Operation Improvement Management

Please look at the attachments. Thanks

Homework on Operations Improvement (Due November

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1

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Directions: The assignment must be submitted a single Word document Please. Only one Word document is to be uploaded. Please upload on time (by November 21). Please look at the PowerPoint that I have attached it will help you for this homework.

Problem 1: Oregon fiber board makes roof liners for the automotive industry. The manufacturing manager is concerned about product quality. She suspects that one particular failure, tears in the fabric, is related to production-run size. An assistant gathers the following data from production records.

2000

3.8

1000

5.5

3000

4.2

1000

Run	Run size	Failures (%)
	1			10 00	3 . 5
			2	4 100		3. 8
	3		20 00		5.5
4	6 000	1. 9
	5	6800
	6		3000	3.2
	7
	8	12 00		4.2
	9	5000
	10	3800
11	6500	1.5
12
	13	7000
14	4.5
15	2200
16	18 00
17	5400
	18	5800
19	6.2
	20	1500

a. Create a scatter diagram for these data (Run size vs. Failure percent) (Use Excel to create and paste it here). (10)

b. Does there appear to be a relationship between run size and percent failures? If so, what type or relationship you see? What implications does this data have for Oregon Fiber Board’s business? (Answer here). (10)

Problem 2: UP Local (UPL) is a short-haul household furniture moving company. UPL’s labor force, selected from the local university’s soccer team, is temporary and part-time. UPL is concerned with recent complaints, as provided in the following table:

Complaint	Frequency
Broken glass
Delivered to wrong address
Furniture rubbed together on truck
Late delivery
Late arrival for pickup
Missing items	26
Scratches from rough handling
Soiled upholstery

a. Create a Pareto chart (Use Excel to draw and paste it here). (10) (Note: Please watch a YouTube video here:

if you forgot how to do it).

b. What percent of complaints are attributable to the two major causes? (answer here) (5)

c. The manager of UPL is trying to understand the root causes of complaints. He has identified following issues:

a. Truck broke down, ran out of packing boxes, no furniture pads, employee dropped several items, driver got lost, ramp into truck was bent, no packing tape, new employee doesn’t know how to pack, moving dolly has broken wheel.

Organize these causes using the four M’s method and draw a cause-and-effect diagram below (Fishbone diagram) (Use Visio or any tool to do and paste it here). Also show how you organized causes into categories. (15)

Problem 3: Draw a flow chart for a customer purchasing book on Amazon. You have to come up with your own steps and decision points. The chart must have at least five steps and two decision points. (Use Visio or any tool). You must include the steps and diagram below. (20)

Problem 4: A bottling plant samples 531 bottles to check for consistency of quality. It finds that 5 bottles had one or more defects and there were 12 defects in total. Four types of errors were observed.

a) Find proportion defective? Use three decimals for reporting. (10)

b) Find defects per unit? Use three decimals for reporting. (10)

c) Find defects per million opportunities (DPMO)? Use three decimals for reporting. (10)

Show all your work including formulas, number substitution, and answers.

· End of homework problems

Reference:

Krajewski et al. (2013). Operations Management, Pearson publishing.

Operations Improvement

BUS255

Goals
By the end of this chapter, you should know:
Importance of Operations improvement
Improvement Techniques
Broad approaches to improvement
Elements of Improvement

In ‘Alice’s adventures through the looking glass’, by Lewis Carroll, Alice encounters living chess pieces and, in particular, the ‘Red Queen’.
‘Well, in our country’, said Alice, still panting a little, ‘you’d generally get to somewhere else – if you ran very fast for a long time, as we’ve been doing’. ‘A slow sort of country!’ said the Queen. ‘Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!
The Red Queen effect

Think about examples!
Automotive sector
Telecommunications sector (cell phones)
Implications
Operations Improvement is necessary to retain competitive position
Greater operations improvements (comparatively) are necessary to improve competitive position

Improvement Techniques

Scatter Diagram
Scatter Diagram: A graph of the value of one variable vs. another variable
Absenteeism
Productivity

Scatter Diagram
Help us understand the relationship between variables (tool to generate ideas)
Remember, correlation doesn’t mean causation
X and Y have positive relationship doesn’t necessarily mean X causes Y.
Refer to in-class problem # 1

Flowchart
Flowchart (Process Diagram): A chart that describes the steps in a process. It is also called as process map.

Flow Chart
MRI Flowchart
Physician schedules MRI
Patient taken to MRI
Patient signs in
Patient is prepped
Technician carries out MRI
Technician inspects film
If unsatisfactory, repeat
Patient taken back to room
MRI read by radiologist
MRI report transferred to physician
Patient and physician discuss

10
20%
9

8
80%

1
2
3
4
5
6
7

Flow Chart
Flowcharts are vey useful in visually describing processes (tool to organize data)
Refer to in-class problem # 2
Let’s do it in Visio

Cause and Effect Diagram
Cause-and-Effect Diagram: A tool that identifies process elements (causes) that might effect an outcome. Also called Fishbone diagram or Ishikawa diagram.
Cause
Materials
Methods
Manpower
Machinery
Effect

Cause-and-Effect Diagram
Material
(ball)
Method
(shooting process)
Machine
(hoop &
backboard)

Manpower
(shooter)
Missed
free-throws
Rim alignment
Rim size
Backboard stability

Rim height
Follow-through
Hand position
Aiming point

Bend knees
Balance

Size of ball
Lopsidedness
Grain/Feel (grip)

Air pressure
Training
Conditioning
Motivation
Concentration

Consistency

Cause-and-Effect Diagram
Very helpful for performing root cause analysis. Can also identify areas where further data is needed (tool to generate ideas)
Most used categories: Machinery, Manpower, Materials, Methods, and Money
Other categories can also be used
Refer to in-class problem # 3

Pareto Chart
A graph to identify and plot problems or defects in descending order of frequency
Frequency
Percent
A B C D E

Pareto Charts
Number of occurrences
Room svc Check-in Pool hours Minibar Misc.
72% 16% 5% 4% 3%
12
4
3
2

54
– 100
– 93
– 88

– 72

70 –
60 –
50 –
40 –
30 –
20 –
10 –
0 –
Frequency (number)
Causes and percent of the total
Cumulative percent
Data for October

Pareto Chart
Pareto analysis is based on “relatively few causes” explaining the “majority of effects”
Helps differentiate between “vital few” issues and “trivial many”
A good tool to organize data
Let’s work on problem # 4 of in-class exercise

Four broad approaches to improvement

Total Quality Management (TQM)
Puts quality and improvement at the heart of everything that is done by an operation.
Meet the needs and expectations of customers
Improvement covers all aspects of a company
Improvement includes every person in a company
Getting things “right first time”
Develop the systems and procedures

Lean or Just-in-time (JIT) approach
An approach to meet demand instantaneously, with perfect quality, and no waste .
Customer-centricity
Internal customer-supplier relationships
Perfection is the goal
Synchronized flow
Reduce variation
Include all people
Waste elimination

Business Process Reengineering (BPR)
A radical approach to improvement that attempts to redesign operations along customer-focused processes rather than on the traditional functional basis.

BPR advocates reorganizing processes to reflect the natural processes that fulfill customer needs

Function 1
Customer needs fulfilled
Functionally-based processes

Function 2

Function 3

Function 4
Business processes

End-to-end process 1
End-to-end process 2
End-to-end process 3
Customer needs

Business Process Reengineering (BPR)

BPR advocates reorganizing processes to reflect the natural processes that fulfill customer needs
Before BPR

BPR advocates reorganizing processes to reflect the natural processes that fulfill customer needs
After BPR

Six Sigma
Two meanings
Statistical definition of a process that is 99.9997% capable, 3.4 defects per million opportunities (DPMO)
A program designed to reduce defects, lower costs, save time, and improve customer satisfaction
A comprehensive system for achieving and sustaining business success

Mean
Lower limits
Upper limits
3.4 defects/million

±6

2,700 defects/million
±3

Six Sigma Program
Originally developed by Motorola, adopted and enhanced by Honeywell and GE
Highly structured approach to process improvement
A strategy
A discipline – DMAIC
Let’s work on a problem
6

Strategy: Because it focuses on total customer satisfaction
Discipline: Because it follows DMAIC model of improvement
26

Six Sigma
Defines the project’s purpose, scope, and outputs, identifies the required process information keeping in mind the customer’s definition of quality
Measures the process and collects data
Analyzes the data ensuring
repeatability and reproducibility
Improves by modifying or
redesigning existing
processes and procedures
Controls the new process
to make sure performance
levels are maintained

DMAIC Approach

The ‘elements’ that are the building blocks of improvement include:

Radical or breakthrough improvement
Continuous improvement
Improvement cycles
A process perspective
End-to-end processes
Radical change
Evidence-based problem-solving
Customer-centricity
Systems and procedures
Reduce process variation
Synchronized flow
Emphasize education/training
Perfection is the goal
Waste identification
Include everybody
Develop internal customer–supplier relationships.
You are responsible for this slide. Please read in textbook from p. 84-90.
What are the key elements of operations improvement?

References
Slack, N., Chambers, S., & Johnston, R. (2010). Operations management. 6th ed. Pearson Education.
Heizer, J. H., & Render, B. (2014). Operations management (11th ed.). Pearson Education.

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