRI (segregation/simplify): simplify what is useful and what is not
• SEITON (orderliness):
• SEISO (cleanliness)
• SEIKETSU (standardisation):continuous improvement requires
evaluation and comparison with a set of target and to make the
process standardised.
• SHITSUKE (sustain): continuous process improvement should repeat
to sustain to achieve a higher level of future development.
26-09-2018 19
Quality circle
Prof. Kaoru Ishikawa is the father of quality circle.
It is voluntary group of people, who meet together on regular basis to identify, analyse and solve quality, productivity, cost reduction, safety
and other problem in their work area leading to improvement in their performance and enrichment of the work life.
• Members: 5-10
• Problem areas: productivity, quality, cost reduction, safety etc
• Composition: member, leader, facilitator and coordinator
• Periodicity: once in a week, however it may vary depending upon the situation
▪ Steps involved in QC:
1. Problem identification
2. Problem selection
3. Problem analysis
4. Recommendation and implementation
26-09-2018 20
Techniques applied by QC
• Brainstorming
• Data analysis
• Pareto analysis
• Cause and effect diagram
26-09-2018 21
Cause and effect diagram
26-09-2018 22
Latest/conventional
technology
People
Equipment/methods
Material
Environment
Quality of product
/service
Stack holders
Regular/temporary
Trained/untrained
Motivated/demotivated
Composition
Morphology/microstructure
Digital/analog
New/old
Highly precise/less precise
Temperature
Light
Humidity, wind, space etc.
Properties i.e., k, µ, α, c etc.
Pareto analysis
(Italian economist, Vilfredo Federico Damaso Pareto)
26-09-2018 23
Causes/ type of failure
Frequencyofoccurrence
%offrequencyofoccurrence
Vital few Trivial many
Just in Time (JIT)
➢A philosophy rather than a technique. Its main aim is to eliminate all
types of wastes and to create a manufacturing system which is
responsive to changing customer/market needs.
➢JIT provides the necessary parts at right quantity and right parts at
right time and place by using minimum facilities.
➢Products are assembled just before they are sold, subassemblies are
made just before they are assembled and components are fabricated
just before they are subassembled.
26-09-2018 24
“When you buy bananas all you want is the fruit not the skin, but you have to pay for the
skin also. It is a waste. And you the customer should not have to pay for the waste.” -
Shigeo Shingo
7 wastes (Shigeo Shingo, Japanese industrial engineer, Toyota Production
System, TPS)
• Waste of overproduction
• Waste of waiting
• Waste of transportation
• Waste of processing itself
• Waste of stock
• Waste of motion
• Waste of making defective products
26-09-2018 25
JIT contd.
Pull and push system
26-09-2018 26
Benefits of JIT
1. Product cost: Due to reduction in manufacturing cycle time, waste
and inventories.
2. Quality: Because of continuous quality improvement programme.
3. Design: Due to flexible system, alternative design can be brought
quickly into the shop floor by fast respond to changing market.
4. Administrative ease and simplicity
26-09-2018 27
Kanban
• Visual card or signal.
26-09-2018 28
26-09-2018 29
KANBAN
6 generally accepted rules for KANBAN
1. Downstream may only withdraw items in the precise amount
specified on the Kanban.
2. Upstream process may only send downstream in the precise
amount and sequences specified by the Kanban.
3. No items are made or moved without a Kanban.
4. A kanban must accompany each item at all the time.
5. Defects and incorrect amounts are never sent to the next
downstream process.
6. The number Kanban should be monitored carefully to reveal
problems and opportunities for improvement.
26-09-2018 30
Chapter 5: Supplier Partnership
26-09-2018 31
3 key elements:
1. Long term commitment
2. Trust
3. Shared vision
Type of sourcing
• Sole source: patent, specification, raw material, location etc.
• Multiple sourcing: 2 or more suppliers. Competition results in better
quality, low price and better service.
• Single sourcing: planned decision to select one supplier where
suppliers are available. Results in long term commitment, patterning
relation, trust etc.
26-09-2018 32
Supplier selection
Make or buy decision
Conditions :
1. The supplier understands and appreciate the management philosophy of the
organisation.
2. The supplier has stable management system
3. The supplier maintains high technical specifications/standards.
4. The supplier can supply precisely those items which are required by the customer
5. The supplier has the capability to produce the amount of production needed.
6. There is no danger of supplier separating corporate secrets
7. The price is right and delivery date is maintained. They are easily accessible in terms of
transportation and communication.
8. The supplier is sincere in implementing the contract provision
9. The supplier has an effective quality system-ISO/QS 9000 etc.
10. The supplier has a tract record of customer satisfaction and organisational credibility.
26-09-2018 33
Chapter 6: Performance Measures
Objectives:
1. Establish a baseline measures and reveal the trends
2. Determine which process needs to improve
3. Indicate process gain or losses
4. Compare goals with actual performance
5. Provide information for individual or team evaluation
6. Determine overall performance of the organisation
26-09-2018 34
Typical measurements
• Human resources: lost time due to accident, absenteeism, employee satisfaction index,
training hours per employee, training cost per employee, number of grievences.
• Customer : no of complaints, no of on time deliveries, customer satisfaction index, time
to resolve complaints, report cards
• Production : SPC chart, amount of scrap/rework, machine downtime period, cost per
unit, actual performance to goal.
• R & D : new product time to market, design change period, average time to process
proposal.
• Suppliers : on time delivery, billing accuracy, JIT delivery target, supplier that are error
free.
• Marketing and sales: sales expense to revenue, order accuracy, new customer, gain or
loss account, no of successful customer per week.
• Administration : revenue per employee, expense to revenue, cost of poor quality,
percent of payroll distributed on time.
26-09-2018 35
Basic characteristics that measure the
performance of a product, process or service
1. Quantity
2. Cost
3. Time
4. Accuracy
5. Function
6. Service
7. Aesthetics
26-09-2018 36
1. Time series graph
2. Control chart
3. Capability index
4. Taguchi’s loss function
5. Cost of poor quality
6. Malcolm Baldrige National Quality Award
26-09-2018 37
Presentation of performance measures
26-09-2018 38
Frequency
Qualitycharacteristics
No of subgroups/samples
2. Control chart1. Time series graph
3. Capability index: ratio of tolerance
to process capability, i.e., 𝑐 𝑝 =
30−20
32−18
=
10
14
=< 1
26-09-2018 39
4. Taguchi’s loss function
26-09-2018 40
Step function/traditional view
Continuous or quadratic function
/ Taguchi’s viewTarget
Cost associated with any product, process or system when they are
deviated from its perfectness. Cost associated with poor quality.
Quality cost bases:
• Labour : quality cost per hour of direct labour.
• Production: quality cost per dollar of production.
• Sales: quality cost per dollar of net sales.
• Unit: quality cost per unit, e.g., no. of boxes, kilogram of material,
meter of cloth etc.
26-09-2018 41
5. Cost of poor quality:
Elements of quality cost
1. Preventive cost: cost incurred in taking precautions to prevent and
recurrence the causes of failures in upcoming products or services.
2. Appraisal cost: cost associated with all types of inspection, tests,
audits and evaluation of any product or service.
3. Failure cost
a) Internal failure: cost associated in evaluating, disposal, replace or rework of
any defective products found after production.
b) External failure: cost incurred for the products or services not meeting the
customer requirement after delivery to the customer. E.g., warranty claim,
liability lost, penalties, lost sale etc.
26-09-2018 42
Optimum quality cost
26-09-2018 43
Quality improvement strategy
Every failure has some root causes and causes are preventable and prevention is cheaper
and better than detection.
Some strategies:
• Reduce failure cost by problem solving: concentrate on external failure cost as it gives
more return on investment
• Invest right prevention activities:
1. Comprehensive review before release of a product
2. Involve the personal of appropriate functional areas at beginning (concurrent
engineering)
3. Selection of supplier based on quality not on price.
4. Reliability testing
5. Proper training
• Reducing appraisal cost:
26-09-2018 44
Reducing appraisal cost:
1. Is 100% inspection is required?
2. Can inspection be reduced, relocated or eliminated?
3. Is the inspection method most efficient?
4. Could inspection be made automated?
5. Should SPC be used?
6. Should operating personal be responsible for inspection?
7. Is appraisal is being used as the substitute of prevention?
26-09-2018 45
MBNQA
The award is given to the US organisations for their excellence in
performance. The name of the award is given after the name of US
secretary of commerce during 1981-87.
Eligible organisations:
1. Manufacturing
2. Service
3. Health care
4. Small business
5. Education
6. Non profit
26-09-2018 46
Baldrige criteria for performance excellence
26-09-2018 47
1. Leadership: how the mgt. leads the organisation and organisation leads the community.
2. Strategic planning: how the organisation plans to implement in strategic direction.
3. Customer and market focus: how the organisation builds and maintains the strong and
long lusting relations with customers.
4. Information and analysis: how the mgt. uses data to support key processes and
organisational performance.
5. Human resources focus: how the organisation empowers and involves the work force.
6. Process management: how the organisation design, manage and improve the key
processes.
7. Business/organisational performance results: How the organisation performs in terms
of customer satisfaction, finance, operations, governance, social responsibility and how
the organisations compares with its competitors.

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quality engineering(ME522) part 2

  • 1. Chapter 3: Employee Involvement Motivation Maslow’s Hierarchy of needs: 26-09-2018 1 Survival Security Social Esteem Self actualization
  • 2. Herzberg’s two factor theory • Motivators- recognition, responsibility, achievement, advancement etc. (equivalent to Maslow’s upper level) • Dissatisfiers/hygiene factor-salary, fringe benefits, working condition, organisational policy and technical supervision. 26-09-2018 2
  • 3. Employee wants and manager’s perception of employee wants: Factors Employee rating Manager rating Interesting work 1 5 Appreciation 2 8 Involvement 3 10 Job security 4 2 Good pay 5 1 Promotion/growth 6 3 Good working condition 7 4 Loyalty to employees 8 7 Help with personal problems 9 9 Tactful discipline 10 6 26-09-2018 3
  • 4. Achievement of motivated workforce 1. Know the self 2. Know your employees 3. Establish a positive attitude 4. Share the goals 5. Monitor progress 6. Communicate effectively 7. Celebrate the success 8. Develop interesting work 26-09-2018 4 Job rotation (Fig. a) Job enlargement (Fig. b) Job enrichment (Fig. b)
  • 5. Job rotation, Job enlargement, Job enrichment 26-09-2018 5 Fig. a. Job rotation Fig. b. Job enlargement and job enrichment Fig. c. Job rotation, Job enlargement and job enrichment
  • 6. Merits of job rotation, job enragement and job enrichment 26-09-2018 6 Benefits of job enlargement • Interesting and challenging job • Improves in decision making • Identifies future managerial calibre • Identifies higher order needs of employees • Reduces workload of superiors Benefits of job enrichment • Gives the worker autonomy, responsibility and control • The worker get achievement, recognition and self actualisation • The worker get the sense of belongingness and importance in the organisation • The workers find the job more meaningful • Motivates the worker to give best performance Benefits of job rotation • Helps managers to explore the hidden talent • Helps individuals to explore their interest • Identifies knowledge, skills and attitudes • Motivate employees to deal with new challenges
  • 7. Team Importance of team: • Many heads are more knowledgeable than one • The whole is greater than the sum of its members • The team members develop a good relationship with each other 26-09-2018 7
  • 8. Types of team • Process improvement team: members 6-10, limited the work unit, life cycle is temporary. • Cross functional team: members 6-10, represent a no. of different functional areas such as engineering, accounting, production, quality etc. This team is also temporary. • Natural work team: it is not voluntary. Manager is part of the team. • Self directed or self managed team 26-09-2018 8
  • 9. Characteristics of a successful team 1. Sponsor 2. Team charter 3. Team composition 4. Training 5. Ground rules 6. Clear objective 7. Accountability 8. Well-defined decision procedure 9. Resources 10. Trust 11. Effective problem solving 12. Open communications 13. Appropriate leadership 14. Balanced participation 15. Cohesiveness 26-09-2018 9
  • 10. Types of decision making 1. Nondecision 2. Unilateral decision 3. Handclap decision 4. Minority rule decision 5. Major rule decision 6. Consensus 26-09-2018 10
  • 11. Methods to involve employees • Suggestion system 1. Be progressive 2. Remove fear 3. Simplify the process 4. Respond quickly 5. Reward the idea • Recognition and reward • Gainsharing: it is a financial reward and recognition that result from organisational improved performance. • Performance appraisal 26-09-2018 11
  • 12. Benefits from employee involvement • Improves the quality and increases productivity • Makes better decision using their expert knowledge of the process • Employees are able to spot and pinpoint areas for improvement • Employees are better able to take immediate correction for improvement • Reduces labour/management hassle by more effective communication and co-operation • Employees are better able to accept change because they control the work environment • Employees have an increased commitment to unit goals because they are involved 26-09-2018 12
  • 13. Chapter 4: Continuous Process Improvement We continuously improve by 1. Viewing all works as process whether it is associated with production or business 2. Making all the process effective, efficient and adoptable 3. Anticipating changing customer needs 4. Maintaining constructive dissatisfaction with the present level of performance 5. Eliminate waste and rework 6. Investigating the activities that donot add value to the product or service with the aim of eliminating these 7. Using benchmarking to improve competitive advantage 8. Innovating to achieve breakthroughs 9. Using technical tools-SPC, experimental design, QFD, benchmarking 26-09-2018 13
  • 14. Process 26-09-2018 14 O/P Information Data Product Service etc Outcome Feedback i/p Material Money Information Data etc Process People Equipment Methods Procedures Environment material Fig. input output process model
  • 15. Improvement of process • Reduce resources • Reduce errors • Meet or exceed the expectation of the customers • Make the process safer • Make the process more satisfactory-ergonomic design 26-09-2018 15
  • 16. Juran triology 1. Planning a) Determine the customer b) Discover the need of the customer-stated need and real need c) Planning to develop the product or service having the required features d) Develop the process which is able to produce the required or service e) Translate the process into operation 2. Control a) Evaluate actual operating performance b) Compare actual performance to goals c) Act on difference 3. Improvement a) Repair b) Refinement c) Renovation d) Reinvention 26-09-2018 16
  • 17. PDSA cycle It is a problem solving method. Developed by Shewhart and modified by Deming. 26-09-2018 17 Do PlanAct Study Plan carefully what to be done Carryout the plan Act on the difference by identifying what worked as planned what didn’t
  • 18. Phases of PDSA cycle 26-09-2018 18 Do PlanAct Study Identify the opportunity Analyze the process Develop the optimal solution ImplementStudy the results Standardise the solution Plan for future Ph-1 Ph-2 Ph-3 Ph-4Ph-5 Ph-6 Ph-7
  • 19. KAIZEN 5 S’ Philosophy • SEIRI (segregation/simplify): simplify what is useful and what is not • SEITON (orderliness): • SEISO (cleanliness) • SEIKETSU (standardisation):continuous improvement requires evaluation and comparison with a set of target and to make the process standardised. • SHITSUKE (sustain): continuous process improvement should repeat to sustain to achieve a higher level of future development. 26-09-2018 19
  • 20. Quality circle Prof. Kaoru Ishikawa is the father of quality circle. It is voluntary group of people, who meet together on regular basis to identify, analyse and solve quality, productivity, cost reduction, safety and other problem in their work area leading to improvement in their performance and enrichment of the work life. • Members: 5-10 • Problem areas: productivity, quality, cost reduction, safety etc • Composition: member, leader, facilitator and coordinator • Periodicity: once in a week, however it may vary depending upon the situation ▪ Steps involved in QC: 1. Problem identification 2. Problem selection 3. Problem analysis 4. Recommendation and implementation 26-09-2018 20
  • 21. Techniques applied by QC • Brainstorming • Data analysis • Pareto analysis • Cause and effect diagram 26-09-2018 21
  • 22. Cause and effect diagram 26-09-2018 22 Latest/conventional technology People Equipment/methods Material Environment Quality of product /service Stack holders Regular/temporary Trained/untrained Motivated/demotivated Composition Morphology/microstructure Digital/analog New/old Highly precise/less precise Temperature Light Humidity, wind, space etc. Properties i.e., k, µ, α, c etc.
  • 23. Pareto analysis (Italian economist, Vilfredo Federico Damaso Pareto) 26-09-2018 23 Causes/ type of failure Frequencyofoccurrence %offrequencyofoccurrence Vital few Trivial many
  • 24. Just in Time (JIT) ➢A philosophy rather than a technique. Its main aim is to eliminate all types of wastes and to create a manufacturing system which is responsive to changing customer/market needs. ➢JIT provides the necessary parts at right quantity and right parts at right time and place by using minimum facilities. ➢Products are assembled just before they are sold, subassemblies are made just before they are assembled and components are fabricated just before they are subassembled. 26-09-2018 24
  • 25. “When you buy bananas all you want is the fruit not the skin, but you have to pay for the skin also. It is a waste. And you the customer should not have to pay for the waste.” - Shigeo Shingo 7 wastes (Shigeo Shingo, Japanese industrial engineer, Toyota Production System, TPS) • Waste of overproduction • Waste of waiting • Waste of transportation • Waste of processing itself • Waste of stock • Waste of motion • Waste of making defective products 26-09-2018 25 JIT contd.
  • 26. Pull and push system 26-09-2018 26
  • 27. Benefits of JIT 1. Product cost: Due to reduction in manufacturing cycle time, waste and inventories. 2. Quality: Because of continuous quality improvement programme. 3. Design: Due to flexible system, alternative design can be brought quickly into the shop floor by fast respond to changing market. 4. Administrative ease and simplicity 26-09-2018 27
  • 28. Kanban • Visual card or signal. 26-09-2018 28
  • 30. 6 generally accepted rules for KANBAN 1. Downstream may only withdraw items in the precise amount specified on the Kanban. 2. Upstream process may only send downstream in the precise amount and sequences specified by the Kanban. 3. No items are made or moved without a Kanban. 4. A kanban must accompany each item at all the time. 5. Defects and incorrect amounts are never sent to the next downstream process. 6. The number Kanban should be monitored carefully to reveal problems and opportunities for improvement. 26-09-2018 30
  • 31. Chapter 5: Supplier Partnership 26-09-2018 31 3 key elements: 1. Long term commitment 2. Trust 3. Shared vision
  • 32. Type of sourcing • Sole source: patent, specification, raw material, location etc. • Multiple sourcing: 2 or more suppliers. Competition results in better quality, low price and better service. • Single sourcing: planned decision to select one supplier where suppliers are available. Results in long term commitment, patterning relation, trust etc. 26-09-2018 32
  • 33. Supplier selection Make or buy decision Conditions : 1. The supplier understands and appreciate the management philosophy of the organisation. 2. The supplier has stable management system 3. The supplier maintains high technical specifications/standards. 4. The supplier can supply precisely those items which are required by the customer 5. The supplier has the capability to produce the amount of production needed. 6. There is no danger of supplier separating corporate secrets 7. The price is right and delivery date is maintained. They are easily accessible in terms of transportation and communication. 8. The supplier is sincere in implementing the contract provision 9. The supplier has an effective quality system-ISO/QS 9000 etc. 10. The supplier has a tract record of customer satisfaction and organisational credibility. 26-09-2018 33
  • 34. Chapter 6: Performance Measures Objectives: 1. Establish a baseline measures and reveal the trends 2. Determine which process needs to improve 3. Indicate process gain or losses 4. Compare goals with actual performance 5. Provide information for individual or team evaluation 6. Determine overall performance of the organisation 26-09-2018 34
  • 35. Typical measurements • Human resources: lost time due to accident, absenteeism, employee satisfaction index, training hours per employee, training cost per employee, number of grievences. • Customer : no of complaints, no of on time deliveries, customer satisfaction index, time to resolve complaints, report cards • Production : SPC chart, amount of scrap/rework, machine downtime period, cost per unit, actual performance to goal. • R & D : new product time to market, design change period, average time to process proposal. • Suppliers : on time delivery, billing accuracy, JIT delivery target, supplier that are error free. • Marketing and sales: sales expense to revenue, order accuracy, new customer, gain or loss account, no of successful customer per week. • Administration : revenue per employee, expense to revenue, cost of poor quality, percent of payroll distributed on time. 26-09-2018 35
  • 36. Basic characteristics that measure the performance of a product, process or service 1. Quantity 2. Cost 3. Time 4. Accuracy 5. Function 6. Service 7. Aesthetics 26-09-2018 36
  • 37. 1. Time series graph 2. Control chart 3. Capability index 4. Taguchi’s loss function 5. Cost of poor quality 6. Malcolm Baldrige National Quality Award 26-09-2018 37 Presentation of performance measures
  • 38. 26-09-2018 38 Frequency Qualitycharacteristics No of subgroups/samples 2. Control chart1. Time series graph
  • 39. 3. Capability index: ratio of tolerance to process capability, i.e., 𝑐 𝑝 = 30−20 32−18 = 10 14 =< 1 26-09-2018 39
  • 40. 4. Taguchi’s loss function 26-09-2018 40 Step function/traditional view Continuous or quadratic function / Taguchi’s viewTarget
  • 41. Cost associated with any product, process or system when they are deviated from its perfectness. Cost associated with poor quality. Quality cost bases: • Labour : quality cost per hour of direct labour. • Production: quality cost per dollar of production. • Sales: quality cost per dollar of net sales. • Unit: quality cost per unit, e.g., no. of boxes, kilogram of material, meter of cloth etc. 26-09-2018 41 5. Cost of poor quality:
  • 42. Elements of quality cost 1. Preventive cost: cost incurred in taking precautions to prevent and recurrence the causes of failures in upcoming products or services. 2. Appraisal cost: cost associated with all types of inspection, tests, audits and evaluation of any product or service. 3. Failure cost a) Internal failure: cost associated in evaluating, disposal, replace or rework of any defective products found after production. b) External failure: cost incurred for the products or services not meeting the customer requirement after delivery to the customer. E.g., warranty claim, liability lost, penalties, lost sale etc. 26-09-2018 42
  • 44. Quality improvement strategy Every failure has some root causes and causes are preventable and prevention is cheaper and better than detection. Some strategies: • Reduce failure cost by problem solving: concentrate on external failure cost as it gives more return on investment • Invest right prevention activities: 1. Comprehensive review before release of a product 2. Involve the personal of appropriate functional areas at beginning (concurrent engineering) 3. Selection of supplier based on quality not on price. 4. Reliability testing 5. Proper training • Reducing appraisal cost: 26-09-2018 44
  • 45. Reducing appraisal cost: 1. Is 100% inspection is required? 2. Can inspection be reduced, relocated or eliminated? 3. Is the inspection method most efficient? 4. Could inspection be made automated? 5. Should SPC be used? 6. Should operating personal be responsible for inspection? 7. Is appraisal is being used as the substitute of prevention? 26-09-2018 45
  • 46. MBNQA The award is given to the US organisations for their excellence in performance. The name of the award is given after the name of US secretary of commerce during 1981-87. Eligible organisations: 1. Manufacturing 2. Service 3. Health care 4. Small business 5. Education 6. Non profit 26-09-2018 46
  • 47. Baldrige criteria for performance excellence 26-09-2018 47 1. Leadership: how the mgt. leads the organisation and organisation leads the community. 2. Strategic planning: how the organisation plans to implement in strategic direction. 3. Customer and market focus: how the organisation builds and maintains the strong and long lusting relations with customers. 4. Information and analysis: how the mgt. uses data to support key processes and organisational performance. 5. Human resources focus: how the organisation empowers and involves the work force. 6. Process management: how the organisation design, manage and improve the key processes. 7. Business/organisational performance results: How the organisation performs in terms of customer satisfaction, finance, operations, governance, social responsibility and how the organisations compares with its competitors.