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8/9/2019 Productivity & Quality Management 2
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S Y BMS
4th Semester
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Productivity is the measure of the quantity ofoutput per unit of input.
Productivity =Amount of output
Amount of input
Workers productivity =Workers output
Number of man hours
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What is output?
2004 2005
No. of tyres producedLife of a tyre in km.
Price of a tyre in Rs.
16,00020,000
2,000
20,00015,000
1,600
Number of tyres productivity has shown a 25% increaseTyre-km output has gone down by 6.66%
On monetary terms its the same at 32 million
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Input in productivity i.e. the denominator can beviewed differently in different situations.
Productivity =Tonnes of metal produced
Units of power consumed
Productivity =Value of metal produced
Cost per units of power
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Input measurements can give different
pictures of productivity.
E.g labour input can be stated in numbers of
employees, or, number of man hours, or, cost
to company (wages).
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There are generally more than one factor of
inputs.
Land cost Salaries / wages
Overheads
Material cost When we measure productivity considering
only any one of these factors its called partialproductivity
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Total factor productivity is calculated through
a complex and systematic frame work
considering all the factors of production. Total Productivity = Total Output / Total Input
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Productivity
BEP
Productivity =Amount of output
Amount of input
Contribution = Price per unit Variable Cost
PV Ratio =Contribution
Sales
X 100
Profit = Contribution - Fixed Cost
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BEP
BEP (units) =ntri uti n
Fixed st
BEP (Rupees) =PV Rati
Fixed st
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Established in 1958 by the Government of
India.
NPC aims to promote the cause ofproductivity in industry, agriculture, service,
infrastructure and sectors of the economy.
It aims to help in achieving sustained all
development in India leading toenhancement of quality of life of people in
general
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NPC aims providing world class services
needed by Indian industry to become
internationally competitive in a globaleconomy.
NPC aims at propagating productivity as an
evolving concept.
NPC is also a change agent & assists the
Central and State governments.
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Agricultural Productivity Enviornmental Management Energy Management Human Resource Development Information Technology International Services In-House Technical Education & Distance
Learning Plant Engineering Productivity Research System/Industrial Engineering Small Industry & Informal Sector
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Improving productivity is at the top of nearly
every manufacturer's list but making it
happen can be a challenge.
There are 2 methods discussed in texts
Conventional methods Modern methods
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Conventional
Increasing output/yield from labour
Automation (low & high cost) Modern
Employee satisfaction
Process and system analysis & measurement
Employee participation
Leadership through mentoring
Innovation and technology
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SQC, ISO & 6 sigma
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Quality system the organisational structure,
responsibilities, procedures, processes and
resources for implementing qualitymanagement.
There are various systems available to acompany to adopt to reap the benefits of
quality. ISO, SQC, 6 Sigma, Awards,Excellence models, QFD studies etc.
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SQC is an effective method of monitoring a
process through the use of control charts.
Developed by Dr. Walter A. Shewhart, while hewas working for Bell Labs in 1920s
Variations in the process that affect the qualityof the end product can be detected and
corrected, thus reducing waste & preventing the
problem before it reaches the customer.
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Control Chart is a chart that plots the
variance of the process to indicate if the
variance is within limits. This is an effective technique to improve
productivity and prevent defects, but itrequires effective and accurate data
collection and measurement methods.
Repeatability and Reproducibility tests
should be conducted
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1979: ISO- HQ at Geneva appoints TC-176 toharmonise Quality system standards
1987:I
SO 9000 series of standards published &adopted in more than 70 countries
1994: Republished standards incorporating phase 1revision
2000: Republished standards incorporating phase 2revision
2008: Clarity to the 2000 standard.
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Management
Leadership
Peopleinvolvement
Systems approach
Continualimprovement
Processapproach
Factualapproach
Customer focusSupplier
relationship
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image,or theimagemay havebeen corrupted.Restartyour computer,and then open thefileagain.If thered x stillappears, you may haveto deletetheimageand then insertit again.
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Plan Establish the objectives andProcesses necessary to deliver results inAccordance with customer requirementsAnd organisation policies
Act Take action to continuallyImprove process performance
Check
Monitor and measureProcesses and product against policies,objectives and requirements for theProduct and report the results
Do Implement theprocesses
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Quality ManualQuality Manual
Work Instructions / specsWork Instructions / specs
Level 1
Level 2
Level 3
Level 4
SOP/ Process ManualSOP/ Process Manual
RecordsRecords
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HelpHelpDeskDesk
MeasurementMeasurement
Analysis &Analysis &
improvementimprovement
ResourcesResources
ManagementManagement
ManagementManagement
ResponsibilityResponsibilityQuality SystemQuality System
RequirementRequirement
ProductProduct
RealisationRealisationprocessprocess
ExcellenceExcellence
ModelModel
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Bob Galvin (chairman of Motorola) in 1986
along with his engineers decided to measure
defects per million instead of the traditionalper thousand standard.
It is a statistically-based method to reduce
variation in electronic manufacturingprocesses in Motorola Inc in the USA.
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Today Six Sigma is used as an all-
encompassing business performance
methodology, all over the world, inorganizations as diverse as local government
departments, prisons, hospitals, the armedforces, banks, and multi-nationals
corporations.
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What is Six Sigma?
A data-driven method for achieving near perfect
quality. Six Sigma analysis can focus on anyelement of production or service, and has a strongemphasis on statistical analysis in design,manufacturing and customer-oriented activities.
(UK Department for Trade and Industry)
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Six Sigma is to be understood at 3 levels
As a metric : sigma the scale for levels of
'goodness' or quality.
As a methodology : Understanding customerrequirements and aligning KBP to meet those
needs through DMAIC model.
As a management system: Align to management
strategy
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The Six Sigma Management System drives
clarity around the business strategy and the
metrics that most reflect success with thatstrategy. It provides the framework to
prioritize resources for projects that willimprove the metrics, and it leverages leaders
who will manage the efforts for rapid,sustainable, and improved business results.."
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Align their business strategy to critical
improvement efforts
Mobilize teams to attack high impact projects Accelerate improved business results
Govern efforts to ensure improvements aresustained
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Sigma and its statistical meaning whichrelates to variation.
MotorolaI
n-house quality initiative program. Following its success it extended its use to itsbusiness processes.
1991 the formalised their 1st black belt six
sigma experts. 1991 Allied Signal also used the system 1995 GEs CEO Jack Welch adopted it and
announced huge savings
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Team and Team Leaders (black / green belt)
Use of measurement and improvement tools
Communication Process understanding
Training
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D - Define opportunity
M - Measure performance
A - Analyse opportunity I - Improve performance
C - Control performance, and optionally:
T - Transfer best practice (to spread the
learning to other areas of the organization)
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'Long Term Yield'(basically thepercentage ofsuccessful outputs
or operations)%
Defects Per MillionOpportunities
(DPMO)
'Process Sigma'
99.99966 3.4 6
99.98 233 5
99.4 6,210 4
93.3 66,807 3
69.1 308,538 2
30.9 691,462 1
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Dabbawala is a person in the Indian city of
Mumbai whose job is to carry and deliver
freshly made food from home in lunch boxesto office workers.
Dabbawala originated when a person namedMahadeo Havaji Bachche started the lunch
delivery service with about 100 men.
Now its services includes cooking also.
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According to a survey, there is only one
mistake in every 6,000,000 deliveries.
The BBC has produced a documentary ondabbawalas, and Prince Charles, during his
visit to India, visited them.