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OPERATIONS MANAGEMENT

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OPERATIONS MANAGEMENT Value Analysis

Value Analysis
How to get more from less is the gist of Value Analysis

(improve product properties) Materials Accelerate Production Reduce scrap Reduce cost

Processes

Value Analysis
Objective :

Improve the qualities of a product, while maintaining or reducing its costs Process : > To find precisely the qualities/specification the product is supposed to possess and why? > Compare these with materials and production operations, to relate materials and operations responsible for each of the required characteristics > To reveal material qualities that are not exploited or operations that seem duplicating or unnecessary. > By critically examining and analysing the value of materials and processes, new and efficient methods/materials may be explored

Value Analysis
Need for Value Analysis: > Designers reluctant to change techniques that have been repeatedly used with success Reasons, - due to ignorance, lack of experience in diversified methods of manufacture - Anxieties and uncertainties with change - Installation of new methods/materials, accompanied by unforeseeable difficulties, people have to adjust, lack of confidence,

Value Analysis
Value analysis tests: - Does its use contribute value? - Is its cost proportionate to its usefulness? - Does it need all its features? - Is there anything better for the intended use? - Can a usable part be made by a lower cost method? - Is it made on proper tooling, considering quantities used? - Do materilas, reasonable labour, overhead, and profit total its cost? - Will another dependable supplier provide it for less? - Is anything buying it for less?

OPERATIONS MANAGEMENT
Quality Control

QUALITY CONTROL
Quality : The development & realisation of specification necessary to produce economically and in adequate degree, the appearance, efficiency, interchangeability and life , which ensures the products present and future markets. It is the total of features of a product or service that bear on its ability to satisfy the stated or implied needs; > Actual & perceived

QUALITY CONTROL
Functions : To satisfy the customer by endeavouring to comply with the declared specs of the Product To ensure that the work may proceed to the next operation To be instructive, so that recurrence of mistake could be eliminated To compare quality levels obtained with desirable level process control for determination of trends & process adjustment procedures. To determine the optional quality obtainable for available process and to provide useful guides for specifications at Design stage. To minimise scrap to an economical level. To facilitate process of incentive payments. To be able to identify faulty outputs with operations. To evaluate existing inspection methods & design better/more effective procedure.

QUALITY CONTROL
Quality Objectives: Definable: - Physical dimensions - Physical & Chemical properties of materials strength, weight, composition etc. For which: - Design comparatively simple and quick testing techniques with which these attributes can be measured - Define good & bad acceptable and non acceptable

QUALITY CONTROL
Quality Objectives: Not Definable: - Brightness, whiteness - Surface textures - Smell etc. These are subjective and in some cases can be measured indirectly , eg light, surface finish etc.

QUALITY CONTROL
Total Quality Management: > To excel on all dimensions of products & services that are important to the customers. > Quality must be ensured in all the areas: > Marketing, design, purchase, production or operations & distribution

QUALITY CONTROL
Fundamental Goals:
- Careful design of the product or service - Ensure the systems consistently produce the design specs/features

Quality of Design:
- Incorporates features & attributes that satisfy customer needs/expectations. - Design quality is a major contributor for the value of the product in the market. Most important feature of design with regard to quality is specification. - Describes in a comprehensive statement of all its aspects which are needed to fulfil the requirements. - The maximum tolerable variation in the requirement/attribute should be defined.

QUALITY CONTROL
Dimensions of design quality are:
> Performance , Primary operating characteristics > Features , Influence perception of the customers > Reliability, Failures within the specified time period > Durability, Life of the Product > Serviceability, ease with which product can be repaired/availability of standard spares etc. > Response, Speed to solve customers problems > Aesthetics, to satisfy sensory needs- sound, look, feel, aroma, colour etc. > Reputation, past performance, other intangibles

QUALITY CONTROL
Service Quality:
> Timeliness > Completeness

> Courtesy
> Consistency > Accessibility and convenience

QUALITY CONTROL
Cost of Quality: Product to be made Right, the first time, every time > To avoid defectives rather than repairing or replacements > With an aim to prevent any additional costs Costs associated with Quality: > Failure Costs > Prevention Costs

QUALITY CONTROL
Failure Costs:
Relate to production below the quality standard, resulting into, > Scrapping defective items > Reworking defective items > Re-inspecting > Downgrading as seconds > Wastage costs holding etc. > Repairing and servicing after sales > Warranty claims > Complaints from customers > Returned Products > Liabilities/litigations > Loss of Goodwill > Non payments/bad debts

QUALITY CONTROL
Prevention Costs:
Costs associated with design, implementation and maintenance of quality system, to ensure right, first time. These include: > Product or Service requirements Determination of Quality requirements and laying down specifications of incoming materials, processes, intermediateries and finished products and services.
> Quality Planning & Assurance Creating systems & procedures to ensure quality > Appraisal Equipment- Costs of designing and procuring instruments, tools and accessories required to carry out quality appraisals.

> Training Development, preparation and conduct of Quality training programmes for Operators, supervisors and managers.

QUALITY CONTROL
Stages of Quality Control:
Inspection of incoming materials & bought out items > Sample Inspection > Process and Operation conditions at Vendors place to ensure that these confirm to methods agreed upon. Inspection of failures First of Inspection

Inspection by self control


Final inspection Post Sales Quality Evaluation/audit

QUALITY CONTROL
Acceptance Sampling:
> Decisions based on comparatively small samples > Helps saving costs/time/monotony > Inspection with great care & reliable > Involves risks, as sample taken is at Random and results may not be true reflections of the lot.

QUALITY CONTROL
Sampling Plan: Two major factors in acceptance sampling are: >Sample size > Sampling plan ( no. of successive samples taken in the process) Single Sampling Plan : > One Sample of certain numbers > Accept/Reject the lot Double Sampling Plan: > A sample is inspected & if defects below acceptable level Accept > If defects level high, but within a second acceptance limit, take another sample & if the results within acceptable limits for two lots combined Accept Multiple or Sequential Sampling plan: > Similar to double sampling > Repeated till decision comes out

QUALITY CONTROL
Control Charts in SQC:
X bar & R Chart for process control: To establish whether process is under Statistical Control, in which case variation is attributed to chance. Guides whether process capability is compatible with the specifications Detects trends in the process, to help assist planning adjustments To show when the process is out of control & make efforts to trace the causes.

QUALITY CONTROL
Procedure: Take a number of sample of components coming out of the process over a period of time, each sample of units at random. X bar = Average value of all measurements of a sample R = Range ( highest lowest reading) X double bar= Grand average R bar = Average of all R X bar chart UCL Xbar= X double bar+A2 R LCL X bar= X double bar A2R R Chart UCL R= D4Rbar LCL R = D3Rbar

Statistical Quality Control assumes normal distribution As long as X bar and R values for each sample are within the limits, the process is said to be in Statistical Control.

QUALITY CONTROL
p- Chart: - Fraction defective chart to control general quality of product & to ascertain whether fluctuations are due to chance alone. - Through determining Control Limits - Whereas X bar & R charts are for measurable attributes/dimensions, p chart is for % defectives, irrespective of causes of defects Go/No Go Control Limits: UCL p = p + 3 sigma p LCL p = p 3 sigma p P is the desirable ratio Sigma p is the standard deviation of the desirable ratio

QUALITY CONTROL
C - Chart: - For control of number of defects observed per unit - In this case control limits are based on Poisson Distribution, which is often considered desirable to describe distribution of defects Control Limits: UCL c = c + 3 sq. root c LCL c = c 3sq.root c c = desirable level of number of defects/unit sq.root c= standard deviation

QUALITY CONTROL
Statistical Method of process control attempts to distinguish between the two sources of variability:
> Inherent process variability > Additional external causes that result in consistent trends or shifts of mean value of measured attribute. The process is under Statistical Control, if the variability is confined to the inherent process variations.

Cost of Quality
Product to be made Right, the first time, every time To avoid defectives rather than repairing or replacements With an aim to prevent any additional costs Costs associated with Quality: Failure Costs Prevention Costs

Prevention Costs
Costs associated with design, implementation and maintenance of quality system, to ensure right, first time. These include: Product or Service requirements Determination of Quality requirements and laying down specifications of incoming materials, processes, intermediateries and finished products and services. Quality Planning & Assurance Creating systems & procedures to ensure quality Appraisal Equipment- Costs of designing and procuring instruments, tools and accessories required to carry out quality appraisals. Training Development, preparation and conduct of Quality training programmes for Operators, supervisors and managers.

Quality Control
Relationship between Costs of Quality and Organisational capability

Statistical Quality Control


Normal Curve

Tools for identifying Quality Problems & Causes:


Check sheet Appearance of common defects No. Of occurrences Histogram Frequency of data related to a quality problem Pareto Analysis % of defects occurring due to different causes to identify major quality problems Flow Chart Shows steps in process & identify where the problem may exist Scatter Diagram Graph shows relationship between two variables to help identify patterns that may cause quality problems Statistical Quality Control Charts Statistical UCL & LCL Cause & Effect Diagram ( Herring Bone): Represents causes & effects

Statistical Quality Control


Histogram- indicates frequency of data related to a quality problem

Statistical Quality Control


Pareto Analysis Chart- percentage of defects occurring due to different causes

Statistical Quality Control


Flow chart Diagram showing steps in a process which helps identifying the stage where problem exists

Statistical Quality Control


Scatter Diagram A graph showing relationship between the two variables in a process to identify patterns that may cause quality problems

Statistical Quality Control


Cause and Effect Relationship:
In this case we try to diagrammatically establish relationships between possible causes and their effects and work out solutions to limit the causes to an extent that the effects do not bring the item beyond acceptable tolerances .

Plant Maintenance
A key to successful execution of plans for production in any organisation

Plant Maintenance
Objectives: > Maximisation of the performance of production facilities production capacity > Minimise loss or inconvenience caused by unavoidable breakdowns > Improve reliability of equipment > Maximise useful life of the equipment > To keep equipment safe and prevent the development of safety hazards

Plant Maintenance
Maintenance policies:
Maintenance of facilities and equipment in good working order is essential to achieve specified levels of quality and reliability and efficient working- the best equipment will not work satisfactorily unless it is cared for. The cost of the breakdown in the system can be very high: - Financial terms - Poor morale - Customers dissatisfaction

Plant Maintenance
Main causes of failure:
Weakness under normal stress of use, the product may fail due to:
- Poor design

- Materials - Workmanship

Misuse under application of stress outside the usual capability of the product or service system

Plant Maintenance
Types of Failures :
Total failure: Complete lack of ability of the product or service to perform the required functions. Partial failure: Service not as well as expected Gradual failure: Progressively over a period of time & perhaps could be anticipated by some kind of examination. Sudden failure: Occurs quickly and is not easily predictable.

Plant Maintenance
Time of failure: Maintenance work carried out before failure is preventive maintenance. Preventive maintenance l Breakdown maintenance Failure l..Time A systematic preventive maintenance plan can reduce breakdown & hence delay the time of failures

Plant Maintenance
Preventive maintenance:
- Attempts to eliminate or reduce chances of failures by servicing (clearing, replacing, lubricating, checking etc.) facilities at pre planned intervals > Engine of an aircraft after certain flying hours. - Preventive maintenance is planned in one of the following ways: Time based: Doing maintenance at regular intervals. Work based: after set numbers of operating hours e.g. Flying hours, no. of copies

Plant Maintenance
Opportunity based: - when equipment is available, holiday ( closure) - Though can extend the maintenance cycle to an unacceptable level Condition based: - Relies on planned inspection to reveal when maintenance is prudent. - Replacement of break liner when thickness is reduced to say 2mm.

Plant Maintenance
Breakdown Maintenance:
- To carry out maintenance when equipment fails: - TV, Bathroom fittings, telephone

Plant Maintenance
Maintenance Cost Balance: - Most operations plan their maintenance to include a level of regular preventive maintenance which gives a reasonably low but finite chance of breakdowns. - More frequent the preventive measures, the less probability of breakdowns. - The balance between preventive and breakdown maintenance the total cost of breakdown infrequent preventive maintenance will cost less but likely to result in more frequent breakdowns and hence more cost of breakdowns.

Plant Maintenance
- Frequent preventive maintenance will increase cost but will reduce of having to provide breakdown maintenance - An optimal level of preventive maintenance is planned to minimize total cost. - To workout preventive maintenance policy for optimum cost, we need to have data concerning breakdowns.

Plant Maintenance
Total Productive Maintenance:
- Improve equipment effectiveness - Achieve autonomous maintenance; - People take responsibilities for the improvement of maintenance performance at - Repair level - Prevention level - Improvement level

Plant Maintenance
Total Productive Maintenance:
- Planned Maintenance:
Have a completely planned maintenance routine, with level of preventive maintenance for each equipment, the standards for condition based maintenance and the responsibilities of operating & maintenance staff are included. Maintenance Staff Operating Staff Roles To develop To take on - preventive actions - ownership of facilities - breakdown actions - care of facilities Responsibilities - Train operators - Correct action - Device maintenance - Routine preventive maintenance practice - Problem solving - Routine condition based maintenance - Assess operating practice

Plant Maintenance
Total Productive Maintenance:
- Training of staff in relevant maintenance skills. - Achieve early equipment management. > Maintenance prevention traces all potential problems back to their route cause, tries to eliminate at that point

Plant Maintenance
Predictive maintenance:
- Through experience and plant preventive maintenance, it is generally possible to predict failures/breakdowns and take actions to avoid before breakdown occurs, > Costly > Reduces down time

Plant Maintenance
Maintenance staff:
- Highly skilled - Dedicated with 24/7 availability - Teamwork