• Leadership

• Strategic Planning

• Customer and Market Focus

• Information and Analysis

• Human Resource Focus

• Process Management

• Business Results

Malcolm Baldrige National Quality Award

Established 1987, Revised in 1999

Components of Quality• Design quality: Inherent value of the product in

the marketplace

– Dimensions include: Performance, Features, Reliability, Durability, Serviceability, Response, Aesthetics, and Reputation.

• Conformance quality: Degree to which the product or service design specifications are met

– Quality at the source: person who does the work takes responsibility for making sure the output meets specifications

Costs of Quality

External Failure Costs

Appraisal Costs

Prevention Costs

Internal FailureCosts

Costs ofQuality

Six Sigma Quality• A philosophy and set

of methods companies use to eliminate defects in their products and processes

• Seeks to reduce variation in the processes that lead to product defects

• The name, “six sigma” refers to the variation that exists within plus or minus six standard deviations of the process outputs

Six Sigma Quality: DMAIC Cycle (Cont.)

1. Define (D)

2. Measure (M)

3. Analyze (A)

4. Improve (I)

5. Control (C)

Customers and their priorities

Process and its performance

Causes of defects

Remove causes of defects

Maintain quality

Basic Causes of Variation• Assignable causes are factors that can be

clearly identified and possibly managed.

• Common causes are inherent to the production process. In order to reduce variation due to common causes, the process must be changed.

• Key: Determining which is which!

Types of ProcessesDesign

Source

Manufacture

Distribute

Fabricate Assemble

Time

ETOCustomer

Order

MTOCustomer

Order

ATOCustomer

Order

MTSCustomer

Order

Process Performance Metrics

• Throughput time = Average time for a unit to move through the entire system

• Cycle time = Average time between completion of units

• Throughput rate = 1 Cycle time

Process Performance Metrics (Continued)

• Little’s Law:

Throughput time = Work-in-process

Throughput rate

Process-Oriented Layout

• Design places departments with large flows of material or people together

• Dept. areas have similar processes– e.g., All x-ray machines in same area

• Used with process-focused processes• Examples

– Hospitals– Machine shops

© 1995 Corel Corp.

Process-Oriented Layout Floor Plan

OfficeOffice

Tool RoomTool Room

Drill PressesDrill Presses

Table SawsTable Saws

© 1995 Corel Corp.

© 1995 Corel Corp.

Product-Oriented Layout

• Facility organized around product• Design minimizes line imbalance

– Delay between work stations

• Types: Fabrication line; assembly line• Examples

– Auto assembly line– Brewery– Paper mfg. © 1984-1994 T/Maker Co.

Cellular Layout - Group Technology (Work Cells)

Cellular Layout - Group Technology (Work Cells)

• Special case of process-oriented layout• Consists of different machines brought

together to make a product• Group Technology Benefits:

– Better human relations – Improved operator expertise – Less in-process inventory and material

handling– Faster production setup

Work Cell Floor PlanWork Cell Floor Plan

OfficeOffice

Tool RoomTool RoomWork CellWork Cell

SawsSaws DrillsDrills

Station TimeLeft

Eligible Will Fit Assign-ment

IdleTime

A

C

B

D E F

GH

2

3.25

2

1.2 .5

11.4

1.1

Task Followers Time (Mins)A 6 2C 4 3.25D 3 1.2B 2 2E 2 0.5F 1 1.1G 1 1H 0 1.4

Example of Line Balancing:Step 5: Make assignments

I 4.2 A,C A,C A 2.2 B,C B B .2 G,C - - .2

II 4.2 G,C G,C C.95 D,G - - .95

III 4.2 D,G D,G D3.0 G,E G,E E

2.5 G,F G,F F 1.4 G G G .4 H - - .4

IV 4.2 H H H 2.8

Service Businesses

• Facilities-based services - customer goes to the facility

• Field-based services - facility goes to the customer

Internal Services

Internal Supplier

Internal Supplier

InternalCustomer

ExternalCustomer

The Service Triangle

TheCustomer

The ServiceStrategy

ThePeople

TheSystems

A B

E H

C

D

F G I10 Min.10 Min.

55

1111

1212

33 77 33

44

1111

ExampleBalance for 3 units/hour and compute theoretical min number of stations

(primary: longest task time; secondary: most followers)

Example of Line Balancing: Step 2: Determine Cycle Time

Required Cycle Time, C = Production time per period

Required output per period

mins/unit 20=units/hour 3

mins/hour 60 =C

Question: Suppose we only have demand for 3 units per hour. What would our cycle time have to be?

Answer:

Therefore, the maximum task time allowed in a single station is 20 minutes

Example of Line Balancing: Step 3: Determine Theoretical

Minimum Number of Workstations

Question: What is the theoretical minimum number of workstations for this problem?

Answer: Theoretical Min. Number of Workstations, N

N = Sum of task times (T)

Cycle time (C)

t

t

4or 3.3, =mins/unit 20

mins/unit 66 =N t

Example of Line Balancing: Step 4: Rules To Follow for

Loading Workstations• A number of simple rules have been proposed for

assigning tasks to work stations.

– Assign Tasks With The Most Following Tasks First

– Assign Tasks With the Longest Task Time First

• For this example, we’ll use

– Primary: Assign tasks in order of the longest operating time

– Secondary (tie-breaking): Assign tasks in order of the largest number of following tasks.

Example of Line Balancing:Step 5: Make assignments

A B

C

D

F

E

G

H

I

Task Task Time (minutes)

Followers

A 10 8

B 11 5

C 5 3

D 4 3

E 12 2

F 3 2

G 7 1

H 11 1

I 3 0

Workstation Time Left  Eligible Will Fit Assign Idle Time

I 2010

AB,E

A-

A-

10

II 208

B,EB,H

B,E-

E-

8

III 2094

B,HC,D,HD,H

B,HC,DD

BCD

-

IV 2096

F,HFG

F,HF-

HF-

6

V 2013

GI

GI

GI

10