Supply Topic 3 (Supply Chain Quality Control)

Question 1

Lean thinking way

Answer 1

1. value - supplying to customer
2. waste - focus on elimination of waste

• improve the manufacturing processes of goods and provision of services

Question 2

3 reasons why you apply lean management

Answer 2

1. reduce efficiency
2. reducing waste generated in operations
   3.positively impacting supply chain performance

Question 3

what is value?

Answer 3

• activity that changes the form, fit or function of a product
• what the customer is willing to pay for

Question 4

value added activities (categories of activities along value stream)

Answer 4

1. value-added
2. necessary non-value added - won’t change form of product, but is necessary e.g. set up/inspection
3. avoidable non-value added - pure waste = eliminate and reduce immediate

Question 5

value stream perspective

Answer 5

• raw material moving to a finished product that customer receives value

1. value added
2. necessary non value added
   - won’t change form but is necessary
3. avoidable non value added
   - eliminate and reduce immediately

Question 6

7 wastes to be eliminated
avoidable non value activities

Answer 6

1. over production
2. waiting
3. unnecessary motions
4. unnecessary transport
5. overprocessing
6. unnecessary inventory
7. defects

Question 7

overproduction

Answer 7

make too much too early due to uncertain demand/production or push system

root causes of other wastes

Question 8

examples of overproduction

Answer 8

• 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

Question 9

reducing overproduction

Answer 9

o Use pull system (make only what customer needs)
o Reduce the uncertainty
o Increase the process quality
o Increase the reliability of machines

Question 10

push systems

Answer 10

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)

Question 11

pull systems

Answer 11

produce on request
○ Request -> Production -> customer
§ Customer requests
§ Just in time
§ Aim to eliminate over production
E.g. car manufacturing

Question 12

waiting

Answer 12

idle people/machines create unused capacity due to lack of customer orders or unexpected/unplanned breakdowns

Question 13

examples of waiting

Answer 13

• Potential material spoilage or component damage causes physical waste and need for disposal
• Wasted energy from heating, cooling and lighting during production downtimes

Question 14

how to reduce waiting

Answer 14

• Plan better the connecting processes
• Update resource allocation based on demands

Question 15

unnecessary motions

Answer 15

unnecessary movement of production-related employees created by inappropriate process design or inefficiencies

Question 16

examples of unnecessary motions

Answer 16

○ More packaging required to protect components during movement
Higher risk of accidents and injuries to employees during movement

Question 17

how to reduce unnecessary motions

Answer 17

• Workplace process and layout design
• Redesign internal factory flows
  Ergonomics in workplace design

Question 18

unnecessary transport

Answer 18

can be found within the production plant or between different sites (customers don’t want to pay this cost)

Question 19

examples of waste of unnecessary transport

Answer 19

• 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

Question 20

how to reduce unnecessary transport

Answer 20

• Appropriate layout/distance
• Advanced material handling systems

Question 21

overprocessing

Answer 21

design, material, production steps beyond what are needed - functions or performance features that customers have not requested and are not willing to pay for

Question 22

examples of over processing

Answer 22

○ 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

Question 23

how to reduce over processing

Answer 23

○ Change to appropriate process
Design for manufacturing

Question 24

unnecessary inventory

Answer 24

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

Question 25

examples of unnecessary inventory

Answer 25

○ 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

Question 26

how to reduce unnecessary inventory

Answer 26

- use pull system = make only what customer needs

Question 27

defects

Answer 27

products that dont comply with design requirements generate waste as cant fulfil needs, often scrapped or reworked

Question 28

examples of defects

Answer 28

○ 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

Question 29

how to reduce defects ?

Answer 29

improve quality management and monitoring system check product design

Question 30

process to mitigate supply chain risk 5 stages

Answer 30

1. identify risk 2. assess and evaluate risks 3. choose appropriate risk management strategies 4. implement risk management strategies 5. mitigate risk and further identify risk

Question 31

failure mode and effects analysis (FMEA)

Answer 31

○ 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

Question 32

risk assessment factors

Answer 32

1. severity - of potential failure mode's effect (1 = no effect 10 = max) 2. likelihood of occurrence - likelihood of failure modes occurence )1 = unlikely, 10 = almost certain) 3. probability of detection - how unlikely it is that fault will be detected by system (1 = near certain, 10 = impossible to detect)

Question 33

developing FMEA document

Answer 33

1. define failure modes - deviation from expected lvl 2. determine the effects and severity ranking (impacts of the effects) 3. determine the causes and likelihood rankings (chance for the causes to happen) 4. identify possible control schemes and assign detection rankings

Question 34

rankings for FMEA

Answer 34

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

Question 35

risk priority number

Answer 35

severity x likelihood of occurrence x probability of detection 1 = virtually no risk 1000 = extreme risk

Question 36

when do we use FMEA

Answer 36

1. During the design or redesign of a process, product, or service 2. When improvements are needed or planned for existing processes, products, or services 3. When existing processes, products, or services are to be used in a new way 4. During after-the-fact failure analysis 5. When safety or health is an issue

Question 37

the resilient supply chain

Answer 37

resilience = bounce back 1. supply chain re engineering 2. supply chain collaboration 3. supply chain risk management culture 4. agility

Question 38

supply chain re-engineering

Answer 38

supply chain design supply chain understanding supply base strategy

Question 39

supply chain collaboration

Answer 39

supply chain intelligence collaborative planning

Question 40

supply chain risk management culture

Answer 40

supply chain continuity teams board level responsibility and leadership consider risk in decision making

Question 41

agility

Answer 41

velocity visibility

Question 42

advantages of collaboration in supply chains

Answer 42

○ 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

Question 43

hurdles to collaboration in supply chains

Answer 43

○ 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

Question 44

SERVQUAL

Answer 44

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

Question 45

advantages of SERVQUAL

Answer 45

○ 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

Question 46

service quality dimensions

Answer 46

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

Question 47

SEVQUAL 2 dimensional differencing

Answer 47

· 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