Amirul Bin Abd Rashid

Faculty of Mechanical Engineering,

University Teknologi MARA.

9/13/2012

High Productivity High Quality

Production Flow

Managing

Inventory

QC

KJP 636 ( NY-2009)

Managing

Vs SPC

Human Resource Management System in A

World Class Business
Total Preventive Maintenance
Managing External Supply Chain

JIT Small Batch Delivery

2

9/13/2012

2
KJP 636 (
NY-2009)

9/13/2012

Exceptional productivity performance

KJP 636 ( NY-2009)

According Andersen a world class and nonworld class manufacturers in terms of output
per employee is at 2:1 productivity ratio.
Greater advantage in Quality. As reported by
the Arthur & Andersen, the world class plants
in each product area show superiority across
several performance measures-productivity,
internal and external quality, and space
utilisation. (1994)
3

9/13/2012

KJP 636 (
NY-2009)

2)

3)

KJP 636 ( NY-2009)

1)

9/13/2012

Improve labour productivity - reducing travel times

Schonberger (1986)-Importance of cutting flow
times, changeover times & distance from start to
finish
Shingeo Shingo (1988): SMED
Monden (1983): Outlines three factors in the
Shojinka concept:
Proper design of the layout of machinery.
A versatile and well trained workforce which can undertake
multi-function tasks.
A continuous re-evaluation and revision of standard
operations and routines.

The concept of Shojinka is used to describe the way the shop

floor processes are adapted to meet changes in demand.
4

9/13/2012

KJP 636 (
NY-2009)

Figure 5-1: Factors needed to realise Shojinka

[Source: Toyota Production System (Monden), p. 101]
SHOJINKA
Attaining flexibility in the number of workers
at each shop to adapt to demand changes

Shoninka
Reduction of the
number of workers
at a shop

Widening or narrowing
the range of jobs for
each worker

Layout of
combined
U-form lines

Revisions of
standard operations
routine sheet

Multi-functioned
worker

Job rotation

Improvements of
the process

Manual
operation
improvements

9/13/2012

Machine
improvements
(Jidoka)

KJP 636 (
NY-2009)

Figure 5-2: U-Form Layout

Machine
entrance
1

10

exit

At Toyota, layout for Shojinka requires that materials flow

within U-Shaped configurations
6

9/13/2012

KJP 636 (
NY-2009)

[Source: Figures below extracted and edited from Toyota Production

System (Monden), pages: 106 & 107]
3

Part C

7
17

16

15

14

Part A

13

12

11

10

Part B

Part D

Part F

Part E

Machines

4
5

Figure 5-3: Combined line layout for making six parts

Figure 5-3: Combined Line Layout for making six parts

9/13/2012

KJP 636 (
NY-2009)

In Figure 5-3 in which there are six different

lines making different parts. Suppose the
demand for products in January was such that
the cycle time for this combined process was
one per minute.
Under this cycle time, eight persons are
working in this process (Figure 5-4) and the
walking route for each person is described by
direction of the arrow.

9/13/2012

KJP 636 (
NY-2009)

Machines

4
5

Figure 5-3: Combined

line layoutTO
for making
six partsSHOJINKA
Figure 5-4: COMBINED
LAYOUT
REALISE

[Source: Toyota Production System (Monden), p.106&107]

2
7

17

16

15

14

13
12

11

10

6
8

6
7

1
8

January
Cycle time: 1 min. per unit
Number of workers: 8 persons

Walking route of each worker

Figure 5-4: Allocation of workers within layout time period 1

Figure 5-4: Allocation of Workers Within Layout Time Period 1

9/13/2012

KJP 636 (
NY-2009)

 However when the demand in February is depressed

the process cycle time is then increased to 1.2 minutes
per unit. Operations of the combined line are then
reallocated among workers, and each worker is now
required to undertake more operations than in that
particular period.
Figure 5-5 shows the result of expanding the walking
route of each worker is that one of the workers can be
omitted from this combined line. Thus, under this
combined layout capacity adjustments can be allowed
for by increasing or reducing the cycle time or
reducing or increasing the labour content in the
product.
10

9/13/2012

KJP 636 (
NY-2009)

Cycle time: 1 min. per unit

Number of workers: 8 persons

Walking route of each worker

Figure 5-5:Figure
COMBINED
TOlayout
REALISE
5-4: AllocationLAYOUT
of workers within
time periodSHOJINKA
1
[Source: Toyota Production System (Monden), p. 106&107]

2
7

17

16

15

14

13

12

1
11

10

1
9

6
5

5
1
2
3

1
8

February
Cycle time: 1.2 min. per unit
Number of workers: 6 persons
Walking route of each worker

4
5

Figure 5-5: Allocation of workers within layout time period 2

Figure 5-5: Allocation of Workers Within Layout Time Period

11

9/13/2012

KJP 636 (
NY-2009)

12

9/13/2012

NY-2009)

KJP 636 ( NY-2009)

inventory is important as huge

amounts of money that can be tied up in
inventory.
The inventory holding costs also called
carrying costs, may include costs paid for
storage space, interest paid on borrowed
money to finance inventory, and any losses
incurred due to damage or obsolescence.
Thus, the understanding of the economic
order quantity (EOQ) model is crucial in an
attempt to minimize total annual costs by
varying the order quantity, or lot size.
KJP 636 (

9/13/2012

Reduced

12

9/13/2012

Figure 5-6: Economic Order Quantity (EOQ) Model

KJP 636 ( NY-2009)

Total Costs

Holding Costs

Annual
Costs

Ordering Costs

13

EOQ

Order Quantity
13

9/13/2012

KJP 636 (
NY-2009)

14

9/13/2012

NY-2009)

KJP 636 ( NY-2009)

5-6 shows that the ordering costs fall

as order quantity increases, because, with a
given annual demand, the number of orders
which have to be placed each year is
reduced.
However the Holding costs will rise
because the average stock held is
increased.
Total relevant costs (holding costs +
ordering costs) are at a minimum where
holding costs equal ordering costs, and this
determines the EOQ.
KJP 636 (

9/13/2012

Figure

14

EOQ can be worked out according to the formula:

2 XD XO

KJP 636 ( NY-2009)

EOQ =

9/13/2012

Where

D is annual demand (in units)

O is order cost (per order)
H is holding cost (per unit)

The above EOQ model is applicable to a single product or item

that is continuously reviewed and is based on these
assumptions:
1) The company knows the demand rate for the item, and it is
constant over time.
2) The company produces the item in lots or purchases it in
orders.
3) Each lot or order arrives in a single delivery.KJP 636 (
15

9/13/2012

NY-2009)

15

4)

6)
7)
8)

The company knows the lead time (time from ordering to

receipt), and it is constant.
The companys bases its inventory holding costs on
average inventory.
Ordering or set-up costs are constant.
The company satisfies all demands for the product (it allows
no back orders).
The company cannot obtain quantity discounts.

Traditional EOQ theory above demonstrates that the

shorter the production set-up time, the smaller the lot
size.
Smaller lot sizes provides for shorter process times, more
flexibility, a balanced production line and better quality.
16

9/13/2012

KJP 636 (
NY-2009)

KJP 636 ( NY-2009)

5)

9/13/2012

Continued..

16

 TQC

is also known as Total Quality

Management (TQM) is a management system
which incorporates technical skills at all levels
in an organisation. TQC means organized
Kaizen activities involving everyone in a
company - managers and workers- in a totally 17
systematic and integrated effort toward
636 (
improving performance at all level.KJP
NY-2009)
17

9/13/2012

KJP 636 ( NY-2009)

is an optimisation philosophy concerned

with continuous process improvements using
a collection of (statistical) tools for; data and
process analysis; making inferences about
process behaviour; and decision making

9/13/2012

SPC

18

9/13/2012

NY-2009)

KJP 636 ( NY-2009)

process control, is the

application of statistical principles to
reduce defects.
Is one of the seven elementary tools used
by first-line in Quality Circle activities at the
shop floor.
Emphasis is on continuous process
monitoring; the assumption is that a
process under control will yield acceptable
product.
Objective: Is the process is in control?
KJP 636 (

9/13/2012

Statistical

18

Control Charts for Variables: for

continuous measures such as
temperature, volume,
etc.
X
Mean

Chart (or

-Chart): detects shift of the

mean
Range

Chart (or R-Chart: detects change in

shape of distribution

Control Charts for Attributes: for discrete

measures such as number of complaints,
scratches, etc.
p-Chart:

measures percent defective

c-Chart:

measures # of defects per sample

19

9/13/2012

KJP 636 (
NY-2009)

X-Bar and R-Chart

DATE ..1-12-97....
PART # ...100-2010-001................... DESC. ........Shaft................ CHART .....O.D............
UCL - X ....10.... UCL - R ....1.0.... MEAN.... 7.5....
LCL - X ....5....... LCL - R ....0....
Time (hr.)
MEASUREMENT (mm)
X
R

R ....0.5.....

0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5
6.0 7.4 8.0 6.4 8.5 9.1 7.4 10.3 8.6 6.7 8.0 8.3 9.2
5.5 6.7 7.3 5.3 8.1 8.4 6.9 10.0 7.9 7.3 7.4 9.1 8.6
5.8 7.1 7.7 5.9 8.3 8.8 7.2 10.2 8.3 7.0 7.7 8.7 8.9
0.5 0.7 0.7 1.1 0.4 0.7 0.5 0.3 0.7 0.6 0.6 0.8 0.6

10
X

7.5
5
1.0

0.5
0
20

9/13/2012

KJP 636 (
NY-2009)

 New

attitude towards quality using Three

Philosophies
Continuous improvement KAIZEN
Involvement of everyone in the organization
Customer satisfaction

Expands

the traditional view of quality beyond

looking only at the quality of the final product
or service but to look at quality of every
aspect of the process

21

9/13/2012

KJP 636 (
NY-2009)

TQC Fundamental Program:

1)

2)

3)

4)

Creating a business philosophy that

encompasses all manufacturing,
engineering, marketing, and sales functions.
Creating a mind-set to approve only criteria
that provide better-than-acceptable quality.
Establishing a programme of continuous
improvement through good design and
cooperation.
Reliability and consistency in the delivered
product or service TQC helps to ensure that
design criteria of a product or service
satisfies the end-customer.
KJP 636 (
22

9/13/2012

NY-2009)

HRM system which privileges the use of teamworking and the delegation of responsibilities
among the employees.

The involvement of employees in suggestion

schemes and quality circles is an important
component of the human resources
management strategy for increasing
employee identification with the enterprise
and its strategic goals as well as improving
productivity, saving costs and increasing
competitiveness

Benefit administration module: would

track
KJP 636 (
NY-2009)
employees participation in benefits
program.
23

9/13/2012

Total Preventive Maintenance (TPM)

o

Preventive Maintenance is a pro-active

approach; reducing breakdowns through a
program of lubrication, adjustment, cleaning,
inspection, and replacement of worn parts.

Anticipatory maintenance systems, by

eliminating failure in advance, promotes
process stability and reliability in the long
run.

TPM places much of the responsibility for

maintenance on machine operators rather
than maintenance specialists. Unless
specified.
KJP 636 (
24

9/13/2012

NY-2009)

Managing the External Supply Chain

Supply chain management is the integration
of the activities that procure materials and
services, transform them into intermediate
goods and the final product, and deliver them
to customers
There are significant management issues in
controlling a supply chain involving many
independent organizations
Mutual agreement on goals
Trust
Compatible organizational cultures
25

9/13/2012

KJP 636 (
NY-2009)

Managing the External Supply Chain

Supply chains in a global environment
must be able to:
React

to sudden changes in parts availability,

distribution, or shipping channels, import
duties, and currency rates
Use the latest computer and transmission
technologies to schedule and manage the
shipment of parts in and finished products
out
Staff with local specialists who handle duties,
freight, customs and political issues
KJP 636 (
26

9/13/2012

NY-2009)

Benefits of Managing the Supply

Chain
Lower

inventories
Higher productivity
Greater alertness
Shorter lead times
Higher profits
Greater customer loyalty

27

9/13/2012

KJP 636 (
NY-2009)

Kanban
Kanban

is the Japanese word for card

(signal or visible record)
The card is an authorization for the next
container of material to be produced
A sequence of kanbans
pulls material through
the process
Many different sorts of
signals are used, but
the system is still called
a kanban
28

9/13/2012

KJP 636 (
NY-2009)

Kanban

User removes a
standard sized
container
Signal is seen by
the producing
department as
authorization to
replenish

Signal marker
on boxes
Part numbers
mark location
29

9/13/2012

KJP 636 (
NY-2009)

Just-In-Time (JIT)
o

o
o

o
o

A highly coordinated processing system in which

goods moving through the system, and services are
performed, just as they are needed.
JIT is a pull demand system
The ultimate goal of JIT is a balanced system
Achieves a smooth, rapid flow of materials through
the system
Powerful strategy for improving operations
Materials arrive where they are needed when they
are
needed
Identifying problems and driving out waste reduces
costs and variability and improves throughput
Requires a meaningful buyer-supplier relationship
30

9/13/2012

KJP 636 (
NY-2009)

o
o
o
o
o
o

o
o
o
o

Reduced inventory levels

High quality
Flexibility
Reduced lead times
Increased productivity
Increased equipment utilization
Reduced scrap and rework
Reduced space requirements
Reduced setup costs
Pressure for good vendor
relationships
31

9/13/2012

KJP 636 (
NY-2009)

o JIT is a philosophy of continuous and

forced problem solving via a focus on
throughput and reduced inventory
o TPS emphasizes continuous
improvement, respect for people, and
standard work practices
o Lean production supplies the
customer with their exact wants when
the customer wants it without waste
32

9/13/2012

KJP 636 (
NY-2009)