Lexicon Flashcards
Cell layout
Layout where transforming resources with a common purpose (such as, processing the same types of product, serving similar types of customer, etc.) are located together in close proximity (a cell).
Product (line) layout (examples)
high volume, low variety, mass production
- car manufacturing
- cafeteria with line-layout
- continuous service (electricity, internet, etc.)
Manage demand
A strategy to influence the demand in order to match it to the capacity.
Input-output model (transformation process)
Transformational resources (those people, skills, information, plant, equipment and technology) that do the transforming, and the transformed resources (raw materials, components, information and customers) that are transformed. These enter a process, operation or system (which exists in its specific context) and transforms (by combining the transformational and transformed resources) into a number of outputs(outputs may be products, services or a mixture of the two). Outputs should have greater value than the individual inputs - hence you have a process, operation or supply network that delivers value.
Production operations (4 characteristics!)
Production operations =
(1) identified by their output (products)
(2) tangible / can be moved
(3) production occurs before consumption (non-perishable=„has some shelf life”)
(4) quality measured objectively (size, colour,…)
Production operation types (5)
- Project process
- Job shop process
- Batch process
- Mass process
- Continuous process
Principles of TQM
1) Stress on TOTALITY
2) Include every person in the organisation “quality at he source”
3) Focus on “zero-defects” and “do it right first time”
4) Kaizen (small incremental improvements)
5) Concept of internal and external customers
6) Use scientific methods (SPC, fishbone, cost analysis)
7) Implement Systems that improve Quality (ISO 9000)
8) Examine all costs related to quality (external failure costs, prevention costs,appraisal costs,internal failure costs)
Service operations type (3)
- Professional services
- Service shops
- Mass Services
Job shops (examples)
- bakery
- tailor (not bespoke) like …..
-10 bridges all the same –> customization only at the end
-
Which costs to consider in Invetory Mgmt?
cost of holding vs cost of ordering
LONG-THIN VS. SHORT FAT (+/-)
Projects (project processes) (characteristics)
- single outcome or deliverable
- single and highly bespoke creation “a one-off”
- performance managed through 3 criteria
- on time: long periods
- on cost: expesive
- on quality
Functional (Process) Layout (examples)
“the flow of products or customers can take different routes through different functional areas.”
Laut my.WBS:
- hospitals
- libraries
- supermarkets
- bakery (batch process)
- carpenter shop (job shop)
- radiology unit
How can LCP/MD be enhanced?
- price incentives (increase price to reduce demand, discount to increase demand)
- complimentary services (e.g. free shipping)
- use reservation systems (better forecasting)
- create customer awareness of the company’s capacity (navigate towards “quiet periods)
Functional layout (+/-)
+:
- High variety & mix flexibility
- Rela*vely robust in case of disrup*ons
- Easy to supervise
-:
- Low utlisation
- Can have very high WIP
- Complex flow
When would you use LCP?
In capital intensive businesses (production ops) where the priority is on facility utilisation.
Managed Demand (+/-)
Benefits of an MD strategy:
- It reduces the cost of creating capacity flexibility
- It improves utilisation of assets.
- It can reduce service failure (waiting and queuing).
Limitations of an MD strategy:
- high levels of planning and forecasting - this can be costly.
- A detailed understanding of price sensitivity of customers is required.
- Discounting may have unintended consequences, outside of the discount period (it may devalue products and services). “bullwhip effect”
- You may create permanent loss of business.
Performance Measure
MANTRA: QSFDC
QUALITY = importance of high quality defined as :
-QUALITY of CONFORMANCE = high quality conformance infers low deviation/variation from the specification is accepted - low quality conformance infers high variation from the specification is accepted
-QUALITY of SPECIFICATION = it reflects high skills, valuable/expensive/precision raw materials. eg. specs of a laptop, specs of a car, etc.
SPEED = importance of fast delivery times ( (as defined from a customer perspective)
FLEXIBILITY = importance of flexible operation (as defined from a customer perspective)
DEPENDABILITY= importance of delivery ON TIME (as defined from a customer perspective)
COST = importance of LOW cost (as defined from a customer perspective)
DMAIC
D-Define
- Define the problem, set goals
M-Measure
- Gather Data
A - Analyze
- Analyze Data, identify “root causes”, establish problem hypothesis and validate
I - Improve
- test ideas, measure results
C - Control
- Standardize and implement
Service operations (4 characteristics)
Service operations =
(1) identified by their output (services)
(2) non-tangible
(3) production and consumption is simultaneously (cannot be stored, perish immediately)
(4) quality measured subjectively
Chase demand
A strategy that creates flexibility in an operation’s capacity to match increases and decreases in demand. This may take the form of a lag approach or a lead approach.
Chase Demand (+/-)
Benefits of an CD strategy:
- The operation is flexible to changes in customer demand.
- There is a reduced under- or over-production in the operation.
- Less waste in terms of resources.
Limitations of a CD strategy:
- Increased costs to provide flexibility of resources.
- It can reduce the levels of quality control.
- Increasing staff can be less costly than laying off staff - this can encourage practice such as ‘zero hours contracts’, which has negative connotations.
Service shops (examples)
- school teachers
- restaurant
- hotel reception
Fixed Position Layout (examples)
- Airplane production
- Street construction
- Consultant at the client
- Harvesting Salad
Projects (project processes) (examples)
- highway construction
- airplane production
- rail-bridge across a river
Level capacity plan
A strategy for maintaining capacity of an operation at a fixed level.
Product (or line) layout
Locating transforming resources in a sequence defined by the processing needs of a product or service.
What are the 5 SPC exception rules?
1) Run of 7 - shows a slow change of the process
2) Event above or below the Control limits - needs investigation
3) 2 or more consecutive events in the Warning zone - needs investigation
4) Cyclical pattern - refers so seasonality
5) Out of control with rapid up and down - process is not in controll, SPC is not helpful, doesnt give meaningful direction
Fixed Position Layout (+ and -)
+:
- Very high variety & mix flexibility
- Product/customer not moved
- High variety of tasks
-:
- Very high unit costs
- Scheduling space & activities can be difficult
- High variety of tasks
SPC - Why is it used?
SPC is a method of quality control to monitor and controll a process. More specifically we look at the variation within the process. It can be applied to any process where “conforming product” output can be measured. For example in manufacturing lines. Used in Six Sigma and TQM.
Batch process (characteristics)
- common in retail production
- e.g. fashion clothing, book printing, specialist sandwich production)
- single type of product over short run at higher volume in output
- batch itself can be different to other batches
–> easter egg production
- less flexibility in output (for that specific batch) than job shops but much higher volume is produced than job jobs
- high setup time
Mass production (examples)
- swatch watches
- sensors for cgm
Draw a Polar diagram of Perfomance Measurement in an Operation
Criticism of Lean
- often seen as “short term project”
- tool based approach rather than mgmt system
- managerial desire to improve cost efficieny rather than quality
- level of investment to sustain the approach
Professional Service (expamples)
- Doctor
- Consultant
- Lawyer
- Architects
- Lecturer
TYPES of inventory
1) Cycle inventory - how much is used in production process
2) Safety Inventory - buffer against demand uncertainty
3) Seasonal Inventory - invetory to match trends
4) Pipeline Inventory - inventory that is in the logistics pipeline
Criticism of TQM
1) excessive bureaucracy
2)recipe book approach
3) seen as a collection of mgmt approaches
Professional services (characteristics)
- high skill set
- costly in delivery
- high level of margin in sale
- coresspond to project processes and job shop processes
- one-to-one engagements with customers
- high level of customer contact
- time consuming
Inventory (+/-)
benefits:
- (can) mitigate uncertainty
- (can) reduce costs
- (can) gain value over time
- felxibility + efficieny
limitations:
- can hide problems in the process
- requires space
- requires capital
- mgmt costs
- deteriorates over time
Process types
Terms that are used to describe a particular general approach to managing processes. In manufacturing these are generally held to be project, jobbing, batch, mass and continuous processes; in services they are held to be professional services, service shops and mass services.
Long-thin vs Short-Fat
It is about TASK ALLOCATION. Breaking down operation in smaller processes. How do we allocate tasks to the workers.
Long & Thin: a number of stages
Short & Fat: a number of tasks by one individual
Example: Transformation Short & Fat to Long & Thin–> Maternity wards, Printing newspaper, Banking (every family had one banking manager, now its online/always a different person)
Why is the analysis of flow process charts so valuable?
process simplification
the elimination of non-value adding activities (waste)
the identification of delays, fail-points and bottlenecks
reduction in travelling distances
review of the appropriateness and frequency of inspection points
the design of controls and measurements.
Expressions to describe High Volume/Low Variety Operations
- Low unit cost
- Capital intesive
- High repeatability
- Well defined products
- Standardized
- Routine
- high staff utilisation
How can CD be enhanced?
- Sharing capacity between operations (i.e. multi-skilling)
- Cross training employees
- Use of Part-time employees
- Increase customer participation in the operation (e.g. airline checkin)
Mass services (characteristics)
- low skilled staff with narrow knowledge set
- low unit-cost of output
- inflexible staff and processes
Priciples of Lean
1) What is value from the perspective of the customer?
2) Identify waste
3) Make value flow continously without interruptions
4) Let the customer pull value from the producer
5) Pursue perfection
Batch processes
fashion clothing
book printing
specialist sandwich production
easter egg production
Fixed-position layout
Locating the position of a product or service such that it remains largely stationary, while transforming resources are moved to and from it.
Product (line) layout (+/-)
+:
- Low unit costs for high volume
- Opportunities for specialisationon of equipment
-:
- Can have low mix flexibility
- Not very robust when facing disruption
- Work can be very repetitive
Mass services (examples)
- Service Hotline (call center)
Service shops (characteristics)
- less skilled staff
- cheaper (cost of service provision is reduced)
- well defined process steps but with routes of options throuout the operation
Process configuration
The overall design and configuration of a process that determines the sequence of activities and the flow of transformed resources between them.
Short and Fat vs Long and Thin
Short & Fat:
The 4 Vs of an Operation
= basic description of the characteristics of an operation
- Variety (of production capability)
- Volume (in an operation)
- Visibility (of the process)
- Variation (of demand)
Level Capacity Plan (+/-)
Benefits of an LCP
- High utilisation of assets.
- Creates stable employment patterns.
- For operations that require low unit cost of production (think back to the 4Vs - this is the high volume, low variety and low variation in demand operation).
Limitations of an LCP:
- It requires the management of inventories (in production operations).
- There is great danger of over- and under-production in production operations.
- In service operations, it can lead to both service failure, and queuing/waiting (where demand is greater than supply); and also periods of waste (where supply is greater than demand).
What is capacity?
1) Must be defined in reference to a temporal dimension (x cars per hour/session/days..)
2) May be defined by either input measure (nr. of available labour hours in a production operation, nr. of available beds in a hospital) or output measure (cars finished per shift, nr. of patients per month)
3) Must reflect the nature of the transaction (e.g. No. of beds in a hotel per day - but not every guest shares a room)
Examples for Sustainibility and Responsibility
- Fair wages
- Safe working enviroment
Pollution prevention
Waste prevention
Protecting habitat
Less resource waste
Short & Fat (+/-)
+:
- higher mix flexibility
- higher volume flexibility
- more robust
- less monotonous
- higher sense of ownership
-:
- long Training times
- Equipment needs
- duplication of resources
- reliant on employees
LCP:
Demand > Capacity
Demand < Capacity
What happens in service ops and in production ops?
Demand > Capacity
- Service ops: queing, failure of service
- Production ops: use of inventory
Demand < Capacity
- Service ops: resource wastage
- Production ops: creation of inventory
Capable Process
Controll Limit falls within the specification range of a process. That means that 99,7 % of all variation can be accomodated within the output specification (as expected by the customer)
Cell layout (+/-)
+:
- Good variety & mix compromise
- Fast throughput
- Group work can result in good motivation
-:
- Can be costly to rearrange existing layout
- Can require more equipment
Cell layout examples
- department store / shopping center
- rolls royce jet engine production
- maternity unit in a hospital (“is one cell of the whole hospital”)
What is capacity management?
The aim of capacity management is to match the demand for services or goods with the capacity within the operation.
Functional (or process) layout
Layout where similar resources or processes are located together (sometimes called process layout).
FORMS of inventory
1) raw material
2) WIP
3) finsihed goods
