Supply Topic 3 (Supply Chain Quality Control) Flashcards
Lean thinking way
- value - supplying to customer
- waste - focus on elimination of waste
- improve the manufacturing processes of goods and provision of services
3 reasons why you apply lean management
- reduce efficiency
- reducing waste generated in operations
3.positively impacting supply chain performance
what is value?
- activity that changes the form, fit or function of a product
- what the customer is willing to pay for
value added activities (categories of activities along value stream)
- value-added
- necessary non-value added - won’t change form of product, but is necessary e.g. set up/inspection
- avoidable non-value added - pure waste = eliminate and reduce immediate
value stream perspective
- raw material moving to a finished product that customer receives value
- value added
- necessary non value added
- won’t change form but is necessary - avoidable non value added
- eliminate and reduce immediately
7 wastes to be eliminated
avoidable non value activities
- over production
- waiting
- unnecessary motions
- unnecessary transport
- overprocessing
- unnecessary inventory
- defects
overproduction
make too much too early due to uncertain demand/production or push system
root causes of other wastes
examples of overproduction
- raw materials/energy/water = consumed in unnecessary products
- extra products = obsolete = disposal
- extra hazardous = emissions= disposal which means risk of injury
- noise deriving from unnecessary products
reducing overproduction
o Use pull system (make only what customer needs)
o Reduce the uncertainty
o Increase the process quality
o Increase the reliability of machines
push systems
produce according to a schedule/plan based on forecast
○ Forecast -> Plan -> Production -> Inventory
- End up like a lot of inventory accumulated
E.g. fast fashion use this and food industry (% of doing push is more)
pull systems
produce on request
○ Request -> Production -> customer
§ Customer requests
§ Just in time
§ Aim to eliminate over production
E.g. car manufacturing
waiting
idle people/machines create unused capacity due to lack of customer orders or unexpected/unplanned breakdowns
examples of waiting
- Potential material spoilage or component damage causes physical waste and need for disposal
- Wasted energy from heating, cooling and lighting during production downtimes
how to reduce waiting
- Plan better the connecting processes
- Update resource allocation based on demands
unnecessary motions
unnecessary movement of production-related employees created by inappropriate process design or inefficiencies
examples of unnecessary motions
○ More packaging required to protect components during movement
Higher risk of accidents and injuries to employees during movement
how to reduce unnecessary motions
- Workplace process and layout design
- Redesign internal factory flows
Ergonomics in workplace design
unnecessary transport
can be found within the production plant or between different sites (customers don’t want to pay this cost)
examples of waste of unnecessary transport
- More energy and emissions from transport
- Damage and spills during transport
- More packaging required to protect components
- Higher risk of accidents and injuries to employees during transport
how to reduce unnecessary transport
- Appropriate layout/distance
- Advanced material handling systems
overprocessing
design, material, production steps beyond what are needed - functions or performance features that customers have not requested and are not willing to pay for
examples of over processing
○ More energy and water used in unnecessary processing
○ More emissions, noise & land contamination
More parts and raw materials used to enrich product with unnecessary features and functions
how to reduce over processing
○ Change to appropriate process
Design for manufacturing
unnecessary inventory
stored products cant be used because no demand, often case for production based on push system
Reduce inventory level so that it can expose issues of the supply chain
examples of unnecessary inventory
○ More packaging to store works in progress
○ Waste from deterioration or damage to store works in progress
○ More energy - heating, cooling/lighting of inventory space
Increased land usage - need for bigger warehouse/factories
how to reduce unnecessary inventory
- use pull system = make only what customer needs
defects
products that dont comply with design requirements generate waste as cant fulfil needs, often scrapped or reworked
examples of defects
○ Scraps can require disposal of physical waste
○ Defective products may require reworking, resulting in the same problems as overproduction
○ More raw materials, energy and water consumed in making defective products
○ Extra-hazardous materials embedded in defective products result in extra emissions,
○ waste disposal, land contamination and workers’ exposure to risk of injury
Noise deriving from the production of defective products affects the local community and employees
how to reduce defects ?
improve quality management and monitoring system
check product design
process to mitigate supply chain risk
5 stages
- identify risk
- assess and evaluate risks
- choose appropriate risk management strategies
- implement risk management strategies
- mitigate risk and further identify risk
failure mode and effects analysis (FMEA)
○ Created in the US Defense Department in 1949, and applied by the NASA for the Apollo plan to enhance system reliability in the 1960s
○ Analytical tool to identify, assess, and evaluate possible failures / risks of a process / product / service
○ Once the possible “failure modes” have been identified, the “effects analysis” kicks in and studies the potential consequences of those failures, which are ranked by
* Seriousness / criticality to the customer
* Probability of the fault’s occurrence
Probability of the fault’s detection by the systems responsible for defect prevention or detection
risk assessment factors
- severity - of potential failure mode’s effect
(1 = no effect 10 = max) - likelihood of occurrence - likelihood of failure modes occurence )1 = unlikely, 10 = almost certain)
- probability of detection - how unlikely it is that fault will be detected by system (1 = near certain, 10 = impossible to detect)
developing FMEA document
- define failure modes - deviation from expected lvl
- determine the effects and severity ranking (impacts of the effects)
- determine the causes and likelihood rankings (chance for the causes to happen)
- identify possible control schemes and assign detection rankings
rankings for FMEA
9-10 = delay expected, 8 or more weeks late, no signs for lateness
1 = delays not likely to happen, within 2 days, noticeable before taking alternative shipments without extra cost and delay
risk priority number
severity x likelihood of occurrence x probability of detection
1 = virtually no risk
1000 = extreme risk
when do we use FMEA
- During the design or redesign of a process, product, or service
- When improvements are needed or planned for existing processes, products, or services
- When existing processes, products, or services are to be used in a new way
- During after-the-fact failure analysis
- When safety or health is an issue
the resilient supply chain
resilience = bounce back
- supply chain re engineering
- supply chain collaboration
- supply chain risk management culture
- agility
supply chain re-engineering
supply chain design
supply chain understanding
supply base strategy
supply chain collaboration
supply chain intelligence
collaborative planning
supply chain risk management culture
supply chain continuity teams
board level responsibility and leadership
consider risk in decision making
agility
velocity
visibility
advantages of collaboration in supply chains
○ Greater info flow
○ Reduced inventory at all linkages in the supply chain
○ Effective use of resources and subsequent reduction of costs
○ Reduced lead times driven by accurate demand data
○ Increased speed to market and responsiveness
○ Service-level gains (delivery in full, on time and in specification)
○ Trained and educated purchasing employees and suppliers can function to support
collaboration
○ Encouragement of transparency
- Info sharing can do more collaborative planning for whole supply chain
- Collaboration = break the bottle necks and the waiting times e.g. no vehicles available to deliver products but they have been made
○ Supporting effects of monitoring, evaluation, reporting and sanctions
○ Ability to identify and evaluate potential complementarities
○ Lower transaction costs – employment of informal relationship governance over formal to
create long-term, trusting relationships
Increased supply chain resilience to disruption risks
hurdles to collaboration in supply chains
○ Need for resource allocation to supply chain management often coincides with higher costs. Ineffective allocation of resources, poorly designed processes and unrealistic time limits waste time, creating time constraints that require too much effort to manage. The need for resource allocation to supply chain management becomes a heavy burden on smaller organisations and reinforces the need to choose partners carefully
○ Greater coordination effort and complexity
○ Need to change old mindsets based on confrontation
○ Missing or incorrect communication in the supply chain, including the use of non-
standardised formats for communication
○ Significant legal, strategic and operational barriers in terms of engaging supply chain partners
in collective climate change responses
○ Free-rider behaviour
○ Information can be a source of competitive advantage – free sharing may undermine this
○ Property rights – risk of imitation
Information leakages to rivals
SERVQUAL
tool to assess customer perceptions of services quality
○ Developed by Parasuraman, A., Zeithamel, V., and Berry, L. (1988)
○ Survey-based tool
Assess the gap in customer expectations and customer perceptions
advantages of SERVQUAL
○ A standard for assessing different dimensions of services quality(standardised tool)
○ Valid for a number of service situations
○ Reliable – different readers interpret the questions similarly
○ Each instrument has only 22 items which can be filled out quickly by customers and employees
A standardised analysis procedure to aid both interpretation and results
service quality dimensions
tangibles - physical appearance
service reliability - ability of service provider to perform promised service (dependable and accurate)
responsiveness - willingness of service = to be helpful and prompt
assurance - knowledge and courtesy of employees and ability to inspire trust and confidence
empathy - customer desires attention from firm
SEVQUAL 2 dimensional differencing
· Used if there is enough variation in response given to different dimensions
Used by company to determine which services it should emphasise to improve customer perceptions and those that make little difference
