Test 3 Flashcards
What is acceptance sampling?
Traditional approach to quality, assumes there is an ‘acceptable quality level’, uses sampling and probability to determine whether quality is acceptable or not, accept/reject entire lot based on sample results
What is the general lot acceptance sampling plan?
For a single sampling plan, use the following parameters:
N = lot size
n = sample size (random)
c = acceptance number
d = number of defective items in sample
If d<=c, accept lot; else reject
What is acceptance quality level (AQL)
Maximum percentage of defective parts in a batch for it to be considered definitely good, don’t reject any below this level
What is lot tolerance percent defective (LTPD)
Maximum fraction defective accepted in a lot, if the percent defective parts in a batch is higher than LTPD, we consider the batch definitely bad, do not accept batches above this level
What is the operating characteristic (OC) curve?
Plots the probabilities of accepting a lot versus the fraction defective, based on sampling plan and quality level of lot, indicates discriminating power of sampling plan and sampling risks, should always be examined before using a sampling plan
What is an average outgoing quality (AOQ) curve?
Shows how the quality of the outgoing material depends on the quality of the incoming material, expected number of defective items passed to customer, assumes rejected batches are screened and all defective parts are replaced with good parts
What is the average outgoing quality limit (AOQL)
The maximum point on the AOQ curve
Fill in the blank: As incoming defects increase, outgoing defect rates _______________
Decrease, this is because the entire incoming lot will be rejected more frequently
Fill in the blank: With the implementation of an AOQ curve, production should screen rejected lots with ______% inspection
100%, and all defective parts are replaced with good parts, thus these lots will have no defects and AOQL improves
What are the limitations of acceptance sampling?
Only works when defect rates are fairly high, gives no indication about sources of defects, provides no incentive to improve quality, considers a certain level of defects to be acceptable, not consistent with zero defects
What is autonomation?
“Automation with a human touch”. Here is the process:
- Machine or process stops automatically when problem occurs
- Human fixes immediate problem
- Humans investigate root cause and implements poka yoke
What is line-stop jidoka?
Practice of manually stopping an entire line when a problem occurs
What are andons?
Lights used to indicate a problem when a process or line is stopped, signals the location and severity of the problem:
Green: running normally
Yellow: stopped, problem being fixed
Red: stopped, need help
What are the requirements for levelling production schedules?
Continuous stable demand, short setup times, production = demand
Fill in the blank: When planning to level production, focus first on leveling the production of the ____-est volume products
Highest, only a few out of many products could account for over half of sales, these are the ones to concentrate on
What is a master production schedule?
Specifies the planned production of each item or product during each time period, time horizon is usually a few weeks
Fill in the blank: Pull production requires a schedule only for the __________ of production
Last stage, if the schedule is uniform, then flow will be smooth
What is final-assembly schedule (FAS)
The production schedule for products that require assembly
What is mixed-model production (MMP) or Heijunka
Producing several products on the same line, distributing the production of different product types evenly over the course of a day, week, or month
What are two things that are required to balance for MMP?
- The CT for each product at each workstation satisfies the required product CT (Takt time)
- The sequence assignment for each product is as efficient as possible
Fill in the blank: The ______ number of final products and the _____ the demand, the _________ it is to implement MMP
Fewer, larger, easier
What are the three different philosophies that companies may implement to meet demand under different circumstances regarding production planning/scheduling?
- Make to Stock (MTS)
- Assemble to Order (ATO)
- Make to Order (MTO)
What is Make to Stock (MTS)?
Make products in anticipation of demand (push production), small variety of end products, schedule end products that do not require a customer order first, products are assembled on the assumption that the customer will eventually require the product
What are the advantages and disadvantages of MTS
Advantages:
- Shortened lead times
- Repetitive manufacturing to produce batches similar goods with limited product features
Disadvantages:
- Require accurate product forecasting
- If demand does not equal supply, products may end up in inventory or sold at a loss
What is Assemble-to-Order (ATO)?
Subassemblies are assembled according to forecasts and then combined into unique combinations requested by clients (pull production kinda), large number of end-products assembled from small number of modules vs. Raw materials and parts, fewer subprocess required than Make to Order
What are the advantages/disadvantages of ATO?
Advantages:
- Reduces inventory needs, therefore lower capital costs
- Orders can be customized for the client
- Quick delivery times
Disadvantages:
- Lack of inventory that is ready to deliver to customers
- Longer waiting times than MTS
- Management of sub-assembly inventory
What is Make-to-Order (MTO)?
Unique products (low quantity) made from standard materials/parts, higher unit cost, requires customer order first (pull production), companies practicing MTO carry little inventory on hand
What are the advantages/disadvantages of MTO?
Advantages:
- Mass customization of products is possible
- Very little waste as manufacturer is responding to customer demands
Disadvantages:
- Longer lead times: products are manufactured on demand
- Increased manufacturing complexity due to the number of product options
- Product cost could be higher
What is backward scheduling?
A way to fully leverage the advantages of ATO and MTO, uses known info concerning manufacturing processes to generate production schedules given a desired delivery date
What is forward scheduling?
Involves fulfilling orders as soon as possible with the materials on hand, manufacturing performed at capacity with no allowance for additional orders, new orders are added to the queue as soon as they are processed
Fill in the blank: The ______ the quantity and the ______ the variety, the more ________ the demand and the ________ it is to schedule
Larger, smaller, stable, easier
Fill in the blank: When the number of final possible final products is large, a ____________ is used for production scheduling
Planning bill
Fill in the blank: In MTS, the number of ________ BOMs equals the number of available option ______________
Unique, combinations
Fill in the blank: In ATO, the number of BOMs equals the number of _____________
Options
What are some strategies for minimizing scheduling problems?
- Simplify the BOMs
- Use group technology and standard parts/modules
- Make only what is needed
- Produce in lot sizes that are small and easy to count
- Use simple visual control systems
- Do not overload the shop
- Use short lead times
What are the advantages of level scheduling?
- Batch production becomes repetitive
- Low inventories
- Flexible and responsive
- Simple to control (computers not needed!)
Who was Eli Goldratt
A physicist with no experience in manufacturing, but wrote a book on it called ‘the goal’ and other project management books, one of the originators of Optimized Production Technology (OPT)
What are the three constraints defined by Goldratt
Equipment (can limit ability to produce more goods), people (lack of skill and poor attitude), and policy (can prevent a system from earning more)
What are the five steps to address Goldratt constraints?
- Identify the system’s constraint(s)
- Decide how to exploit the system’s constraint(s)
- Subordinate everything else to the above decision(s)
- Mitigate the system’s constraint(s)
- If in the previous steps a constraint has been broken, revisit step 1
What is bottleneck scheduling?
Scheduling production around the capacity of bottleneck operations
Describe the Drum-Buffer-Rope (DBR) system
A technique to level production based on the theory of constraints, sets production CT based on bottleneck capacity, the phases are:
Drum - Sets the pace of the line
Buffer - Defines when to launch WIP into the system
Rope - Defines when to release work into the system
What are the common causes of variation?
Variation inherent in a process, can be eliminated only through improvements in the system
What are the special causes of variation?
Variation due to identifiable factors, can be modified through operator or management action
Fill in the blank: Control charts are used to monitor ___________
Processes
What is the general process for Statistical Process Control (SPC)
- Take periodic samples from processes
- Plot sample points on control chart
- Determine if process is within limits
- Identify quality problems so that corrective action can be taken
Describe attribute data vs variable data
Attribute data is product characteristics evaluated with a discrete choice (good/bad, yes/no). Variable data is product characteristics that can be measured (size, weight, time, etc.)
What are control limits
Guidelines concerning the variation of what can be expected from a given process from common variation causes, used to serve as a guideline of what to expect from a given, stable process, established based upon process data
How do you calculate upper/lower control limits
The process average plus/minus 3-sigma of process average, respectively
What is a P-chart
An attribute control chart that monitors the proportion of defective parts
What is a C-chart
An attribute control chart that monitors the number of defects in a unit
What defines a controlled or stable process?
- No sample points outside limits
- Most points near process average
- About equal # of points above & below centerline
- Points appear randomly distributed
- If process runs in a consistent/predictable manner
- If variation is uncontrolled, then process average or process variation or both are changing
What is the difference in sample size between attribute control charts and variable control charts
Attribute control charts have 50-100 parts in a sample, variable control charts have 2-10 parts in a sample
What is the difference in sample size between attribute control charts and variable control charts
Attribute control charts have 50-100 parts in a sample, variable control charts have 2-10 parts in a sample
What is process capability?
The range of natural variability in a process, measured with control charts, process cannot meet specs if natural variability exceeds tolerances
What’s the difference between control limits and specification limits?
Specification limits are set by the product or process requirements, product requirements = customer set, process requirements = internally set
Fill in the blank: If the inherent variation of a process is less than the specification limits, the process is ___________
Capable
True or False: CP always assumes a process is centred
True, if a process has bias then the defect rate will go up
True or False: Cpk estimates what the process is capable of producing, considering that the process mean may not be centered between the specification limits
True, Cpk < 0 indicates a process that is not producing between specified limits
What is DMAIC used for, what does it stand for, and what does each word mean?
Used to improve existing processes, stands for:
Define: What is the problem? Who are the customers? What are the CTQs? What is the scope, expectations, resources, deliverables? This info can give direction
Measure: What measures should be used? What is current performance (variation/trends)? What is the gap between current and desired performance? This establishes a performance baseline for improvement
Analyze: Analyze process using statistical and TQM tools (root cause analysis, cause and effect diagrams, pareto analysis, etc.)
Improve: Identify possible solutions, implement on experimental basis, measure results to see if improvement results, basically PDCA cycle
Control: Monitor and control performance using SPC, use kaizen to ensure performance continues to improve
What is DMADV used for, what does it stand for, and what does each word mean?
Used to design new products and processes, stands for:
Define: Define design problem and goals in terms of the customer, also known as constraints, could include features/cost/time to implement/etc.
Measure: Measure and identify critical customer requirements/product specifications/production process capabilities/etc., elements of GDT (significant versus major subjects)
Analyze: Develop and evaluate design alternatives to select the best one, “ideal number of parts in a system is what?”
Design: Detail design, including optimization, engineering validation, simulations, etc.
Verify: Verify the design through prototype testing, experiments, pilot plants, implement and test production processes
Fill in the Blank: Traditional manufacturing uses ________-based systems and ________ planning for production, scheduling, and inventory control activities
MRP, centralized
Fill in the Blank: JIT uses more ____________ planning
Decentralized
Define MRP
Material Requirements Planning, An information system used to plan the materials required to product the quantities and items specified in the master production schedule
Define Capacity Requirements Planning (CRP)
Computerized system that projects load from planned order releases, creates load profile, identifies underloads and overloads
What are some problems with MRP
- Material requirements plan is first; capacity is an afterthought
- MRP assumes lead times are fixed and known when they are actually load and schedule dependent
- MRP tends to lengthen lead times because they are estimated conservatively just to be safe
- MRP tends to increase inventory to be sure we don’t run out of parts due to scheduling uncertainty
- Transfer lots smaller than the batch size are discouraged but this strategy can significantly reduce WIP and lead time
- MRP encourages uneven flow of materials because it can calculate the appropriate time-phased schedules (in theory)
- Excessive reporting requirements
Explain post deduct or backflushing
Every time an item is completed, reduce the number on the production schedule by one. Reduce the inventory of all parts by the amount used
Describe the elements of lean accounting
Simple summary direct costing of the value streams, decision-making and reporting using a ‘box score’, financial reports that are timely and presented in “plain language” that everyone can understand, eliminating traditional budgeting through monthly sales/operations/financial planning processes (SOFP), value-based pricing, correct understanding of the financial impact of lean change
What are the three categories of lean performance measurements, their purpose, and frequency of these measurements
- Company or plan measurements (Purpose: enable senior managers of company monitor achievement of company strategy, frequency: monthly)
- Value streams measurements (purpose: track performance of value stream and provide info to drive CI, frequency: weekly)
- Cell and process measurements (purpose: enable cell team to monitor and control own activities, frequency: hourly or by shift)
List important company or plant performance measures
- sales growth
- return on sales
- on-time deliver
- sales per employee
- customer satisfaction
List important value-stream performance measures
- return on sales
- on-time delivery
- sales per employee
- dock-to-dock time
- first time through without scrap/rework
- schedule linearity
- capacity utilization
List the barriers to the implementation of Lean
- Lack of Understanding by Upper Management
- No Guidance Team Within Management
- Insufficient Leadership at Many Levels
- Lack of Customer Focus
- Making Lean a Workforce Reduction Mechanism
- Having a Short-Term View of Success, Focused Narrowly on Financials
- Having in Place a Financial Rewards System for Individuals That is not Supportive of Lean
- Unstable Process Flow
- Having a “Closed Culture”
- Tolerating Certain Levels of Irresponsibility
List some errors in rolling out lean strategies
- Proceeding Without a Factual Review of the Situation
- Picking a Mid-Level Manager Who is a Lean Advocate as the Implementation Leader (as in, someone who isn’t given authority or resources to do so, must be led by CEO -> top-down)
- Having a Staff-Led Transformation
- Believing that the Tools of Lean are at the Very Heart of Lean Implementation
- Planning the Implementation Across Multiple Value Streams or Across Multiple Plants
- Having no Plan, or a Poor Plan
List some traits of a healthy work culture
- Supports the short and long-term business needs
- Open and frank communication
- Address issues, not blame
- It must be strong, flexible, and appropriate to the field of business
List some traits of an unhealthy work culture
- Short term thinking, driven primarily by finances
- Culture of fear and blame
- Closed communication
- Subjective rules
- Inconsistent application of policy
- Employees are not consulted
- Employees are not valued. Employee well-being is not a priority
- Employee development is not a priority
How can culture be modified?
- The facility leadership must announce the change and communicate
- Teach the change (what are the intended outcomes of the change?)
- Model the Needed Behaviours
- Support the Needed Behaviours
- Reward the Behaviours
What are the five cultural change leading indicators?
- Is the leadership adequate to succeed?
- Is the motivation adequate to succeed?
- Are the necessary problem solvers present to succeed?
- Is the entire workforce engaged?
- Does a learning, teaching, and experimenting environment exist?
What is management’s responsibility within the culture of a TPS organization?
- Respect for people
- No layoffs
- If the company fails, it is because management has failed
- A culture of responsibility
- A culture of humility
- An awareness of human needs, system needs, and business needs
- Balance long- and short-term business needs
What are the employee’s responsibilities within the culture of a TPS organization?
- Jidoka (never passing anything but the highest quality product)
- Employee empowerment to make decisions
- Employees are trained, but expected to use this training
What are the four traits that lean leaders lead through (in order)?
- Competence
- Character
- Position
- Personality
What are the constraints as defined by Goldratt
Equipment: Equipment use can limit the ability to produce more goods and services
People: Lack of skilled people is a constraint as are attitudes that are also a constraint
Policy: Policies can prevent a system from earning more
What are the steps to address constraints?
- Identify system constraints
- Decide how to exploit system constraints
- Subordinate everything else to above decisions
- Mitigate the system’s constraints
- If in the previous steps a constraint has been broken, revisit step 1
What are some ways to achieve balance in a production line. List two strategies
Dynamic Balance: Dynamically allocate tasks to different workstations to equalize work (workers help each other)
Parallel Lines: Split lines into two parallel operations to reduce CT
What are the two control charts for variables?
- Mean chart (X-Bar chart): Uses average of a sample
- Range chart (R-Chart): Uses amount of dispersion in a sample
What are the reasons to make or reasons to buy a product?
Reasons to Make:
- Core competency
- Provides competitive edge
- Barriers to entry of competitors
- More control
Reasons to Buy:
- Not core competency
- Commodity components
- Suppliers have more expertise
- Less expensive
What are the upsides and downsides of relying on suppliers?
Upsides:
- Lower cost
- Flexibility
- Better quality
- More expertise
- Core competency
Downsides:
- Most quality and warranty problems are caused by suppliers
- To deal with unreliable suppliers, companies need to have multiple suppliers for every item
- In the past, companies dealt with this through vertical integration (everything in-house)
True or False: Supplier-customer relationships are trending more towards partnerships than traditional relationships
True
What is a CRP
Capacity Requirements Planning, A computerized system that projects load from planned order releases, creates a load profile, identifies underloads and overloads. The MRP system’s planned order releases, routing files, and open order files are inputs to this software, and the output is a load profile for each machine centre
What are the core elements of the traditional performance criteria?
- Standards and variances
- Direct labour productivity
- Overhead allocation and direct labour
- Machine utilization
- Lead time
Standards and variances are an element of a traditional performance criteria. What is it, what could it be used for, and what is a flaw with this metric in modern environments?
It defines standard costs and variances to these costs for all inputs and outputs.
It can be used to identify where costs are higher than expected and act upon them. As in, a “standard” cost for each item or activity is created to track direct and indirect costs. The actual costs to these standards is assessed, and these are the “variances”.
It encourages meeting standards regardless of demand or other factors.
Direct labour productivity is an element of a traditional performance criteria. What is it, what could it be used for, and what is a flaw with this metric in modern environments?
It measures how “busy” people. It does this by measuring the amount of real gross domestic product per hour of labour.
It could be used to determine the throughput of the shop floor.
It encourages the mindset of creating parts that aren’t needed than to have idle workers.
Overhead allocation and direct labour are elements of a traditional performance criteria. What are they, what could they be used for, and what flaws exist with these metrics in modern environments?
They help determine the cost of the parts (part cost = material cost + labour cost + overhead cost)
They could be used to determine how to reduce cost of products.
These metrics still put a high priority on reducing labour despite them making up a much smaller portion in modern environments when compared to overhead costs
Machine utilization is an element of a traditional performance criteria. What is it, what could it be used for, and what is a flaw with this metric in modern environments?
It is the proportion of time a machine is actually producing output
It can be used to determine if a machine is busy producing parts during the hours it can be used
It encourages the mindset of creating parts that aren’t needed, leading to excess inventory, longer lead times, and higher costs
Lead time is an element of a traditional performance criteria. What is it, what could it be used for, and what is a flaw with this metric in modern environments?
There are two definitions depending on the subject: Factory lead time and customer lead time. Factory lead time is the time from when a factory receives an order and ships the order. Customer lead time is the time from when a customer places an order and receives the product.
It can be used to determine how quickly a plant can meet demand.
The traditional mindset focuses more on the factory lead time, but what matters more now is customer lead time
Considering all traditional performance criteria measures, summarize the limitations that all of them share in three points.
- Emphasis on financial criteria (things that can’t be measured in dollars are ignored)
- Emphasis on system pieces (optimizing parts of a system doesn’t optimize system)
- Emphasis on short term results
JIT and TQM does not use the same productivity metrics as traditional businesses. What are the metrics that JIT/TQM uses in order to assess the performance of a business?
- Productivity
- Asset utilization
- Inventory
- Layout
- Equipment
- Quality
- Schedule
- Simplification
- Suppliers
Productivity is an element of the JIT/TQM performance criteria. What is it and what metrics make up this element of performance?
It determines the amount of value added work per employee, ignoring overhead costs.
Important metrics of this element of performance are:
- Total head count productivity (THP): measured in units/employee
- Units per payroll dollar (UPD)
- Value-added per employee (VAE): measured in dollars/employee
- Value-added per payroll dollar (VAP): measured as the ratio below
VAP = (Sales - Cost of materials, supplies, contracted work) / total payroll dollars
Asset utilization is an element of the JIT/TQM performance criteria. What is it and what metrics make up this element of performance?
It measures how effectively assets generate income
Important metrics of this element of performance are:
- Return on total assets (ROTA)
- Asset turnover (AT): measured using the following formula
AT = Net sales / Average total assets
Inventory is an element of the JIT/TQM performance criteria. What is it and what metrics make up this element of performance?
It determines how effectively any inventory is used/how quickly it is used up
Important metrics of this element of performance are:
- Days of inventory (DOI)
- WIP turns (typically per year): measured using the following formula
WIP turns = Cost of goods sold in period / Average inventory valuation
Layout is an element of the JIT/TQM performance criteria. What is it and what metrics make up this element of performance?
It determines how effectively the shop space is being used
Important metrics of this element of performance are:
- Assembly space per product (SPP): square feet/unit
- Storage space usage (SSU): fraction, less storage space used –> less inventory
- Damaged goods rate (DGR): fraction, less organization –> more chance of damage
- Distance per unit (DPU): measurement of material handling efficiency
Equipment is an element of the JIT/TQM performance criteria. What is it and what metrics make up this element of performance?
It determines how effectively equipment is being used
Important metrics of this element of performance are:
- Equipment availability: proportion of time machine is available to do work
- Overall equipment effectiveness (OEE): combines availability, efficiency, and quality
- Dollar utilization: units produced/dollar invested
- Reliability: failure rate (FR), mean time between failures (MTBF)
Some notes on this: Ideally, the machine runs continuously without stopping, breaking down, stoppages, etc. This is really only relevant for bottleneck machines in JIT/TQM, and encourages large batch sizes with infrequent setups. However, if you do have small batch production and frequent setups, OEE is actually reduced anyways
Quality is an element of the JIT/TQM performance criteria. What is it and what metrics make up this element of performance?
It determines the process-focused and customer-focused quality.
Important metrics of this element of performance are divided into two sections:
Process-focused Quality Metrics:
- Defect rate
- Scrap rate
- Process capabilities
Customer-focused Quality Metrics:
- Complaints
- Returns
- On-time deliveries
- Satisfaction
Schedule is an element of the JIT/TQM performance criteria. What is it and what metrics make up this element of performance?
It determines how effectively a business is designing and meeting its schedule
Important metrics of this element of performance are:
- Linearity index (L): measures how well actual schedule follows a level schedule
- Jobs/Units shipped on time (JSOT/USOT): fraction of total
Simplification is an element of the JIT/TQM performance criteria. What is it and what metrics make up this element of performance?
It determines the bloat within a business’s products and processes
Important metrics of this element of performance are:
- Total number of different parts
- Percent of nonstandard parts
- Number of steps and procedures in a process
Suppliers is an element of the JIT/TQM performance criteria. What is it and what metrics make up this element of performance?
It determines the quality a business’ supplier(s)
Important metrics of this element of performance are:
- Percent of late units/deliveries
- Delivery variability
- Percent defects
- Total number of suppliers
Considering all JIT/TQM performance criteria measures, summarize the limitations that all of them share in three points.
- Competitive focus (measures competitiveness instead of only fiscal performance)
- Emphasis on clear, commonsense measures (easy to understand and measure)
- Emphasis on trends and long-term improvement
